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New Palestinian Government by Economic Austerity Policies

SHAFAQNA- The President of the West Bank-based Palestinian Authority, Mahmoud Abbas, has sworn in a new government, appointing a prime minister who is seen as a loyalist from his dominant Fatah party. He is Mohammed Shtayyeh, an economist and longtime advisor to Abbas.

“Israel is part of the financial war that has been declared upon us by the United States. The whole system is to try to push us to surrender and agree to an unacceptable peace proposal. This a financial blackmail, which we reject.” new Palestinian prime minister said.

The new Palestinian prime minister on Tuesday accused the United States of declaring “financial war” on his people and said an American peace plan purported to be in the works will be “born dead.”

In his first interview with the international media since taking office over the weekend, Mohammad Shtayyeh laid out plans to get through the financial crisis he has inherited and predicted that the international community, including U.S. allies in the Arab world, would join the Palestinians in rejecting President Donald Trump’s expected peace plan, according to apnews.

“There are no partners in Palestine for Trump. There are no Arab partners for Trump and there are no European partners for Trump,” Shtayyeh said during a wide-ranging hour-long interview.

Shtayyeh, a British-educated economist, takes office at a difficult time for the Palestinians, with his government, the Palestinian Authority, mired in a dire financial.

The Trump administration has slashed hundreds of millions of dollars of aid, including all of its support for the U.N. agency for Palestinian refugees.

Israel has also withheld tens of millions of dollars of tax transfers to punish the Palestinians for their “martyrs’ fund,” a program that provides stipends to the families of Palestinians imprisoned or killed as a result of fighting with Israel.

The Israelis say the fund rewards violence, while the Palestinians say the payments are a national duty to families affected by decades of violence. Furious about the withholding, the Palestinians have in turn refused to accept partial tax transfers from Israel.

Fighting the Israeli occupation through all legal means 

The President of the West Bank-based Palestinian Authority, Mahmoud Abbas, has sworn in a new government, appointing a prime minister who is seen as a loyalist from his dominant Fatah party. He is Mohammed Shtayyeh, an economist and longtime advisor to Abbas.

His appointment is opposed by Hamas, the Palestinian movement that governs the besieged Gaza Strip.

The government was formed after former Prime Minister Rami Hamdallah resigned in January. His resignation came following the failure of reconciliation talks between Fatah party and Hamas, Al Jazeera mentioned.

Addressing the cabinet Abbas re-iterated the Authority’s policy of not accepting the Israeli occupation and fighting it through all legal means such as the United Nations and peaceful popular resistance.

Without its key sources of revenue, the Palestinian Authority has begun paying only half salaries to tens of thousands of civil servants, reduced services and increased borrowing. In a new report being released Wednesday, the World Bank said the Palestinian deficit will grow from $400 million last year to over $1 billion this year.

Reviewing ways to strengthen the local economy

Prime Minister Mohammed Shtayyeh, a Fatah Central Committee member and a leader in the first intifada (1987-1993), appears to be setting his sights on economic austerity and policies of self-reliance, versions of which Palestinians adopted during the first uprising. Shtayyeh told his Cabinet on April 15 at their inaugural meeting that the Palestinians must adopt austerity measures to deal with the difficult economic situation and to avoid having to raise taxes.

Shtayyeh is said to be reviewing ways to strengthen the local economy while pursuing an economic policy of steadfastness and resistance. Al-Monitor has learned that to this end and to separate the Palestinian economy from Israel, the government will introduce a plan to phase out use of the shekel, replacing it with other currencies, including the Jordanian dinar, the US dollar or the euro, al-monitor told.

It is also predicted that Shtayyeh will try to reestablish relations with Israel after a new government is formed.

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