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September 25, 2016 / 22 Elul, 5776

Posts Tagged ‘World Bank’

Ahmad Tibi, Yisrael Beiteinu, Cooperating to Protect Arab Workers from Unjust Taxation

Monday, August 15th, 2016

Joint Arab List MK Ahmad Tibi, political advisor to Palestinian Authority Chairman Yasser Arafat from 1993 to 1999, and PLO representative at the 1998 Wye River negotiations, is not a politician one easily imagines in cahoots with MK and former Navy officer Oded Forer (Yisrael Beiteinu). But last week, at a meeting of the Knesset Finance Committee, the two legislators supported each other’s arguments, even though those arguments were diametrically opposed.

At the meeting, the Finance Ministry requested the Knesset’s approval for a rule that was described as aimed at strengthening economic cooperation with the Palestinian Authority regarding the employment of PA Arab workers. As reporter Zeev Kam of Makor Rishon put it, the rule sounds innocent enough. But, of course, the devil is always in the details.

There are three categories of PA Arab employees: those who work in the PA, those in the Jewish communities of Judea and Samaria, and those who work inside “greenline” Israel. Workers in the latter two categories earn on average three times what their brethren working inside the PA do. This has to do with the fact that Israelis in and out of the greenline just pay more reasonable salaries, but also with the fact that Israel endows these workers with certain tax benefits.

And those tax benefits are what the Israeli Finance Ministry is after, seeking to match the tax rates of PA Arabs working inside and outside the PA. The estimate is that by cutting the tax benefits, the PA stands to earn about $45 million a year — taken from the PA Arabs who are lucky enough to qualify for work for Israeli employers.

Why would Israel be so invested in taking money away from the only PA Arabs who still have something good to say about it, and give it to the PLO, who will spend this money dragging Israel through the mud in international forums? The two representatives of the Finance Ministry at the Knesset Finance Committee explained that the World Bank has recommended the move to impose the same tax rate on all PA Arab workers, regardless of where they work.

Mind you, it took the MKs some time to decipher the financial mumbo jumbo heaped on them by the two civil servants, but in the end, both Tibi and Forer were equally outraged, each for his own reason, and both supporting each other in the strangest example of political bedfellowship.

MK Tibi was annoyed that instead of forcing Israel to pay up the PA tax money it has frozen for a variety of reasons (the PA’s awarding stipends to terrorists’ families, the PA owing the electric company half a billion dollars), the Finance Ministry would simply charge the most vulnerable workers. He was also upset at the fact that when seeking to equate the pay of PA Arabs making $400 a month and those making $1,300 a month, the financiers decided to cut everybody down closer to $400.

Tibi, an obstetrician, suggested bitterly that since there are hospitals in the PA that provide inadequate treatment, “using the same principle a Palestinian patient being treated in an Israeli hospital, instead of receiving two infusion bags should receive only one, to make it even.”

MK Forer said he was at his wits’ end trying to understand the Israeli concern for the welfare of the Palestinian Authority. “There are about 70 thousand Palestinian workers with permits in Israel,” he said. “Out of those only one was involved in a terror attack. Which points to the fact that these people really come here to earn their bread. And you now wish to take more taxes from them, not to fund positive activities, but so the money would go to the Palestinian Authority. And what does the PA do with these monies? Pay those who are in prison for security violations.”

“Finally,” Forer said, “taking the example of a plant in [the Samaria Jewish community of] Barkan, a Palestinian who would sell the Israeli merchandize produced in Barkan would suffer severe punishment according to Palestinian law, imprisonment and fines.” In other words, Israel sets out to cut the income of a PA Arab who supports Israeli products, and give the money to the PA which boycotts the same products.

According to Kam’s report, the attempt on the part of the Finance Ministry to sabotage Israeli relations with PA Arabs to support a hostile PA died in committee.

