A Meager Palestinian Economy

● When you read the monthly financial figures on the page of the Ministry of Finance and Planning in Ramallah from time to time, a bleak picture of the state of the national economy appears before you.. not to mention the occupation, killing, and settlement activity, and politics, and its labyrinths.. You feel that there are hidden hands.. nursing the festering of our wounds, and obliterating our hopes... For example... when you look at Arab support, you find that it is not normal that there has been no Arab support over the past few years. With the exception of the State of Algeria and Iraq in 2021, and the State of Algeria in 2022, as for the past five months of this year, not a single Arab state has been recorded as extending a helping hand to Palestine.. occupied..

-       The harsher picture is that our revenues are limited to taxes, which amounted to about 88% of total net revenues (cash basis) in May 2023. Sixty-eight percent of these taxes come from clearance revenues (cash basis as well), which are collected by the Israeli occupation authorities from Palestinian traders, individuals, companies and Palestinian institutions.....not to mention the net lending from which a monthly deduction is made from clearance revenues to pay some of the electricity and water bills and various loans as a result of supplying Palestinians with electricity and water and settling health, hospital and medical referral bills..which amounted in 2023 up to May to 546 million shekel..and net lending constitutes a real problem for the Palestinian Authority, as the amount of net lending exceeds one billion shekel annually..and this authority has not been able to reduce this amount, in addition to some local bodies and companies and individuals not paying their obligations for the water and electricity supplied to them by the occupation authorities, so there are no acceptable collection efforts from the citizens of each local body..that is there is failure to carry out the burdens of responsibility of these Palestinian local authorities..not to mention that the Israeli authorities collect a collection fee of 3% of total clearance revenues.!

-       In addition, the returns on government investment, to add another income source to public revenues for the Palestinian Authority (one of the main sources of richness in the national economy)..are absent, and barely noticeable...as, as we mentioned above, in the first five months of this year 2023 they amounted to 1 million shekel, and these returns have not exceeded 90 million shekel annually at maximum over past years..also, our above-ground and below-ground wealth sources within Palestine are not exploited and we do not have a free hand...to control these sources....!

-       At the same time, the reliance in the Palestinian public treasury is concentrated mainly on the private sector, individuals and companies, in addition to Palestinian workers in Israel and the Israeli settlements, whether in collecting local taxes or borrowing from private financial sector institutions......

-       As for development operations..it has been observed that there are no significant government development projects that would stimulate growth, address debts and address unemployment..

●     Total net revenues in 2023 up to May amounted to 7,232 million shekel (seven billion two hundred thirty-two million shekel), where local revenues amounted to 2,906 million shekel, of which tax revenues were 2,029 million shekel, while clearance revenues amounted to 5,927 million shekel, i.e., about 82% of total revenues.....

●    Comparing the data of the previous April with these data in May, it appears that total revenues in May 2023 increased over the previous April 2023 by 1,429 million shekel, where local revenues in May increased over April 2023 by 519 million shekel; this increase came from local tax revenues by 343 million shekel, while non-tax revenues (fees) increased by 145 million shekel.., and clearance revenues in May increased over April by an amount of 926 million shekel,....

●     Total expenditures and net lending for the same period (2023 up to May) amounted to 5,927 million shekel, where wages and salaries alone amounted to 2,899 million shekel, i.e., 49% of total expenditures and net lending., and transfer expenditures amounted to 1,131 million shekel..while fuel subsidy expenditures amounted to 346 million shekel,. As for net lending, it amounted to 546 million shekel.

-       Net taxes in 2023 up to May amounted to 6,976 million shekel (commitment basis) at a rate of about 96%..of total net revenues for May 2023..!

-       Local tax revenues in May 2023 amounted to 2,028 million shekel, representing 29% of net taxes, whose total (cash basis) amounted to 6,376 million shekel. As for clearance revenues, which are taxes collected from Palestinians via the Israeli occupation authorities, they amounted to 4,348 million shekel (cash basis) million shekel, forming 68% of net taxes on a (cash basis)..

-       The total public debt in 2023 up to May amounted to 12,664 million shekel, of which 7,830 million shekel constituted the domestic debt, i.e., 62% of total public debt; bank loans of it were 4,489 million shekel, banking facilities from it worth 1,779 million shekel..then loans of the Petroleum Authority amounting for the same period to 1,360 million shekel, in addition to loans from public institutions, which amounted to 201 million shekel, and these are loans granted to the Petroleum Authority as well.

-       As for the external debt, it amounted to about 4,835 million shekel.., of which 3,013 million shekel is debt to Arab financial institutions, while international institutions’ share of the external debt amounted to about 1,255 million shekel, and there are also bilateral loans..

