Analysis

Gaza Pay Crisis: Abbas Risks Widening Rift Between West Bank and Hamas-run Gaza

The Palestinian president is repeating the mistake of hoping that heightened economic pressure on Gaza will undermine Hamas’ standing and alter its positions

FILE PHOTO: Palestinian President Mahmoud Abbas stands on podium during a reception ceremony at the Queen Alia International Airport in Amman, Jordan March 28, 2017.
MUHAMMAD HAMED/REUTERS

The recent decision to slash salaries for the Palestinian Authority’s employees in the Gaza Strip highlights one of the biggest political failures of Mahmoud Abbas’ government. Instead of fighting the separation of Gaza from the West Bank – which Israel has imposed since 1991, and especially since 2007 – Abbas has helped widen it.

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The Hamas government in Gaza also played a major role in worsening this separation. Both rival governments have been entrenching themselves in their fiefs, and their power struggles directly hurt both Gazans and the ability to fight the occupation. But it’s the government in Ramallah that draws the fire – sometimes justified, sometimes not – as the party mainly at fault for the rift and the one abandoning 2 million Gazans.

Palestinians shout slogans and hold placards during a protest in Gaza City on April 10, 2017 against a decision by the West Bank-based Palestinian Authority to impose pay cuts on its civil servants in the Gaza Strip.
MOHAMMED ABED/AFP

Regarding the salary cuts, the finger of blame is rightly pointed at Ramallah. The original sin was Abbas’ order in July 2007 that most civil servants in Gaza, both civilians and members of the security forces, must refuse to come to work if they want to keep getting paid. His erroneous assumption, or that of his advisers, was that if the public sector were shut down, the Hamas government would collapse.

This decision reflected the degree to which the leaders of Abbas’ Fatah party underestimated Hamas’ strength, roots in Gaza and resourcefulness. Hamas quickly filled the vacancies with clerks, managers, judges, prosecutors and policemen drawn from its supporters, creating two parallel systems of civil servants: those who got their salaries on condition they didn’t work, and those who worked.

Hamas – which won the 2006 parliamentary elections and was a key component of the unity government established in March 2007 – accused the Fatah-controlled security services of planning a coup against it that summer. After a short but painful civil war, it gained control over all the security services in Gaza. Abbas then dismantled the unity government. Ismail Haniyeh became prime minister of Gaza and Salam Fayyad became prime minister of the West Bank.

Reuters

In 2013, when the Gaza economy, which was based on smuggling tunnels, collapsed, Hamas entered a long financial crisis that prevented it from paying salaries for months; it then cut them permanently. This made the absurdity even starker: Alongside the employees who were paid on condition they didn’t work, thousands of employees worked but didn’t get paid.

The forced unemployment in exchange for being paid created new social and familial tensions in Gaza on top of those created by “normal” unemployment. As many women and various observers have noted, this salaried idleness created a subculture of indolence among tens of thousands of men, a shirking of familiar responsibilities, apathy and a lack of interest in life. Meanwhile, those who used the time for private business ventures, however small and temporary, had to hide this from informers and the Finance Ministry in Ramallah so that their regular salary, which wasn’t high, wouldn’t be taken away.

The European Union continued to subsidize the PA’s budget (since Israeli restrictions undermined the PA’s economy). But this February, the EU announced that from now on, the 30 million euros previously allocated to paying nonworking employees in Gaza would go toward development and help for poor families.

As of the end of 2015, some 25,490 Gazans were registered as civilian employees of the PA in Ramallah and 33,200 as members of its security services. The only PA employees in Gaza who were allowed to continue working were those in education, welfare and health; they currently number around 10,000. But their salaries, too, were slashed 30 to 50 percent (depending on the size of the salary).

A few hundred public-sector employees in Gaza, mainly members of the security services, fled to the West Bank after the civil war in June 2007 and are working there. But their salaries were cut as well.

Thus the PA sent the message that in its view, people registered as West Bank residents are worth more than Gaza residents.

Sputtering Palestinian economy

The PA’s attempt to explain the salary cuts as stemming from its high spending in Gaza aren’t convincing. The Aix Group, a think tank of Palestinian and Israeli economists, recently published a study containing proposals for reviving Gaza's economy even under current conditions in which there are no peace negotiations with Israel. It found that contrary to the PA’s claim, the PA’s net spending in Gaza (expenditures minus the revenues it receives from Gaza) doesn’t amount to 40 percent of its budget, but only 15 percent – a reasonable subsidy level.

In besieged Gaza, where Israel restricts economic activity to a minimum, salaries for not working have become a kind of unemployment benefit or welfare allowance. The cut in those salaries, effective at the start of April, is a correction of a financial absurdity. But this “correction” was made at the expense of people who have actually remained loyal to Fatah and the PLO, and to the many people dependent on them.

Abbas, Prime Minister Rami Hamdallah and their advisers are thus repeating the political mistake they made a decade ago: hoping that more financial pressure on Gazans will finally undermine Hamas’ standing and alter its positions.