Salam Fayyad unveils price, tax cuts to stem growing West Bank protests


Palestinians hold placards during a protest against the rising cost of living in the West Bank city of Ramallah on Sept. 11, 2012. (MOHAMAD TOROKMAN/REUTERS)
September 11, 2012

Scrambling to head off intensifying protests against the high cost of living in the West Bank, the prime minister of the Palestinian Authority, Salam Fayyad, announced price and tax cuts Tuesday and said his government was doing its best to alleviate economic hardship.

Fayyad has been the target of several days of demonstrations in West Bank cities. The protests turned violent Monday when rioters attacked police stations and government buildings in Hebron and Nablus. Protesters have called for Fayyad’s dismissal, venting their anger over recent price hikes that have driven up costs of food and fuel.

The demonstrations have posed a serious challenge to the cash-strapped Palestinian Authority, which faces a shortfall in promised donations from Arab countries and the United States.

After a meeting of his cabinet, Fayyad announced a decision to cancel increases this month in the prices of diesel fuel, kerosene and cooking gas, which are purchased from Israel, and to reduce the recently raised value-added tax, which is pegged to Israeli rates under an economic agreement with Israel.

Fayyad said government employees, hundreds of whom staged a two-hour work stoppage and demonstrated outside his office Tuesday, would be paid half their August salaries by Wednesday, and he pledged efforts to complete the wage payments in a week.

He said the government would make up for revenue losses from the price and tax reductions by cutting the salaries of ministers and other high-level officials and by reducing some government expenditures.

“We’re doing the best we can, and we have been all along,” he told a news conference. “I hope that the Palestinian citizen could look at this situation, in light of the unique hardships we face, and will find it sufficient. It represents the maximum, most intensive effort to get to a solution.”

It was not immediately clear whether the announced measures would halt the wave of protests, which subsided Tuesday after the previous day’s violence. Piles of rocks and the charred remains of burned tires still littered some streets, but protests were suspended in Hebron after crowds of youths Monday smashed traffic lights and stoned city hall, an Education Ministry building, a police post and a fire station.

The festering discontent was on display outside the cabinet building, where demonstrators chanted calls for Fayyad to “hear the voice of the masses.”

Among the protesters was Baker Armoush, a father of five who works as a courier in a government ministry. His voice trembling with emotion, he said his salary of about $400 a month was not enough to cover the costs of food, rent and utilities. To supplement his meager income, he said, he was forced to accept handouts from friends and work nights selling ice cream on the street.

Aside from its urgent need for donor contributions, Fayyad told reporters, the Palestinian Authority is constrained by Israeli-imposed restrictions on movement and access to resources in the West Bank, more than half of which remains under direct Israeli control.

“There are clear limits to what the Palestinian Authority can achieve economically, given the context of Israeli restrictions it experiences,” Fayyad said.

In Israel, where the developments in the West Bank have raised concerns for the stability of the Palestinian Authority, Prime Minister Benjamin Netanyahu ordered an advance transfer of about $63 million in taxes and customs duties collected by Israel for the authority at its entry ports, his office said. Netanyahu said earlier that he hoped the Palestinian Authority would “weather this crisis.”

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