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First Pages of Chapter One: The Internal Palestinian Scene 2012-2013. 


There were no serious developments in the internal Palestinian situation during 2012 and 2013. Despite consensus on the choice of prime minister being made in February 2012, he was not able to form a consensus government for the subsequent two years. Issues related to reconciliation remained in limbo overall, and serious interest declined in the efforts to put the Palestinian political house in order. Meanwhile, the efforts for a peaceful settlement continued at the expense of reconciliation and reform, and Palestinian division between the West Bank (WB) and Gaza Strip (GS) grew deeper and more entrenched.

This chapter attempts to analyze the internal Palestinian situation during 2012 and 2013, and the performance of the governments in Ramallah and Gaza, as well as Palestinian reconciliation issues, relations among Palestinian factions, and the problem of security forces and their conduct at home.

First: The Emergency Government in the West Bank:

Between 2012 and 2013, the emergency government in the WB headed by Salam Fayyad, and then Rami Hamdallah who succeeded him in 2013, continue to operate, while perpetuating the situation that emerged following the internal Palestinian division.

Palestinian resistance forces continued to accuse the emergency government of lack of constitutional legitimacy, since it did not seek to obtain a vote of confidence in the Palestinian Legislative Council (PLC). Meanwhile, the government suffered from a crippling financial crisis amid tough economic conditions, and lower receipts from foreign donors.

The past two years saw a limited crackdown on corruption in the Palestinian Authority (PA), which then held local elections in the WB in isolation from GS. The relationship between the two Palestinian administrations saw a lot of tension and mutual accusations.

Although the PA was able to obtain recognition as a non-member state of the United Nations (UN), increased Israeli Judaization and settlement activities, combined with the ongoing withdrawal of powers of PA sovereignty over the WB areas, made it increasingly weak and politically impotent.
The most important issues related to the emergency government can be addressed under the following themes:

1. The Worsening Financial Crisis and Economic Conditions

The financial crisis was the most important issue facing the emergency government in 2012 and 2013. In early 2012, Prime Minister Salam Fayyad called for urgent action to reduce the budget deficit, which stood at $800 million  in 2011, and was expected to hit $1.1 billion in the budget of 2012. 

The fall in foreign financial support, as some donor countries reneged on their financial obligations, caused a severe financial and economic crisis for the PA, forcing it to take unpopular measures such as spending cuts and tax increases,  while calling on banks to loan the PA up to $300 million.  Despite these conditions, in mid-February 2012 Fayyad’s government had to reduce the highest income tax bracket to 20%, after protests by civil society groups.

Before the end of March 2012, Fayyad’s government passed the 2012 budget, which contained a deficit of over $1 billion.

With the aggravation of the financial crisis in the summer of 2012, Fayyad conducted secret negotiations with Israeli Finance Minister Yuval Steinitz, and signed an agreement with him on revenues and the transfer of goods between the PA and Israel.  Fayyad also sought advice from the governor of the Bank of Israel Stanley Fischer on how to overcome the financial crisis plaguing the PA.  However, this was not translated into a breakthrough, in light of the difficult economic conditions, high unemployment, and the dire financial situation of the PA at the end of the year.

With the beginning of 2013, the Fayyad government published data showing that the public debt of the PA was close to nine billion shekels (about $2.4 billion), which went to show the depth of the financial crisis under which the PA in Ramallah was reeling.

Before the end of March, Fayyad’s government approved a $3.8 billion budget for 2013, with a deficit that exceeded one billion dollars.  This was inconsistent with Fayyad’s plans to achieve economic prosperity. Ultimately, the heart of the problem is the occupation itself, not just the conduct of the PA and individuals in government.

Despite some emergency aid provided by the Kingdom of Saudi Arabia (KSA), the United States of America (US), and some European Union (EU) countries to the tune of $500 million in July and August,  the budget, according to the new head of the emergency government Dr. Rami Hamdallah still had a $550 million deficit by the end of 2013. 

The financial crisis is expected to continue for the time being, in light of the PA’s dependence on foreign aid, and the financial and economic agreements signed with Israel. This crisis reflects in various ways the injustice and inequality brought about by the Oslo Accords and other agreements related to them, which have imposed dependency on Israel and made the PA hostage to its policies.