JNi.Media

In New US – PA Talks on Recovering Debt Ridden Economy, Fingers Point at Israel

Saturday, May 21st, 2016

Palestinian Authority Economy Minister Abeer Odeh and US Assistant Secretary of State for Economic and Business Affairs Charles Rivkin will meet Sunday in Ramallah for talks on developing the PA’s economy. At this point, the PA simply cannot pay its bills and is facing serious problems paying its government employees, from teachers to security forces. According to Trading Economics, in 2014 the PA recorded a Government Debt to GDP rate of 17.30% of the country’s Gross Domestic Product. Government Debt to GDP in the PA has averaged 18.92% from 1995 until 2014, reaching an all time high of 26.36% in 2007 and a record low of 2.93% in 1995.

The economies of the PA and Gaza strongly depend on their relationship with Israel, so that when the Israelis feel safe to permit documented (and many undocumented) Arab workers into their country, the Arab economy improves. And when there’s a war or an intifada, the Arabs go without.

The Palestine Monetary Authority (PMA) most recent report, from 2014, shows high and rising levels of unemployment, which continued to be one of the main challenges to the economy. In 2014, it rose to 26.9%, compared to 23.4% in 2013. A main contributor was an exceptionally expanding rate in Gaza Strip, where unemployment reached 43.9%, compared to 32.6 percent in 2013, while the same rate declined in the PA from 18.6% to 17.7% during the same period. This rise in unemployment did not stop nominal daily wages from rising across different regions. Yet contradictory inflation trends have created discrepancies in real wage growth, as while real average daily wage for workers in the PA, and Israel and the Jewish communities of Judea and Samaria improved by 0.9% and 5.6% respectively, real wages in Gaza declined by 1.5% during 2014.

The PA Arabs’ dependence of Israel was made all too clear this past winter, when The Israel Electric Corporation (IEC) announced the PA and individual Arab municipalities have racked up a debt of close to half a billion dollars which the company could no longer absorb. The debt was split about $400 million to $80 million between the PA and the cities respectively.

In April, the IEC reached a temporary agreement with the PA to put an end to the temporary power cuts it had been imposing on a succession of municipalities, in exchange for paying off a small portion of the overall debt. Meanwhile, the Arab-run Jerusalem District Electricity Company, which owes the IEC $371 million out of the debt, sued the IEC in Israel’s High Court last April, saying the IEC’s behavior constituted “collective and disproportionate punishment” and showed “blatant and harmful disregard for a public that pays its electricity bills regularly.” It also suggested the IEC’s power cuts compromised basic consumer rights to access an essential resource.

“I don’t know of any company that would agree to do nothing about a 1.74 billion shekel ($450 million) debt owed by another company,” IEC chairman Yiftah Ron Tal said at the time. “We weren’t left with any choice. We’re limiting electricity in a proportionate way.”

But the High Court of Justice paid no attention to the complaints of the Israeli CEO, and issued an interim injunction on prohibiting service cuts to the eastern Jerusalem Arab power company.

IEC responded to the ruling with an angry statement: “The Israel Electric Corporation respects the High Court ruling but demands the issue over the growing debts of JDECO which reach 1.4 billion shekel ($360 million) be resolved quickly. JDECO debts continue to grow to an astronomic figure; like any other business, it is the legitimate right and the responsibility of IEC to take the necessary measures to resolve a problematic debt which has been a burden for all Israeli electricity consumers.”

Israel’s ambivalence about collecting the debt from the Arabs in both Judea and Samaria and eastern Jerusalem and Gaza has produced a reluctant and ineffective method of getting the money from the taxes and VAT Israel collects on Arab wages and products. As a result, Israel was rebuked this month by the World Bank for ruining the PA economy by, essentially, withholding money Israel is rightfully due.

The new World Bank report estimates that the Palestinian Authority is losing $285 million in revenues annually under the current economic arrangements with the Government of Israel. The report states that these revenues could significantly ease the Authority’s fiscal stress. As was to be expected, there is no mention in the condemning report of the half billion dollars in free power Israel has poured into the PA.

“If revenue losses are mitigated, this can reduce the 2016 fiscal deficit to below $1 billion, and narrow the expected financing gap by more than 50 percent,” Steen Lau Jorgensen, World Bank Country Director for West Bank and Gaza said in a press statement.

In other words, if only Israel agreed to take the half billion dollars from Israeli power consumers and let the PA Arabs continue to receive free electricity, an Arab economic miracle would be just a matter of time.

