Between Understanding Causes and Minds: Areas of Government Spending in Palestine

-        Actual Palestinian government spending in 2018 amounted to 13,134 million shekels..(thirteen billion, one hundred and thirty-four million shekels)..

-        We wrote in three previous parts about the detailed financial data for net public revenues for 2018, which amounted to 12,256 million shekels (twelve billion, two hundred and fifty-six million shekels)..and the actual expenditures as we listed above....

-        It is noticeable that although the actual expenditure figures were lower than the 2018 budget figures in almost all items, starting with salaries and wages, public public debt amounts increased compared with their 2017 levels; for example, the total public debt in 2017 was 8,849 million shekels (eight billion, eight hundred and forty-nine million shekels), of which domestic debt was 5,224 million shekels, including bank debt of 2,834 million shekels, bank facilities of 1,478 million shekels, and external debt of 3,625 million shekels, and the announced public debt in 2018 became 8,916 million shekels (eight billion, nine hundred and sixteen million shekels), i.e. total public debt increased in 2018 despite the reduction in the government deficit and the payment of some arrears, and despite that domestic debt decreased slightly in bank loans, most of which are long-term!! However, bank facilities as debt increased in 2018 compared with 2107, and external debt also increased in 2018, becoming 3,882 million shekels...!! where debts due to Arab financial institutions and international institutions and bilateral international loans also increased...!! In addition, amounts due from arrears, most of which are to the private sector, increased in 2018 compared with 2017 - as clarified in a previous post - where these receivables at the end of 2017 were about 2 billion shekels, and the net cumulative arrears at the end of 2018 became 2,836 million shekels....!!, ...and amounts due to public funds, such as the Pension and Provident Fund, the Orphanage Fund and the Alimony Fund ..and others, and the Petroleum Authority’s debt also increased in 2018 to reach 895 million shekels...!!, and they were not paid but rather increased compared with their 2017 levels .!! Also the interest on one external debt was postponed to a later date.. and despite all that.. domestic and external indebtedness and local public funds increased; all this gives an indicator that causes concern and gives a red light...regarding the government’s course...and what will become of economic matters, in light of threats to cut foreign aid and tightening on clearance revenues, and the specter of rising unemployment which increased its rate to more than 30% - more than 400 thousand people - , and the failure to present the tax reform project that the government promised in the 2108 draft budget law, and the inequality occurring in Palestinian society which grows annually and has not been reduced...!! And the odious division that paralyses the economic side and its sectors in Palestine, in addition also to the political and moral harm to the Palestinian cause in all dimensions, add to that that the nature of the projects that were implemented or are being completed in development, transfer and capital expenditures are mostly operational, environmental, and security in nature...and not capital or investment in a purposeful way to create jobs.... Therefore, we hope to see the government’s plans in its 2019 budget take these observations into account — and certainly they will take them into account — to the extent that their capacities allow ...and in light of the squeezing of the Palestinian people from most directions and the attempt to erase their just cause.. and we wish them success..!!

-        I reviewed Table No. (5 B) related to expenditure details by item and responsibility center (commitment basis) during 2018,...and I list below some of the main items to focus on the larger spending arenas ..versus their smaller counterparts, which I will not list,..to give a clear picture..where did the expenditures go?..Not for anything "in the same of Jacob" but to state the facts..before those interested in this field..the goal for all is to establish the Palestinian state on part of the whole land of Palestine..I mean on the Palestinian territories as they were within the boundaries before June 4, 1967.

-        Total spending on what is known as "public administration" which is "the general administration of official governing institutions" and which includes (the Office of the President and institutions of the Palestine Liberation Organization (PLO) and the Legislative Council and the Council of Ministers and the State Audit and Administrative Control Bureau (SAACB) and the Civil Service Bureau and the Palestinian Central Bureau of Statistics and the Central Elections Commission and the General Authority for Crossings and the Ministry of Jerusalem Affairs), where the value of public spending in 2018 – commitment basis — amounted to approximately 949 million shekels; of this amount, 333 million shekels were spent on salaries and wages in this arena, the largest share of spending was for the institutions of the Palestine Liberation Organization (PLO) which amounted to 419 million shekels.

