Palestinian Authority Inches Toward Boiling Point Amid Economic Crisis, Israeli Security Officials Warn

Economic development has been keeping Palestinian protests focused on civil issues, but the coronavirus crisis could provide spark for a new outbreak of violence

Yaniv Kubovich
Yaniv Kubovich
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Palestinian laborers, who were not able to cross into Israel for work, stand by a fence near an Israeli checkpoint closed amid fears of a second coronavirus wave near Hebron, June 29, 2020.
Palestinian laborers, who were not able to cross into Israel for work, stand by a fence near an Israeli checkpoint closed amid fears of a second coronavirus wave near Hebron, June 29, 2020.Credit: MUSSA ISSA QAWASMA/ REUTERS
Yaniv Kubovich
Yaniv Kubovich

Senior Israeli security officials have recently warned politicians that the economic crisis in the Palestinian Authority is worsening, and that it could lead to an outbreak of violence.

The officials believe that Israel and the PA must find a solution to renew the security cooperation between them, which will make it easier for the Palestinians to deal with the consequences of the coronavirus in the West Bank – difficulties that the officials called the “worst there in the last decade.”

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The development of the Palestinian economy in the West Bank in recent years has bought Israel a fair amount of quiet. The Palestinian standard of living has increased, which has given them an incentive to avoid escalations on a number of sensitive issues – such as protests near the Gaza border fence, the move of the U.S. Embassy to Jerusalem, the Trump Middle East plan and the United Arab Emirates and Bahrain's normalization agreements with Israel. The main protests that reached the Palestinian street in recent years have been about civil issues like salaries, pensions and the cost of living. But the economic crisis caused by the pandemic has changed this.

The security establishment says that the scenario of the PA's collapse – and ensuing riots – has become more likely, although it is not expected soon. In closed-door conversations, security officials told politicians that Palestinian President Mahmoud Abbas has decided to avoid a clash with Israel, making him the “ideal” Palestinian leader in Israel's eyes. Israel should seek to reach understandings with him, they explained.

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Security officials believe that both Israel and the PA want to reinstate their security coordination, which the PA halted after the release of U.S. President Donald Trump’s Middle East plan in January. Doing so could resolve a number of issues significantly impeding the Palestinian economy: work permits, trade between Israel and the PA and the transfer of Palestinian tax money from Israel – which the PA has refused to accept since Israel passed a law deducting the sum that the PA allocates for the families of security prisoners held by Israel.

The return of poverty and protests

Before the coronavirus outbreak, the Palestinian Central Bureau of Statistics predicted that the PA’s GDP for 2020 would be $16.1 billion. According to an updated assessment, that figure has fallen to $13.6 billion – a 13.5 percent decline from the previous year. When the number of people who had to stop working because of the crisis is factored into Palestinian unemployment figures, the jobless rate rises to more than 35 percent. All told, about half a million Palestinians in the West Bank and Gaza have lost their jobs or have gone into debt because of the coronavirus crisis.

A Palestinian demonstrator stands in front of burning tires during a demonstration in Kfar Qaddum, September 4, 2020.Credit: AFP

The average daily wage of workers in the private sector in the PA is currently about 120 shekels ($35). The main economic branches in the private sector are tourism, restaurants and hotels, which have been particularly hard-hit – and a loss of about a quarter of the income from these industries was reported earlier this year. Since then, the trend has continued to spread to other fields, like agriculture and industry, which are estimated to have lost hundreds of millions of dollars in income. The Palestinian Central Bureau of Statistics estimates that about a third of private businesses in the PA have shut down or are on the verge of closing because of economic difficulties, and more than 40 percent of the checks in the West Bank bounce for lack of coverage.

Some Palestinians have more profitable employment options – work in the settlements or in Israel. In the past, about 140,000 Palestinians would go to work every day in Israel with work permits, and they were joined by tens of thousands of illegal laborers – with Israel not making it particularly hard for them to enter the country. The average wage they received was more than double the wage in the PA – about 254 shekels a day.

But since the outbreak of the virus, the number of permits to work in Israel has fallen, and the security forces are stricter about enforcement along the separation barrier. Senior defense officials said that these changes are bringing Palestinians society closer to the boiling point. They explained that domestic violence is on the rise, as is the use of guns in disputes and school dropouts. An issue that worries the senior defense officials no less is the weakness of the Palestinian security forces in the face of these phenomena.

“The person who is managing to keep a line of communication – by the skin of his teeth – is Shin Bet security service head Nadav Argaman and the head of the Shin Bet’s Jerusalem, Judea and Samaria district,” a security official involved in the matter told Haaretz. “A document was submitted that includes the entire possible chain of responses in the PA to annexation. The position in all the scenarios was that it is an event that will not be able to be soft-pedaled, that it will have critical significance to the situation in the PA and to us, on assumption that the economic situation will be the spark.” The official added: “The position of the security establishment was unequivocal: that we must, along with all the processes in the region, give the Palestinians a light at the end of the tunnel – something for them to cling to.”

The official added that there is no one in the upper echelons advocating for this, pointing a finger at IDF Chief of Staff Aviv Kochavi. “This issue is not at the top of his priorities,” he said; Kochavi, was never in a command position in the Palestinian arena, and "considers the north to be the main threat, and that’s where he directs his attention.”

Palestinian President Mahmoud Abbas speaks during a leadership meeting at his headquarters, in the West Bank city of Ramallah, September 3, 2020. Credit: Alaa Badarneh,AP

The soldier in Beit El

Palestinian frustration in their contacts with Israel manifested in an incident that took place shortly after the White House presented its plan. In a meeting with Israeli security officials, Palestinian representatives wanted to see the maps accompanying Trump’s plan. "Nobody saw maps, nobody knew the details of the agreement,” the official said. According to some present at the meeting, the PA minister in charge of communication with Israel, Hussein al-Sheikh, asked the Israelis there "What's the name of the soldier in Beit El?" Confused, the Israelis asked him what he meant. “So we know who to give the weapons to,” he answered.

The security official explained what al-Sheikh meant. “The story here is not whether there will be an intifada and the Palestinians will come out against Israel with guns, because under those circumstances it’s clear to everyone that they will pay a heavy price and Abu Mazen doesn’t want this,” he said, referring to Abbas's honorific name.

"But the Palestinians raise the possibility each time that they will decide to give up responsibility for managing the PA. They presented us with a scenario in which Abu Mazen can get to a point where he sends PA security service jeeps that will collect all the weapons and bring them to the Israeli Civil Administration [near the West Bank settlement of] Beit El, put down the keys and say ‘take them, it’s your problem,'” he said.

An article published in May by the former coordinator of government activities in the territories, Maj. Gen. (res.) Yoav Mordechai, and Col. (res.) Michael Milstein lists a series of steps to reduce the possibility of an escalation. Among them, they proposed: “Ensuring ongoing financial support in the PA, especially to pay the salaries of government workers and provide aid for needy families; expand the number of permits easing conditions for Palestinian merchants; encouraging or easing commercial and business activities of Israeli Arabs in West Bank markets; examining the possibility of lifting the – justified and legitimate – penalty of deducting money for terrorists [from PA taxes] and enshrining it in law; and a return of Palestinian laborers from the West Bank to work in Israel as quickly as possible.”

The two, who have earned the support of a number of senior defense officials, added: “Implementing these recommendations could give Israel temporary stability in the West Bank, especially vis-a-vis the Palestinian public. However, as time goes on, the effectiveness of efforts to restrain this will decline, and they could very much lose their impact without broader political contexts.”

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