The report also cites irregularities on Israel’s part in conducting revenues clearance, which have not been systematically implemented. The revenue sharing arrangements, outlined by the 1994 Paris Protocol, through which the Government of Israel collects VAT, import taxes and other revenues on behalf of the Palestinian Authority, and shares them on a monthly basis, have not been systematically implemented.

The majority of the estimated fiscal loss results from tax leakages on bilateral trade with Israel, and undervaluation of PA imports from third countries. In other words, the Israelis have been running a messy tax and payment system, as well as a messy debt collection system.

JNi.Media

Debt-Ridden PA Owes Israel $400 Million for Electricity

Thursday, September 24th, 2015

The Palestinian Authority now owes the Israel Electric Corporation $400 million (1.7 billion. shekels) despite the trumpeted agreement nearly a year ago in which Israel resumed transferring tax collection revenues to the PA for the umpteenth time.

The debt-ridden regime in Ramallah supposedly would use some of the money to cut the debt for electricity, but Israel Electric CEO Ron Tal says the debt has grown to an “insane” amount.

He wants to start cutting the power to the Palestinian Authority, but that is unlikely to happen because the world would start screaming, “War Crime! War Crime.”

In the United States, and elsewhere, if someone does not pay for water or electricity, the municipality or utility company pulls the plug, without being charged with a war crime.

But there is hope, sort of.

The World Bank has announced it is transferring another $25 million to the Palestinian Authority from its “Palestinian Reform and Development Plan Trust Fund” that the Bank manages to support the PA budget.

The World Bank stated:

The funds contributed by the governments of Norway and the United Kingdom will help support the urgent budget needs of the Palestinian Authority (PA), providing inter alia support for ongoing macroeconomic and public financial management reforms.

Since the fund was established in 2008, the World Bank has turned over to the Palestinian Authority a staggering $1.38 billion.

The World Bank statement did not mention anything about what reforms, if any, the Palestinian Authority has carried out, and instead it said the PA economy is suffering from a lack of foreign aid.

Off to the rescue is Prime Minister Rami Hamdallah, who will travel to New York this month for one of the Palestinian Authority’s favorite events, a donor’s meeting at which countries pledged billions of dollars for Ramallah.

Most of the pledges, especially from Arab countries, remain as pledges, just as the debt to the Israel Electric Corp. remains a debt.

Tzvi Ben-Gedalyahu

Watch Hamas Film Banned by Gaza U. because of Fears of Losing Funding [video]

Tuesday, May 5th, 2015

The Islamic University of Gaza, which has close links with Hamas, has banned students from screening a movie of Hamas terrorist activities because of fears it would lose funding from international sources.

The university was co-founded by Sheikh Ahmed Yassin, who was one of the founders of Hamas and one of its most deadly terrorists before the IDF assassinated him.

The movie deals with the First Intifada.

Arab media reported Tuesday that the university banned students Sunday night from screening the film that shows terrorists in action and clashes with Israeli soldiers.

An expose in 2008 revealed that the U.S. government authorized almost $1 million in foreign aid to the Islamic University of Gaza despite multiple vetting of the school for ties to terrorism.

The prime minister of Hamas at the time sat on the Islamic University’s board of trustees.

Previous donors to the university have included the Union of Good, a worldwide collection of charities collecting money for Hamas and headed by global Muslim Brotherhood leader Youssef Qaradawi.

Other world donors have been the World Bank, Arab Student Aid International, United Palestinian Appeal, Islamic Relief, British Council, Islamic Development Bank and Human Appeal International.

The university has also recently been accepting donations from the Middle East Children’s Alliance for its rebuilding efforts.

Arab academics, writing on behalf of the Alliance, have claimed that the description of links between Hamas and Islamic University is a “false label.”

Tzvi Ben-Gedalyahu

Is Israel Hiding Water for Fat Cats’ Red-Dead Sea Pipeline?

Monday, December 9th, 2013

Politicians were falling all over themselves Monday to celebrate the signing in Washington of the agreement for what once was a pipe dream of a pipeline to pump water from the Red Sea to the Dead Seam, with the New Age of Peace involving Israel, Jordan and the Palestinian Authority.

