The Palestinian Financial Crisis: A Single Hand Does Not Clap

It is easy to point fingers at the government and hold the Ministry of Finance responsible for any delay in salaries or decline in public services, but it is more challenging to read the Palestinian financial scene in all its complexities and to understand the extent of the exceptional pressures faced by public finances at this stage. Before judging any financial performance, it is necessary to pause at the nature of the available resources and the size of the challenges it faces.

The Palestinian budget primarily depends on three main sources of funding: the clearance funds that the Israeli occupation collects on behalf of the Palestinian government, local revenues generated from taxes, fees, and services, as well as foreign grants and aid.

Under normal circumstances, the clearance funds constitute between 65% and 70% of total public revenues, with an average monthly amount ranging between 800 and 900 million shekels, making them the backbone of Palestinian public finances and the most influential factor in the government's ability to meet its financial obligations.

However, the current financial reality is completely detached from any normal economic conditions. The occupation continues to hold and deduct large portions of the clearance funds as part of a policy aimed at undermining the ability of Palestinian institutions to continue, while at the same time external support is experiencing an unprecedented decline compared to previous years, coinciding with a drop in local revenues due to economic contraction and the repercussions of the war on Gaza.

In light of this situation, the Palestinian government found itself facing one of the most complex financial crises since the establishment of the Palestinian National Authority, after the three revenue sources faced simultaneous and unprecedented pressures.

Under these circumstances, the Ministry of Finance is not merely managing a temporary liquidity crisis or a traditional financial deficit, but rather faces a structural challenge that affects the sustainability of public finances and the fulfillment of its core obligations. It is required to secure a portion of the salaries of public sector employees, provide operational expenses for government institutions, maintain essential services benefitting more than 5.5 million Palestinians, and continue to meet financial obligations despite limited resources and increasing pressures.

Therefore, the government had to, for extended periods, disburse salaries at rates ranging from 50% to 70% of the owed salary, not out of disregard for the suffering of employees and their families, but in an attempt to manage the limited resources as efficiently as possible, distributing them to the largest number of essential obligations, to prevent the complete collapse of public services or a total halt in the disbursement of dues.

Nevertheless, this reality does not absolve successive governments of responsibility. Citizens have the right to ask: Why was there no preparation for such a phase? Why were more resilient economic policies not built to withstand crises? And why has the Palestinian economy remained hostage to such external factors?

These are legitimate questions, and some of the responsibility indeed falls on successive governments that have not succeeded in building a more independent economy or in developing adequate alternatives to cope with long-term crises. However, acknowledging this responsibility should not obscure the most influential factor in the crisis, which is the Israeli policies that directly target the ability of the Palestinian economy to grow and sustain itself.

It is illogical for the occupation, which has held or deducted more than 13.8 billion shekels of Palestinian funds in recent years, restricted movement and trade, confiscated land, and undermined investment and development opportunities, to be a secondary factor in the public discourse, while the government alone becomes the primary and sole accused in every financial or economic crisis.

Criticism is necessary, and accountability is a legitimate right, but justice requires placing responsibilities in their true context, away from simplification or narrowing the view to one side.

The real problem is that a wide segment of the public debate has become preoccupied with describing the crisis rather than focusing on pathways to address it and mitigate its effects. Everyone talks about the scale of the problem while discussions about possible alternatives or ideas and initiatives that could contribute to enhancing resilience and coping with the escalating repercussions of the crisis have diminished.

In light of an economic war targeting the Palestinian person, institutions, and resources, the need for collective thinking about solutions becomes more pressing than exchanging accusations or merely describing the reality.

The public also needs a broader and deeper understanding of the details of the financial crisis. Understanding the challenges does not mean justifying or accepting them, but it helps to evaluate them more realistically and objectively. A citizen equipped with accurate information is more capable of participating in public discourse, more willing to offer proposals and solutions, and less susceptible to rumors and disinformation that usually thrive in times of crisis.

Confrontation is no longer limited to its military and political dimensions, but has taken on a direct economic aspect targeting the constituents of societal resilience and the ability of Palestinians to continue, produce, and maintain a minimum level of stability. It is a war targeting the employee, worker, merchant, and farmer, as well as institutions, services, resources, and development opportunities, aiming to undermine trust, hope, and stability as much as it targets the economy itself.

Despite all the legitimate criticisms, thousands of employees in government institutions, particularly those working in the Ministry of Finance, continue to perform their daily tasks to manage an extremely complex and intertwined financial crisis, a crisis that could burden countries with significantly larger resources and capabilities. While we may disagree with certain policies or decisions, it is fair to acknowledge that managing this exceptional reality is not an easy task.

What is needed today is not to stop the criticism, but to elevate it. Criticism that only diagnoses problems without providing alternatives remains incomplete; responsible criticism is the one that combines accountability and proposal, revealing flaws and contributing to their remedy, thus enhancing the national capacity for resilience and confrontation.

Managing the Palestinian financial crisis is not the sole responsibility of the Ministry of Finance, but rather a national challenge that requires genuine partnership between official institutions, the private sector, experts, academics, media, and citizens. Accountability remains a genuine right for citizens, as transparency is an obligation on institutions, but confronting exceptional challenges also requires collective awareness of the size of risks and the nature of challenges.

Major crises cannot be faced with mutual accusations, but through the integration of efforts and the unification of national energies. In light of a war targeting land, human beings, and the economy together, enhancing economic resilience becomes a shared national responsibility, no less important than any other battle the Palestinian people are fighting in defense of their future and their right to a dignified life.