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No viable solution is expected to be found for the protests that swept the West Bank (WB) in September 2012, against the backdrop of rising prices and the delayed payment of salaries, except as part of a comprehensive national solution. It seems that the future of these protests is linked, in one way or another, to the future course of the Arab Spring in general, and in Egypt and Syria in particular.

The severity of these protests has decreased sharply, and it is unlikely that they will escalate further and continue over the near term. Nevertheless, the protests have shown that the situation in the WB remains fragile and subject to quick collapse, at any given moment.

The Palestinian Street

The Nature of the Protests

Fayyad’s Government

The Essence of the Crisis

A Likely Scenario


A wave of protests swept the WB, throughout all sectors, disrupting public life. This forced the leadership of the Palestine Liberation Organization (PLO), the reference point for the Palestinian Authority (PA) that is responsible for the latter’s economic policies and general administration, to hint at the possibility of sacking the prime minister and reshuffle the cabinet, and reconsider all Oslo Accords including Paris Protocol, the economic appendix to the Accords,. This means that the peace process would return to square one. All this makes it increasingly important to analyze these protests and their impact on the PA, on the relations with the occupation, and on intra-Palestinian relations.

 The Palestinian Street

One cannot overestimate the role played by the deteriorating economic conditions in precipitating the protests. Indeed, the deficit in the PA’s budget has deepened, with repeated delays in salary payments, which were often disbursed in two batches. Unemployment and poverty also increased dramatically, in conjunction with deterioration in health and education services, a decline in local and foreign investment, and the growth of the PA’s debt service payments to an alarming degree. Yet the economic factor alone is not sufficient to explain what has happened, and what could indeed still happen.

Palestinians continue to live under occupation, which has unleashed racist policies and cynical plans for settlement expansion, particularly in Jerusalem, encouraging the settlers to maintain and escalate their assaults in an unprecedented manner.

Palestinians also suffer as a result of a complete lack of any political horizon, and the failure of all efforts to bring about national reconciliation, and the efforts to revive the so-called peace process and resume the negotiations. At the same time, the Israeli government continues to pursue a carrot and stick policy with the PA, with a view to restructure it and force it to accept the status-quo and comply with Israeli conditions and dictates, even if this leads to the toppling or replacement of the PA chief.

The campaign by the Israeli government, especially by Israel’s Foreign Minister Avigdor Lieberman, against the Palestinian leadership and specifically President Mahmud ‘Abbas, can be understood within this context.

On the other hand, Hamas has so far failed to present a practical alternative that is acceptable to Fatah, which would lead the Palestinians out of the spiral of the Oslo Accords and their commitments. Instead, Hamas was forced to coexist with the facts on the ground and suspended its resistance, giving priority to maintaining and strengthening its administration of the Gaza Strip (GS).

It is only in this context that we can understand what happened. The Palestinians live under a growing sense of anxiety and uncertainty without a comprehensive strategic alternative. The Palestinian leadership and the Palestinian factions, without exception, all talk of alternatives without matching this with any measures to build them on the ground, something that keeps them all on the same playfield imposed by the Oslo Accords.

Indeed, the PA’s future is in doubt, as it is prone to collapse at any moment. The relationship among its senior leaders (e.g. the president and Fatah on one side, and the prime minister on the other) is very tense.

Furthermore, the expected results of the Arab Spring in the near term, especially in light of the continuing schism (between Fatah and Hamas), are yet to be seen. Instead, it seems that the wave of uprisings sweeping the Arab world have only managed to somehow marginalize the Palestinian issue.

Meanwhile, Hamas’s government in GS continues to be under siege, and faces the prospect of Israeli aggression, should it refuse to abandon resistance and comply with the conditions of the Middle East Peace Quartet.

 The Nature of the Protests

Returning to the protests, we must make the distinction between how they started, and where they ultimately ended. The protests started by raising slogans against high costs of living, and demanded amendments to the 1994 Paris Protocol and the resignation of Salam Fayyad’s cabinet.

These protests were peaceful and disciplined in the beginning, but evolved in several places to calls for the abolition of the Oslo Accords and the Paris Protocol altogether, as well as the resignation of both the head of the PA and his prime minister. They also led to assaults on private and public properties and institutions, and confrontations between the police and protesters, especially in Hebron and Nablus – with up to 200 injured on both sides.

