Palestinians gauge economic impact of reconciliation
Now that Hamas and Fatah have agreed to reconcile, the Palestinian government faces the problem of paying the salaries of tens of thousands of employees from the Gaza Strip as it tries to revive the deteriorating economic situation.
Despite numerous failures in the past, many Palestinians and officials involved in the Hamas-Fatah reconciliation seem optimistic about this attempt. They now are evaluating the potential economic effects of the national consensus agreement signed Oct. 12 that reunites Fatah, which controls the West Bank, and Hamas, which administers the Gaza Strip.
The Palestinian Authority (PA) met Oct. 3 in Gaza for the first time since 2014, and the consensus government said Oct. 20 it will rotate its weekly meetings between Gaza and the West Bank. PA ministers will visit Gaza this week.
Palestinians have raised a number of questions about the financial role the consensus government will play once it takes over its responsibilities in Gaza and how it is set to deal with issues such as public sector employees, tax collection and Gaza’s inclusion in the general budget.
Moin Rajab, an economics professor at Al-Azhar University in Gaza, told Al-Monitor, “Reconciliation will help revive the Palestinian economy, as national consensus will generate large revenues for the budget, thus allowing the economy to overcome many problems plaguing the Gaza Strip, especially unemployment. Reconciliation could even lead to establishing a central bank either in Gaza or the West Bank and the issuance of a Palestinian pound.”
