Palestinians protest over high cost of living

September 6, 2012

Attaf Abu Ali, who drives a taxi van, had a hand-lettered sign on his vehicle Thursday that said: “Car for sale, with driver.”

“I can’t live off of this,” Abu Ali said of his work, ticking off a list of operating expenses, the most onerous among them the rising price of diesel fuel.

Taxi drivers in several West Bank cities stopped working for two hours during the morning rush hour Thursday, snarling traffic in a protest against the rising price of gas.

The protest was the latest in a recent wave of demonstrations in the West Bank against the high cost of living. The protesters have vented anger at Salam Fayyad, the prime minister of the Palestinian Authority, who has won strong Western support for his efforts to root out corruption and revamp the Palestinian economy.

“The people want to topple Fayyad!” a group of young protesters chanted Thursday at Manara Square in downtown Ramallah. “We have legitimate demands!”

Two West Bank residents have tried to set themselves on fire to protest their economic hardship but were stopped by onlookers. In the Hamas-ruled Gaza Strip, as well, a person died after a self-immolation last week over economic conditions there.

The trigger for the West Bank protests was the rise in gas prices, prompted by cost increases in Israel, from which the Palestinian Authority buys fuel. But the demonstrators are also upset about the costs of basic goods, including dairy products and cooking gas, which are also imported from Israel and sold at prices similar to those charged there, although the average income in the West Bank is far lower.

Prices increased again recently when a value-added tax imposed on consumer goods was raised by 1 percent after an identical increase in Israel.

Samir Huleileh, an economist and CEO of the Palestine Development and Investment Co., said the fuel price hike and matching tax increase were a mistake. “We have to balance the ability of the people to survive and the ability of the government to survive,” he said. “You can’t just impose everything on the people and not expect them to respond.”

A 1994 economic agreement signed as part of the Oslo accords preserves much of the Palestinian economy’s dependence on Israel through a customs union, in which there are no economic boundaries between Israel and the Palestinian areas, and Israel controls external borders.

In this week’s protests, demonstrators have called for the abolition of that agreement, known as the Paris Protocol.

Fayyad has raised taxes and expanded their scope, seeking to increase government revenue and reduce dependence on foreign donor nations, whose contributions have declined, leaving the Palestinian Authority strapped for cash.

Civil service employees have only recently received their salaries for July, and the Palestinian Authority has run up mounting debts to local banks from which it has borrowed and to private firms contracted for government projects. Unemployment in the West Bank, meanwhile, has reached 20 percent.

Firas Braweish, one of the protesters at Manara Square, recited a list of complaints against Fayyad’s government: It has failed to create jobs by developing the agriculture sector and opening manufacturing plants, it wasn’t protecting local products from foreign competition, and it has not imposed a minimum wage.

“We want the government to build a Palestinian economy that is self-sufficient,” he said.

The dissent can also be heard within the Palestinian business community. Sam Bahour, a management consultant in Ramallah, said that the “policy of donor dependence has brought this economy to the verge of collapse.”

“The issue is not to tax people more, but to end the state of [Israeli] occupation and allow the private sector to actually work,” Bahour added.

A World Bank report released in July said that only the development of the private sector would generate the jobs needed for a sustainable Palestinian economy, but Israeli-imposed restrictions on movement and access to resources were stymieing investment.

Mohammad Shtayyeh, president of the Palestinian Economic Council for Development and Reconstruction, said, “The only solution for this is actually political.”

“Either Israel reassumes its responsibility as an occupying power and takes charge of services like education and electricity, which means the end of the Palestinian Authority,” he said, “or Israel ends its occupation and lets the Palestinians run their own affairs. The Palestinian economy is incapable of surviving under the current circumstances.”

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