Salam Fayyad caved in: Exactly a week after the announcement of raising fuel prices and the VAT rate, the Palestinian Prime Minister announced [on Sept. 11] a series of rollbacks to restore peace and quiet in the Authority’s cities.
Following violent protests in the Palestinian Authority cities, Prime Minister Salam Fayyad set rollbacks on taxes and fuel prices, report Rimon Margia and Eli Bardenstein, while Prime Minister Benjamin Netanyahu advanced $64 million to the authority.
On the heels of the crisis: Netanyahu orders the transfer of a quarter billion shekels to the [Palestinian] Authority
Rimon Margia and Eli Bardenstein
September 12, 2012
September 12 2012
Simultaneously, Prime Minister Benjamin Netanyahu gave the order to transfer an advance payment of 250 million shekels [about $64 million] to the authority, due to the crisis in which it is currently embroiled. [The money in question is 50 percent of the total amount Israel collects for the PA at checkpoints each month. Under interim peace agreements, Israel collects millions of dollars in customs, border and some income taxes, and transfers the funds to the West Bank government.]
Netanyahu, after consulting with Finance Minister Yuval Steinitz, delivered the directive via his special emissary, attorney Yitzhak Molcho, and with the recommendation of the Coordinator of Government Activities in the Territories, Gen. Eitan Dangot . “We are active in several spheres in order to assist the Palestinian Authority cope with its economic problems
,” Netanyahu said earlier on Sept. 11. “We are making efforts to assist the Palestinian Authority to get past this crisis. I hope that they will succeed in doing so, it is a joint interest of ours too.”
Recently, public ire has intensified and turned into clashes and strikes of taxi and truck drivers. In response, in a news conference conducted by Fayyad in Ramallah on Sept. 11, he announced a number of steps the Authority would take: The first was a partial payment of August salaries on that same day (Sept. 11) to the authority’s employees. It was also decided to lower the VAT rate to 15% as of Oct. 1. Fayyad even decided to roll back the price hike on fuel — the price hike that instigated the protests — to its previous level, before the increase.
Starting Sept. 12, a liter of 95 octane gasoline costs about 7.50 shekels [about $1.90] in the authority, and a liter of diesel oil will go back to 6.95 shekels [$1.75].
Despite the fact that the price-hikes were scrapped, the Palestinian public continues to protest. The Student Associations called for a partial strike of studies on Sept. 12, and the taxi drivers made it clear that they would continue taking to the streets in protest. The demonstrations continued on Sept. 11, but with lower turnouts. Hundreds protested on the streets in Ramallah, waving pitas in protest at the cost of living.