-        As for the "security and order" sector, its share of expenditures – commitment basis – was 3,450 million shekels (three billion, four hundred and fifty million shekels); the Ministry of Interior and National Security’s share was 2,843 million shekels (two billion, eight hundred and forty-three million shekels), and salaries and wages in the security and order sector in 2018 were 2,508 million shekels (two billion, five hundred and eight million shekels)...

-        As for the "financial affairs" sector, its share of spending – commitment basis — amounted to 2,782 million shekels (two billion, seven hundred and eighty-two million shekels), of which salaries and wages were 206 million shekels; the largest share of spending in this sector was for "pensions" which amounted to 1,956 million shekels (one billion, nine hundred and fifty-six million shekels), and the Ministry of Awqaf and Religious Affairs received an expenditure share of 113 million shekels, most of which were salaries and wages amounting to 109 million shekels for this ministry...!!

-        As for the "economic development" sector, its share of spending was 456 million shekels, of which salaries and wages were 165 million shekels, and development expenditures were 205 million shekels — I explained the nature of development expenditures in a previous post on this matter — and the Ministry of Agriculture was the largest share in this sector with expenditures amounting to 167 million shekels..

-        As for the "social services" sector, its share was 6,476 million shekels (six billion, four hundred and seventy-six million shekels), of which salaries and wages for this sector were 2,856 million shekels (two billion, eight hundred and fifty-six million shekels), social contributions of 226 million shekels, goods and services of 1,232 million shekels, transfer expenditures of 1,808 million shekels — I had clarified the nature of transfer expenditures in a previous post — and 346 million shekels for development expenditures; the share of the Ministry of Education and Higher Education was 2,689 million shekels (two billion, six hundred and eighty-nine million shekels), and the item of salaries and wages in that ministry amounted to 2,125 million shekels (two billion, one hundred and twenty-five million shekels), while the Ministry of Health’s share of spending in this sector amounted to 1,683 million shekels (one billion, six hundred and eighty-three million shekels), of which salaries and wages were 630 million shekels — noting that the Ministries of Education and Higher Education and the Ministry of Health employ 70% of the civil public employees in Palestine, where the number of government civilian employees exceeded 77 thousand employees; of this number the education sector has more than 42 thousand employees and the health sector around 12 thousand employees.. whereas the number of military employees reached 51 thousand military employees...! as stated in the 2018 budget data — and the Ministry of Social Affairs’ share of these sector expenditures was 1,318 million shekels (one billion, three hundred and eighteen million shekels), of which salaries were 47 million shekels, while the Ministry of Prisoners’ Affairs’ share of these expenditures amounted to 736 million shekels..!!

·       Overall, total public expenditures – cash basis — in 2018 were 13,134 million shekels with an achievement rate of 81%; of this, salaries amounted to 5,946 million shekels with an achievement rate of 75%, social contributions 214 million shekels, use of goods and services 1,549 million shekels with an achievement rate of 74%, 246 million shekels for interest on debt with an achievement rate of 81% - the reason being the postponement of interest on one external loan -, and 4,016 million shekels for transfer expenditures with an achievement rate of 81%, small capital expenditures of 32 million shekels with an achievement rate of 42%, and development expenditures of 1,003 million shekels with an achievement rate of 53%!!.. and net lending of 967 million shekels..

·       Note: The achievement rate means the ratio of actual realized figures compared with the figures contained in the 2018 budget.

·       Exchange rate of the official shekel at the Ministry of Finance - against the dollar: 4 shekels per dollar, and an effective rate on 31-12-2018 of approximately 3.76 shekels per dollar....

·       Date: 15-2-2019