Since the beginning of the Arab Spring almost two years ago, the West Bank and Gaza Strip have been remarkably quiet. There have been no large demonstrations against what Palestinians call the ongoing Israeli occupation; or against President Mahmoud Abbas and Prime Minister Salam Fayyad.
That may now be changing. But unlike the Arab Spring protests which many hoped would stimulate political reforms and democracy, the current protests in the West Bank center clearly on the economy. Last month, Palestinian officials increased the Value Added Tax, or VAT, which is paid on most goods and services, from 14.5 percent to 15.5 percent. The move came as Israel increased its own VAT from 16 to 17 percent.
Thousands of Palestinians poured into the streets all over the West Bank. In Hebron, demonstrators attacked the police station and the municipality. In several refugee camps, they closed roads. Palestinian taxi and truck drivers held a one-day strike earlier this month, effectively shutting down the West Bank, to protest the increase in fuel prices.
Like the professional drivers, the demonstrators, too, were protesting increases in the price of gasoline, which has increased in Israel to approximately $8 per gallon. The Palestinian economy is dependent upon the much larger Israeli economy for imports of raw materials. The minimum wage in Israel is just over $1,000 per month, while the Palestinian minimum wage is about $400 per month.
Following the demonstrations, Prime Minister Fayyad decided to reduce the VAT increase, leaving the tax at just 15 percent, to try to stem the public protests. The American-educated Fayyad is very popular in the West, but at home in the West Bank as an independent not associated with the ruling Fatah party, he is far less popular. Abbas, too, is being seen as ineffectual and his popularity has sharply declined.
A recent study by the Palestinian Center for Policy and Survey Research (PSR) in the West Bank and the Gaza Strip found that 76 percent of Palestinians expect the current wave of protests to continue and even to escalate. Almost half of the public believe that the current economic crisis facing the Palestinian Authority (PA) is “manufactured” and 37 percent believe the PA will not be able to pay the salaries of teachers, policemen and other civil servants over the next year.
The World Bank has concluded that the Palestinian economy is facing an unprecedented crisis and has called on the international community to increase donations to the PA.
“It is clear that the wave of price hikes and the decisions taken by the Fayyad government, in raising prices of fuel, are responsible for this sudden shift in public attitudes and evaluations,” concluded the PSR study.
“PM Salam Fayyad was the most affected according to the results of the recent poll,” Dr. Khalil Shikaki the head of the PSR told The Media Line.
“People feel Fayyad’s government made a lot of promises that it failed to fulfill.”
He said Fayyad could bounce back, unless he continues to increase prices.
“If the price increases continue, Fayyad’s popularity will significantly decrease,” Shikaki opined. “This is a dilemma for the PA, because the protests and the street anger are directed against the PA’s economic behavior and policy.”
Palestinian Authority President Mahmoud Abbas’s popularity has also sharply declined since last September when he tried to achieve recognition of Palestine as an independent state at the United Nations. “Now, after a year, there is a feeling that he failed, as he looks hesitant,” Shikaki said.
Abbas is now trying to get the UN to recognize Palestine as a “non-member observer state,” a status held only by the Vatican. He has said he hopes the UN General Assembly will debate and approve the move in November.
Other Palestinian analysts say the fates of Fayyad and Abbas are linked.
“The protests erupted against Fayyad but quickly turned against Abbas,” analyst Hani Al-Masri told The Media Line.
Fatah Central Council Member Nabil Amr says Fayyad and Abbas must try to solve the financial crisis. He says the protests are a warning to the PA.
Palestinians are scheduled to hold municipal elections later this month, and analysts believe the anger directed toward Fayyad and Abbas could negatively affect candidates who are seen as being allied with either of the two men.