-       When distributing public expenditures in 2023 up to May across several sectors, the financial data were classified as follows: total expenditures of the (governance sector) amounted to 3,367 million shekel (three billion three hundred sixty-seven million shekel), of which wages amounted to 1,584 million shekel (one billion five hundred eighty-four million shekel)....The Ministry of Interior and National Security, were among the sites that received the largest total expenditure disbursements in the governance sector, which were 46%, where they amounted to 1,540 shekel (one billion five hundred forty million shekel), while their wages amounted to 1,240 shekel (one billion two hundred forty million shekel), whereas Palestine Liberation Organization (PLO) institutions’ total expenditures amounted to 313 million shekel with wages of 57 million shekel..(according to Table No. 5B: details of expenditures by item and responsibility center (commitment basis) in 2023 up to May)

-       Total expenditures of the (social sector) amounted to 2,947 million shekel, of which wages were 1,741 million shekel., and the Ministry of Education was one of the largest responsibility centers that received total expenditures of 1,485 million shekel, with wages of 1,195 million shekel, followed by the Ministry of Health, where total expenditures for the Ministry of Health responsibility center amounted to about 790 million shekel..with wages of 390 million shekel – approximately –, then the Ministry of Social Development, where its total expenditures amounted to 479 million shekel, of which wages amounted to 29 million shekel,

-       As for one of the ongoing financial concerns and consequences... it is the net cumulative arrears balance, as the net cumulative total arrears in May 2023 amounted to 11,827 million shekel, whereas in May 2022 it was 10,657 million shekel..and it is clear that arrears increase over the years..to form a heavy burden on the Palestinian government, especially since more than 30% and up to 50% of the balance of this accumulation belongs to the private sector..which supplies goods and services to the public sector..and therefore..the accumulation of such debts weakens private sector growth and economic growth consequently!

-       In comparison with the net cumulative arrears balance in previous years, it did not exceed 3 billion shekel in the years 2014 and 2015..and up to 2019, where it reached about 4,516 million shekel that year (2019)..then it began to rise thereafter to reach the figures referenced above in 2023..!

-       The total public debt in 2023 up to May amounted to 12,664 million shekel, of which 7,830 million shekel constituted the domestic debt, i.e., 62% of total public debt; bank loans were 4,489 million shekel, banking facilities from it worth 1,779 million shekel..then loans of the Petroleum Authority amounting for the same period to 1,360 million shekel, in addition to loans from public institutions, which amounted to 201 million shekel, and these are loans granted to the Petroleum Authority as well, from the Alimony Fund, and the Institution for the Management and Development of Orphans’ Funds – a loan of about 14 million dollar, and a loan from the Road Traffic Accident Victims Compensation Fund of about 40 million dollar...

- As for external debt, it amounted to approximately 4,835 million shekels.., of which 3,013 million shekels were debt owed to Arab financial institutions, while the international institutions’ share of the external debt amounted to approximately 1,255 million shekels; also, there are bilateral loans with Spain in the amount of 277 million shekels, and with Italy in the amount of approximately 289 million shekels

- When distributing public expenditures in 2023 up to the month of May, across several sectors, the financial data were classified as follows: total governance sector expenditures amounted to 3,367 million shekels (three billion three hundred sixty-seven million shekels), of which salaries amounted to 1,584 million shekels (one billion five hundred eighty-four million shekels)....The Ministry of Interior and National Security was among the sites that received the largest total disbursement of expenditures in the governance sector, which was by 46%, where it amounted to 1,540 shekels (one billion five hundred forty million shekels), while its salaries amounted to 1,240 shekels (one billion two hundred forty million shekels)...Following it were the pension allocations for retirees where total expenditures amounted to 561 million shekels, then the financial sector, whose total expenditures amounted to 544 million shekels, which were distributed to items of interest payments that amounted to approximately 156 million shekels, and fuel subsidy in the amount of 250 million shekels, while Palestine Liberation Organization (PLO), had total expenditures amounting to 313 million shekels with salaries of 57 million shekels..(according to Table No. 5 B: Details of expenditures by item and responsibility center (commitment basis) in 2023 up to the month of May)

- Total social sector expenditures amounted to 2,947 million shekels, of which salaries were 1,741 million shekels., and the Ministry of Education was one of the largest responsibility centers that received total expenditures of 1,485 million shekels, and their salaries 1,195 million shekels, followed by the Ministry of Health, where the total expenditures for the Ministry of Health responsibility center amounted to approximately 790 million shekels..with salaries of 390 million shekels – approximately –, then the Ministry of Social Development, whose total expenditures amounted to 479 million shekels, of which salaries amounted to 29 million shekels,