“This is a historic measure, which realizes a dream of many years. We have here politically important strategic cooperation between that Israel, Jordan, and the Palestinian Authority,” said Minister National Infrastructures Silvan Shalom.

The first phase of the mammoth project will include a desalination plant in Aqaba and will pipe water into the Dead Sea, the lowest point of earth and which has gone lower every year to the point that there are real fears it will disappear altogether one day.

The idea sounds great, and if it comes off without a hitch, it definitely will change the face of the southern Negev and Arava regions and the Jordan Valley, on both sides of the Jordan River.

The Palestinian Authority, Jordan and Israel all are holding hands together in a project that is supposed to show that the need for water can overcome politics and distrust.

The agreement for what is officially known as the Two Seas Project was signed in Washington by Shalom and Jordanian and Palestinian Authority water officials. The ceremony took place at the World Bank, which is raising up to $400 million from donor countries and philanthropists.

The entire bill for a much larger Dead-Red conveyance project is around $10 billion.

This is the same World Bank that helped finance and engineer Israel’s turning over agricultural infrastructure and greenhouses in Gaza to the Palestinian Authority regime in 2005, after the expulsion of Jews and the withdrawal of the IDF.

That boondoggle does not mean that the World Bank is always right, but it certainly means it is not always right. It is more interested in politics than economics, and good politics today means creating facts on the ground for the Great Middle East Peace.

In five years, water is supposed to start flowing into the Dead Sea, but the proposed amount is only a fraction of what the Dead Sea loses every year because evaporation and industrial use, such as the Dead Sea Works.

The project will give Jordan much needed water resources. Israel has agreed to pump more water from the Kinneret (Sea of Galilee) for Jordan and the Palestinian Authority, which is Ramallah’s take for agreeing to forfeit claims that the northern part of the Dead Sea is to be under its sovereignty in its version of a Palestinian country.

So what could be wrong with such a project that increases the water supply and brings back the Dead Sea from levels that could endanger the environment?

Politically, like everything else in the Middle East, it is a gamble. Jordan is on the threshold of an explosion. “Palestinians” and Bedouin make up the bulk of the population but are least represented in the government. The Palestinian Authority still is a country on paper, most of it being the Euros on which it survives.

Financially, the project puts a tremendous burden on the world, but who cares so long as the new corporate universe needs these investments to feed their money machines.

The military-industry complex has sold trillions of dollars in weapons everywhere except Antarctica. Russian and China don’t care whether Iran gets a nuclear bomb so long as they can feed their appetite for billions of dollars by helping the Islamic Republic build nuclear facilities.

And now we have this new project to pump money into the engineering and construction firms who stand to make a bundle.

Environmentally, the project’s expert claim they have the knowledge and resources to overcome fears that pumping large quantities of Red Sea water into the Dead Sea could damage the Dead Sea’s fragile ecology. As sure as the World Bank is that the project will not upset ecology, the Friends of the Dead Sea are just as sure that the pipeline will destroy the environment

Let’s assume that the World Bank experts are right, which is a hefty assumption in an age where experts can prove anything they want.

The whole project may be unnecessary given that Israel’s own desalination plants will produce so much water that the Kinneret would reach flood levels every year, allowing the dam at the Kinneret to be opened to spill water into the Jordan River and down to the Dead Sea.

The Kinneret right now is about 2.6 meters, or 102 inches, below flood level and when the Degania dam would be opened. The lake usually rises more than that amount in a normal year.

It could rise even more because Israel has brought online three desalination plants and is building two more that can supply Israel with almost 70 percent of its water needs.

But the Water Authority has made an amazing decision. It plans to scale back production of desalinated water by 100 million cubic meters, the same amount that will be able to be produced at the facility under construction at Ashdod.

Globes pointed out last month that the government pays for overhead at the desalination plants and also pays for water that it does not buy, as per the contract. The bottom line is that the Water Authority will shell out 60 percent of the cost of water for fixed costs without receiving any water.