 Fayyad’s Government

The government hesitated at first to respond to the demands of the demonstrators, but in the end, it caved in under pressure from Fatah and complied with some demands.

For example, the government reversed its move to raise fuel prices, with the exception of gasoline; reduced the Value Added Tax (VAT) to 15 %; announced cuts to government expenditure; and instated price controls while stepping up its monitoring of prices, imposing large fines on manipulators. In addition, salaries of more than 4,500 shekels (about $1,172) were cut by 10 %, to be reimbursed later.

These measures helped somehow in alleviating the crisis, but they did not address them in essence, and do not guarantee that things will not get worse in the future.

Another thing that helped the PA control the situation was that the Israeli government rushed to transfer 250 million shekels (about $64 million) from the customs revenue collected by Israel ahead of schedule, and decided to pursue policies to increase the employment of Palestinians in Israel. Furthermore, Israel embarked on a study to improve the process of collecting revenues, without showing willingness to amend the Paris Protocol, even though the original text

[of the protocol] allows for its continuous review and the possibility of amending it.

Another thing that could help the PA mitigate the crisis is the move by the European Commission to allocate 100 million euros (about $130 million) in the form of emergency assistance to the authority. Moreover, the US administration began efforts to persuade Congress to transfer $200 million, which had been withheld to put pressure on the PA to refrain from going ahead with its UN membership bid and also from reaching reconciliation with Hamas, unless this reconciliation comes in accordance with American-Israeli conditions inherent within those of the Quartet mentioned earlier.

 The Essence of the Crisis

It is easy to blame Salam Fayyad and his economic and neoliberal policies, which are in line with the dictates of the World Bank, for the financial crisis. While this is indeed true, as these policies are responsible for this crisis, the latter is rooted in the Oslo Accords and its annexes, and the political, economic and security commitments that result from them. To be sure, these have put the PA in a subservient position to the occupation, which it now served, especially in the economic side. This is despite the fact that it [the PA] was supposed to be a provisional step that expired on May 1999, and not a permanent arrangement that exempts the occupation from its responsibilities.

 A Likely Scenario

Based on the above, there is no radical solution to the financial crisis except as part of implementing a strategic vision which addresses the overarching Palestinian predicament at all levels, especially the Oslo Accords. A comprehensive alternative, which no one faction can bear on its own, and is rather everyone’s responsibility.

The Palestinian protests are not expected to escalate further in the near future, because such a scenario is linked to several issues that are not limited to economic factors, as important as they may be, but also include ones that are closely related to how Palestinian reconciliation will progress, and the extent of pressure put by Israel, which has a large stake in seeing the PA collapse. In addition, there are the possible developments of the Arab Spring, particularly in Egypt and Syria, and the question whether the PLO will go ahead with its UN bid, and finally, the success or failure of the efforts to jumpstart direct negotiations, which the US administration is pushing for.

What makes this estimate likely is explained below:

First: The PA represents a point where the interests of many Palestinian, Israeli, and Arab factions converge, in addition to regional and international ones. This renders its collapse without a reasonable or feasible alternative a leap into the unknown, whose repercussions no one knows, or indeed how to control the situation that it may engender.

Second: There is the fact that entities within Fatah were the ones to initiate these protests in the beginning, with a green light from the president, who called the protests a Palestinian spring. In addition, the police and security services did not intervene to stop the protests, and instead offered facilitations and protection for them.

It is possible that this happened as the financial crisis was blamed on the policies pursued by the government of Salam Fayyad, in an attempt to settle the score with him. This is especially valid since, in recent months, Fayyad sought to portray himself as representing a third way different from both Fatah and Hamas.

Fayyad declared that he might run in the next elections if he had a reasonable chance to win, and criticized the lack of readiness of both Fatah and Hamas for the elections. Fayyad also expressed positions that were different from the declared policies of the president and the PLO vis-à-vis the negotiations, the reconciliation and on how to deal with Israel.

This was evident in numerous occasions, for example he refused to deliver a letter from the president to Benjamin Netanyahu, although ‘Abbas himself said that Fayyad would deliver it. Another example involves Fayyad calling for general elections in the WB.

Al-Zaytouna Centre thanks Mr. Hani al-Masri for authoring the original text on which this Strategic Assessment was based.

The Arabic version of this Assessment was published on 17/10/2012