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Al-Ahram Weekly 30 Sep. - 6 Oct. 1999 Issue No. 449 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 30 Sep. - 6 Oct. 1999 Issue No. 449
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Focus Features Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Something's missing here
By Abdel-Jawad Saleh *On 12 August, the Palestinian Legislative Council (PLC) approved the Palestinian Authority's 1999 "budget". Among the 38 members who voted for the budget (18 voted against) were most of the 24 PLC members who became ministers in the incumbent "cabinet". The hasty vote took only about three hours of discussion. The ruling Fatah majority in the PLC guaranteed a "yes" vote. Fatah members in the PLC were invited to meet President Arafat the night before the discussion of the "budget", and were urged to vote for it.
The Budget Law was enacted by the PLC, endorsed by the president and was duly published in the official gazette. It stipulates that the finance minister of the PA should present the national yearly budget to the PLC in October of every year. The 10-month delay of the budget debate, which has become the norm, is intended to prevent any understanding of the grey areas of the budget.
Like previous budgets, the 1999 budget fails to lay even the most rudimentary bases for financial management. No philosophy or terms of reference underpin it. Indeed, it reflects the absence of any government strategy. The lack of clear goals, targets or objectives can only serve to alienate society at large from the government's projects.
The absence of any economic plan justifying government priorities is one reason for the PA's loss of credibility. Rather than a budget, what has been presented is an incomplete financial statement. It does not provide economic analysts with a detailed list of services, financial divisions, or geographically based allocations. It does not allocate capital investment to plans or projects that have been discussed or even announced. It flouts such basic requirements as transparency. In the absence of any clear itemisation, the budget helps to diffuse corruption, not capital.
Like Israeli budgets for the Occupied Territories during the past 32 years, the PA budget for 1999 is simply a case study in the continued policy of de-development and de-institutionalisation. It reflects, mainly, a lack of responsibility toward the Palestinian economy, an economy ridden by unemployment and poverty. The most recent official PA report shows that a further 38 per cent of families in Gaza have sunk below the poverty line. The West Bank is faring no better.
Another point highlighting the irresponsibility of the budget's architects is the phenomenal increase of the public service payroll. Current expenditure is 28 per cent higher than in 1997. The increase, which brings government salaries up to 62 per cent of total expenditure, is a result of haphazard political appointments. These are not compatible with any logical criteria; nor do they meet the material needs of the different state institutions. Still, the list of suggested posts presented by the Finance Ministry shows numbers of new jobs, rather than the jobs needed. The Civil Service Law stipulates that posts be filled in accordance with the structural plan of each government institution. This policy has crippled any attempt to allocate financial or human resources for development.
Such policies are jeopardising the future of Palestinian society. They can lead only to financial instability, and burden future generations with pension allocations.
During the prolonged delay between the presentation of the budget and its approval, none of the PA's financial units received even one of 12 disbursements due. This is because the Finance Ministry is using such delays as a tool for dealing with deficits. Underprivileged recipients of medical care are the main victims of such a policy, for they are refused even basic health care in these circumstances. Emergency operations have been postponed or cancelled because even surgical thread is lacking. Mundane illnesses are now life-threatening. The public health sector is being actively de-institutionalised. Hundreds of thousands of medical insurance holders, who have put millions of dollars in the public insurance scheme, are not being offered any services in return. Similar irresponsible management of the meagre resources available is also threatening education. Instead of plans for the future, the educational system -- one of the main victims of the occupation -- is left without a minister.
Meanwhile, security agencies are granted 36 per cent of total expenditures in the official budget. The supervisory committee of the PLC discovered that some of the security agencies receive millions of shekels behind the treasury's back. The minister of finance acknowledged this practice. In contrast, allocations for the ministries of education, health, social welfare and labour amount to 31 per cent of total expenditures -- in other words, the four major ministries receive five per cent less than do the security agencies.
A public budget is drawn up on the basis of a unified and comprehensive fund, where all revenues are pooled and from which expenditures on services for citizens are paid. In the PA budget, even this primary requisite of normal financial management has been violated arbitrarily.
Different sources, such as the government's monopolies and quasi-monopolies, generate revenue which is not delivered to the treasury but controlled by the president's office. These missing moneys come to a grand total of $316 million as estimated by the International Monetary Fund. Furthermore, "the president's office itself has expended six to 12 per cent of the general budget in successive years, without audit, in addition to the unseen revenues of which it also disposes", as the Independent Task Force Report (ITFR) revealed.
During the discussion of the 1999 budget, one of the members of the PLC related that President Arafat had ordered the Finance Ministry to pay his office $200 million to cover the losses on investments. Foreign press sources also reported that the international investments of the president's office have suffered huge losses. Among the major victims of this clandestine policy was the Pensions Fund. This writer has seen a sophisticated flower plantation belonging to the president's office, dry and desolate. Another few million dollars in taxpayers' money have thus been wasted.
Could these developments be related in any way to the peace process or the final status negotiations? In other words, are the architects of the 1999 budget aware of the requirements of peace? Have they developed plans to confront the feverish usurpation of land and construction of new settlements to create new facts on the ground? Are they preparing the infrastructure, planning new cities to absorb the returnees? Or will this question, like so many others, be postponed ad infinitum under the Israeli conceptual framework?
* The writer is a member of the Palestinian Legislative Council.
