This archive report was first published on 19 August 2019.
On August 19, 2019, Palestinian President Mahmoud Abbas made a significant move to address the financial crisis plaguing the Palestinian Authority. In a bid to reduce spending and confront the budget crisis, Abbas fired his advisers, citing the need for austerity measures.
The move comes as Israel continues to withhold tax transfers, amounting to around $10 million per month, following its decision in February to deduct funds corresponding to the Palestinian Authority's payments to Israeli prisoners and their families in 2018. This deduction totals $138 million for the year.
Israel's decision has left the Palestinian Authority facing a severe financial crunch, with the tax transfers accounting for approximately 65 percent of its revenues. In response, the PA has cut salaries for most of its employees by half to keep the government afloat.
Adding to the financial woes, the United States has also cut hundreds of millions of dollars in aid to Palestinians via various programs. The situation has led to widespread concern among Palestinians, with many viewing the funds as essential support for families who have lost their main breadwinners.
According to Palestinian political analyst Jihad Harb, Abbas's decision to fire his advisers appears to be a response to a report received in June on payments to ministers and officials. Harb stated, "It is clear that president Abbas received the report from the committee that examined the salaries and benefits of employees. He wants to reduce his office's spending by taking austerity measures to confront the current budget crisis."
"It is clear that president Abbas received the report from the committee that examined the salaries and benefits of employees," Harb told AFP. "He wants to reduce his office's spending by taking austerity measures to confront the current budget crisis."