And what happens if there are a couple of dry years? Then the Water Authority will start pushing the desalination plants to work overtime while the level of the Dead Sea continues to drop.

Even worse, the Water Authority admitted to Globes, “Even if the plants don’t work at full capacity in the coming year, we will soon definitely need their output. Our models predict an even worse drought than the one before 2011 at the end of the decade. In addition, the Kinneret and aquifers still lack one billion cubic meters of water. The Israeli economy has a structural water shortage, and one rainy year does create a new reality.”

So why is it cutting back production?

Could it possibly be that the Water Authority does not want to open the dam at the Kinneret because doing so would help replenish the Dead Sea, and then how could the Red-Dead Seas project be justified?

Bringing back the Dead Sea to previous levels might not be possible, but it will be at least five years before the Dead-Red pipeline comes on line, and that assumes no political, financial and environmental delays. In the meantime, maximum production at the desalination plants would allow overflow from the Kinneret to add at least the same amount that is projected to come from the Red-Dead pipeline, and probably more in a rainy year, as is predicted this year.

The Water Authority’s reasoning for increasing pumping from the Kinneret instead of using desalinated water, and thus preventing the dam from being opened, is that “it is cheaper to pump water from natural sources than to buy water from the desalination plant at the full rate.”

The Water Authority made a fantastic Orwellian Double Speak statement to Globes. “There is no water surplus,” it said. “There is water production capacity for guaranteeing a reliable water supply, even during droughts. The Israeli government prepared for this in part by building seawater desalination plants, which supply water on the basis of need and the condition of the water economy. During droughts, when natural water supplies fall, we’ll need maximum production by the desalination plants, because the water demand does not change. In years with heavy rain, we have to deduce desalinated water production, because the variable cost is higher than the cost of natural water production.”

The Water Authority is ”saving” money by paying out most of the cost of desalinated water without using it, and it is lessening the need for the dam to be opened, which in turn deprives Jordan of water resources and deprives the Dead Sea of much needed water.

There is no water surplus because the Water Authority is preventing one.

Tzvi Ben-Gedalyahu

Jordan Crushed by Debt while Helping Fleeing Syrian Refugees

Tuesday, May 28th, 2013

Jordan’s Prime Minister Abdullah Ensour says the international community must do more than merely offer goodwill to help his country deal with the influx of Syrian refugees escaping the civil war ravaging their homeland, CNBC reported.

Ensour outlined how Jordan, with a population of six million—most of them Palestininas—is having great difficulty dealing with about one million refugees. “You can imagine the burden,” he said. “The impact of the presence of so many refugees who have nothing in their hands and who need shelter, need food, need medicine: they represent pressure on our resources.”

When asked whether the international community was doing enough, Ensour blunt responded: “Not much is coming, to be honest. We only have sympathy, understanding and goodwill, but that’s all and that does not suffice. These refugees expect three meals a day, they need shelter, hospitals, schools; all kinds of needs.”

According to CNBC, the World Bank promised an extra $150 million in aid to help Jordan with the cost of helping Syrian refugees, having already pledged $250 million in January, 2012, to help the country deal with its economic downturn.

Except that Jordan’s finances are already controlled by International Monetary Fund budget deficit targets, which means that the money coming in to support Syrian refugees, may be going out to pay the country’s debt to the IMF.

“Now, we don’t know what will happen between now and the end of the year. Definitely more burden and therefore more deficits on the budget. It will be very, very difficult,” Ensour said.

Jordan is planning, among other measures, to stop subsidizing electricity, which could affect its products’ ability to compete abroad (e.g. Israel).

Jordan is now trying to raise around $2 billion in bonds backed by the U.S. government, which Ensour told CNBC would be “very, very helpful. It will cut down expenses and it will for sure bring more interest in the interaction.”

Perhaps this would be a good time for Jordan to lay off the “peace process” next door in Israel and try to concentrate on the gaping deficits at home.


Yori Yanover

World Bank Distorting Truth, Blaming Palestinian Failures on Israel

Tuesday, March 12th, 2013

It’s that time of the year again, when the World Bank’s latest Economic Monitoring Report is being issued, and it includes a special segment on how things are in the Palestinian Authority.

