JPRS 4th Ed: Popular Protests in the West Bank: Economic Crisis Reflects Structural Flaws in the Oslo Accords

JPRS 4th Ed: Popular Protests in the West Bank: Economic Crisis Reflects Structural Flaws in the Oslo Accords

Many justifiably argue that the Oslo accords, signed on13th September 1993, is a security agreement which recognized the occupying state of Israel and gave up on the rights of Palestinian refugees.

To guarantee the success of such an agreement and provide an aura of legitimacy, the donor states supported the Palestinian Authority. 

To accomplish this ruse to maintain Israeli occupation the Paris agreement, which sets out the economic agreement between the two parties was, finalized in April 1994, prior the entrance of Yasir Arafat to occupied Palestine and before announcing the Palestinian Authority in June of the same year.

The economic and financial framework, as set out in the Paris Agreement, organizes the work of the PA and guarantees its existence as an agency to carry out its duties in the interest of Israel. The agreement sets the framework and rules for imports, exports, industry, trades, loans, housing construction, costoms and tariff administration and financial fees for services.

The Palestinian economy was connected with the Israelis. This relationship enabled Israel to take greater control of Palestinian economy, making it economically handicaaped from the start by putting growth and prosperity of the occupied territories in the hands of Israelis.

All imports that came through Israel, including petroleum was under Israeli control. In addition Israel was granted authority to collect tax and tarriff on behalf of the Palestinian authority. Tax and VAT were also set by Israel according to its advantage despite the differences between the two economies as well as the differences in the incomes and GDP. Based on such a framework it was inevitable that only Israel would benefited from this agreement, especially as it placed the Palestinian economy under its interest.


The Palestinian Authority has been proud of the Oslo accord for 19 years, despite the enequal, unfair and just relation between the two parties. The Palestinian economy is controlled by Israeli occupation which controls everything. Israel can freeze any financial transfers, close crossings that are vital to imports and exports, suspend granting license for industrial facilities in addition to restricting and banning workers reaching their jobs.

Palestinian economy is dependent on foreign aid from donor countries as well as loans which are estimated at around $ 5 billion. PA pays from is budget more than 100 thousand employees in addition to 50 thousand security personnel. Furthermore the PA suffers from corruption. It has paid millions of dollars in return for political allegiances of some groups and to gain more power.

Excess and consumerism has spread across the Palestinian community in the last Five years, during the time of prime minster Salam Fyad. Palestinian employees became increasingly dependent on bank loans to buy houses as well as cars and to fund a lifestyle that is unaffordable.

This growing trend was the result of an agreement between Fayad’s government and the financial sector. Its primary aim was political as it tried to tie employees to jobs and obligations that are apolitical and diffuse political demands coming from the Palestinians living under occupation. During the time of Fayad’s government corruption has been endemic across the PA . Many cases of corruption were placed against Mohamad Dahlan (charge of security) and Khalid Salam (Financial consultant). Losses resulting from corruption amounted to $800 million were presented to the General Attorney ho resigned recently.

Hollow Praise

despite the global economic crisis, the unqualified praise showered at Salam Fayad’s is extremely perplexing especially given that the Palestinian people rallied to the streets in September 2012 in protest against Fayad and President Mahmoud Abbas, who were both accused of working for the benefit of America and not the Palestinian people. To Palestinians, their success story is nothing but a mirage.

Protests spread across key cities in the West Bank which was fervently dismissed as nothing but protest against Israeli occupation and lack of foreign funding, and not, as you might expect, the failure of Fayad to deliver on his promises which, as all Palestinians know, are not feasible within the context of Oslo.

Fayad stated that the “PA needs extra funds, we suffer a longstanding financial crisis due to the lack of external and foreign funds...We have not obtained sufficient funding during the past few years which has caused the recent riots. We are trying to increase revenue and improve the performance of tax and spending cuts. I have the absolute confidence that we will be able to meet our needs from our resources after the end of occupation. Occupation is limiting the opportunities of Palestinian economic growth due to its control and restrictions on crossings and elsewhere. In addition to the siege imposed on our people in Gaza”

Instead of laying blame where blame lay; the unequal relationship imposed through Oslo, Palestinian leaders are very keen on manipulating the occupation to excuse their own failure. Occupation is a problem, but Fayads problems are not simply born out of the occupation, they are born out of greater structural problems which he is unwilling to admit.

Against Paris Accord

The important aspect of the popular protests in the West Bank is that it has pushed the Palestinian authority to finally confess that the Paris accord has negative consequences.

Apparently, the protests drove the PA to an official request from Israel to re-negotiate the Paris agreement. The request came amid protests against the economic policies of the government. In this respect, Husein Al Shiekh, Minster of the civil affairs at Fayad government clearly pointed out that, “18 years have passed since the Paris agreement. It seems that this accord is a burden on the Palestinian people which has imposed on us tough financial and economic conditions.” Al Shiekh later confessed that he sent an official letter (based on a request from President Abbas) to the Israeli Defense ministry, asking them to open the accord for further negotiations and to form a special committee for that purpose.

Omar Al Ghoul, consultant to the Palestinian Prime Minster suggested that the economic crisis facing the Palestinians is beyond Salam Fayad. He further argued in a press interview with Al Hayat Newspaper that the Palestinian people and their economy are “like hostages” of the Paris agreement and Israeli restrictions on the territory. Al Houl demonstrates that the economic crisis sweeping the Palestinian territories is a reflection of developments in Israel where prices have skyrocketed.

Al Ghoul accused Israel of causing the deterioration across the Palestinian territories and he called on the donor countries, along with the Quartet Committee, to support the Palestinian Authority’s budget.

To have a full picture of how Palestinian economy and the Palestinian people are affected by Israeli economy, in light of the Paris agreement, it is important to point out that the Israeli community revolted against its own government due to prices rise, especially basic products like bread, meat and eggs. Similar price hikes also appeared in Palestine, as confirmed by data released by the Palestinian Central Bureau of Statistics, which recorded the highest increase in the cost of livings in August 2012. This hike was the highest in 3 years.

The rise in the prices of fresh vegetables increased by 15.9%, and cigarette prices rose by 6.47%, while fuel prices increased by 4.51%. The index of consumer prices recorded an increase of 1.51% during August 2012 compared with the previous month which was 2.23% in the West Bank, and 1.58% in Jerusalem, and 0.35% in the Gaza Strip. When comparing prices during the month of August 2012 with August 2011, data indicate that the index of consumer prices rose to 5.11% in the West Bank, and 3.19% in Jerusalem, and 0.92% in the Gaza Strip.

Following the protests and financial crisis across the West Bank, and the restrictions placed on Palestinians through the Paris accord, we can conclude that the people’s protests in the West Bank is a reflection of their frustrations against the Oslo accords and Paris agreement. It was clear from the chants of the people who were participating in the protest that they believed the Accord is their biggest handicap against economic prosperity.

They have also demonstrated tremendous awareness in not allowing genuine concerns to be utilized by the PA as a political football and deflect attention from their own failings by constantly blaming the occupation and the lack of foreign aid. They refuse to accept the argument that the occupation is the only problem and if only there was no occupation the PA would guide Palestinians to political salvation.

The very people who sold out the Palestinians can never hope to reclaim the rights of Palestinians when they are steeped in corruption and part of a process that has brought greater colonization, more occupation, and existential threats to the basic human rights of Palestinians.

 Journal of Palestinian Refugee Studies, Valume 2, Issue 2, Autumn 2012

Short Link :