2. Opening Corruption Cases

With the beginning of 2012, the Palestinian Anti-Corruption Commission (PACC) continued to pursue corruption cases involving a number of ministers in the emergency government. The Minister of Economy Hassan Abu Lebda was referred to court on 10/2/2012,  in addition to the Minister of Agriculture Ismail Daiq. The Foreign Minister Riyad al-Maliki was also referred to the PACC on 27/4/2012.

Despite assurances by the head of the PACC Rafiq Natsheh, who said he was in contact with competent authorities abroad in order to extradite a number of individuals suspected of embezzlement and fraud to the tune of millions of dollars,  the PACC was delayed, and in the end, it only took limited measures, confiscating funds and assets held by Muhammad Rashid and Walid Najjab.

Aware of the extent of the PACC’s shortcomings, Fatah lawmaker Najat Abu Bakr accused the Ministry of Finance in Ramallah of corruption through side deals with major companies, demanding President Mahmud ‘Abbas open an investigation into these abuses.

It was clear that the effort to deal with corruption remained inadequate and limited, and did not meet the expectations pinned on them. It is not expected that any serious change will take place during the next phase.

3. Cabinet Reshuffles

Despite repeated calls by Fatah to President ‘Abbas to sack and replace Prime Minister Salam Fayyad, ‘Abbas repeatedly reappointed Fayyad to head a cabinet with an amended lineup. ‘Abbas ordered a cabinet reshuffle under Fayyad, and the new government swore oath before ‘Abbas on 16/5/2012.

Yet, with rising objections and criticisms by the Fatah leadership over Fayyad’s tenure, ‘Abbas accepted the latter’s resignation on 14/4/2013, and appointed Rami Hamdallah as his successor.

But Hamdallah resigned 18 days after he was sworn in, on 7/6/2013, because of a sharp dispute with his two deputies (appointed by ‘Abbas) over powers. His resignation was accepted, but he continued to serve in a caretaker capacity, until the dispute was resolved. Hamdallah was re-appointed as prime minister, and was sworn in before ‘Abbas on 19/9/2013. 

One of the reasons that led to Fayyad’s resignation was the undeclared conflict between him and ‘Abbas. Salam Fayyad tried to take advantage of his position, and his financial and administrative influence, to form a bloc of supporters. Fayyad benefited from US support or reassurance by his policies. ‘Abbas ultimately accepted his resignation after becoming increasingly concerned about him, taking advantage of calls from Fatah for Fayyad’s dismissal.

4. The Elections

On 11/7/2012, Fayyad’s government approved the holding of local council elections in 93 localities, which were conducted on 20/10/2012. The Central Elections Commission (CEC) approved the results, and the voter turnout was 55%. 

The results of the local elections seemed lackluster and half-hearted, after the resistance factions, led by Hamas, declared a boycott. This invalidated any true competition in the elections, as they were limited to electoral lists affiliated to Fatah, the PLO, and independents, which included Fatah members ostensibly expelled from the movement.

Hanna Nasir, chairman of CEC that oversaw the municipal elections, acknowledged there were violations following the closure of the polls, but stressed that this was of moderate scope, and pledged to address all violations.

Later, the CEC confirmed in a press conference that the complaints it received from monitoring groups did not affect the election results. The CEC therefore endorsed the results, noting that it had received a number of complaints that were dealt with first hand on election day.

The municipal elections highlighted the internal split within Fatah in many areas of the WB. Indeed, figures dismissed from Fatah ran on independent lists in some districts, defeating official Fatah candidates and lists. The most prominent example of this took place in the city of Nablus, where the Fatah electoral list was headed by Amin Maqboul, Secretary of the Fatah Revolutionary Council. Maqboul failed to defeat Ghassan al-Shak‘a, who had been dismissed from Fatah. Al-Shak‘a was then a member of the Executive Committee of the Palestine Liberation Organization (PLO)…

Chapter One: The Internal Palestinian Scene 2012-2013 

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Al-Zaytouna Centre for Studies and Consultations, 29/10/2014