The bank’s press release says that this year’s report stresses that “while the donor community’s efforts are directed towards short-term relief for Palestinian fiscal stress, it is important to recognize that the prolonged system of closures and restrictions is causing lasting damage to the competitiveness of the Palestinian economy.”

So, there’s a narrative in place, which is: Palestinians are poor, wealthy countries are sending in the funds, but Israel is limiting movement within the Palestinian Authority so badly, what with checking if their cars are carrying weapons, bombs, or suicide bombers, and what with the security wall that physically bars terrorists from sneaking into Israel – those things are ruining the Palestinian economy.

The problem with press releases of this kind is that one occasionally gets the feeling that their authors haven’t read their own text all the way through.

For instance, take a look at the following two paragraphs:

The economy is in danger of losing its capacity to compete in the global market, according to the report. It shows that the structure of the economy has deteriorated since the late 90’s as the value-added of the tradable sectors has declined, illustrated by the productivity of the agriculture sector having roughly halved and the manufacturing sector having largely stagnated.

The share of exports in the Palestinian economy has also been in steady decline since 1994, dropping to 7 percent in 2011, one of the lowest in the world. Moreover, Palestinian exports are concentrated in low value-added goods and services, the majority of which is exported to Israel.

So, starting in 1994, Palestinian poverty has been increasing steadily, until it really started revving down, so to speak, in more recent years.

And what magical event started in 1994? You guessed, the Paris Economic Protocol happened, which followed the 1993 Oslo Peace Accords, creating the Palestinian Authority and handing over the keys to the terrorist organization PLO, and its leader, the late Yassir Arafat.

Let’s consult Wikipedia for a somewhat different narrative than the one offered by the World Bank:

GDP per capita in the Palestinian territories rose by 7% per year from 1968-1980 (correlating with the “occupation”), but slowed during the 1980s. Between 1970 and 1991 life expectancy rose from 56 to 66 years, infant mortality per 1,000 fell from 95 to 42, the percentage of households with electricity rose from 30% to 85%, the percentage of households with safe water rose from 15% to 90%, the percentage of households with a refrigerator rose from 11% to 85%, and the percentage of households with a washing machine rose from 23% in 1980 to 61% in 1991.

You’re with me so far? After 19 years as a proud and free people under the loving rule of the Kingdom of Jordan, the Israeli takeover spelled a stunning prosperity for the occupation victims. But then the geniuses from Labor—Shimon Peres, Yossi Beilin, and Yitzhak Rabin—liberated the suffering Palestinian by imposing a gang of ruffians on them, complete with street executions and the exacting of protection money from every businessman and every productive person. The fruits of liberty ripened fast:

Economic conditions in the West Bank and Gaza, where economic activity was governed by the Paris Economic Protocol of April 1994 between Israel and the Palestinian Authority, deteriorated in the early 1990s. Real per capita GDP for the West Bank and Gaza Strip (WBGS) declined 36.1% between 1992 and 1996 owing to the combined effect of falling aggregate incomes and robust population growth. The downturn in economic activity was due to extensive corruption in the newly governing Palestinian Authority, and to Israeli closure policies in response to security incidents in Israel, which disrupted previously established labor and commodity market relationships.

This is years before the security wall, years before the complex system of checkposts, this is in a mere four years of Palestinian self rule.

“Continued financial support by the donor community, and increased reform efforts by the Palestinian Authority to manage the current fiscal challenges must remain a high priority,” said Mariam Sherman, World Bank Country Director for the West Bank and Gaza. “However, much bolder efforts to create the basis for a viable economy need to be made to prevent the continued deterioration that will have lasting and costly implications for economic competiveness and social cohesion.”

Not going to happen. You can’t run a competitive economy with armed thugs at the helm. For real prosperity, you must first kill all the gangsters. I say “kill” because throughout history we haven’t come up with a better, softer method of asking gangsters to leave.

Yori Yanover

Printed from: http://www.jewishpress.com/indepth/analysis/world-bank-distorting-truth-blaming-palestinian-failures-on-israel/2013/03/12/

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