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Spotlight: Non-payment of PA employees' salaries causes economic hardship in Gaza Strip
From:Xinhua  |  2020-06-17 16:47

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by Sanaa Kamal

GAZA, June 17 (Xinhua) -- The Palestinian people in the blockaded Gaza Strip are facing a severe financial crisis due to the non-payment of the salaries of the Palestinian Authority (PA) employees in the coastal enclave.

On May 19, Palestinian President Mahmoud Abbas announced the abolition of all agreements and understandings reached with both Israel and the United States, including economic and security cooperation.

Abbas's decision was made in response to Israeli Prime Minister Benjamin Netanyahu's declaration that his government will annex the Jordan Valley and impose the Israeli sovereignty on several settlements in the West Bank on July 1.

The PA also announced that it refused to receive the tax revenue dues that Israel collects from the Palestinian trade on behalf of the PA under Oslo interim peace accords signed between the two sides in 1993.

The tax revenue dues worth around 150 million U.S. dollars, which represents 60 percent of the Palestinian government's total revenues.

However, the PA employees' salaries are considered the most important source of economic activity in the Gaza Strip, Omar Shaban, an economist from the Gaza city, told Xinhua.

The non-payment of employees' salaries will has severe consequences in the blockaded coastal enclave, which has been already suffering from the deteriorations since 2007, added Shaban.

He explained that the PA's inability to pay wages to its employees in the coastal enclave, most of whom do not work due to the internal division, will create a deep economic crisis in addition to the accumulated crises in the Gaza Strip for 14 years.

Nevertheless, Hani Abu Ouda from the northern Gaza Strip town of Beit Hanoun is one of the PA employees, who are waiting to get their monthly salaries.

The 37-year-old father of six told Xinhua that the delay in paying salaries has negatively affected his life, because he depends mainly on his salary to provide the basic needs for his family.

"Neither PA nor Hamas will be able to prevent Israel from implementing its annexation plan as long as they keep the division in place," said the man.

Meanwhile, the local markets in the coastal enclave seemed empty from customers. As a result, the commercial movement in the markets has been very limited, while the merchants are complaining of weak purchasing power, as well as the accumulation of goods in their stores.

Emad al-Jammali, a 51-year-old clothing merchant from the Gaza city, complained of the weak purchasing because no customers were buying goods due to the non-payment of employees' salaries.

The father of five told Xinhua that the current financial crisis would significantly affect importing goods from abroad, as traders will reduce the quantities of the products they import in half or more to avoid new losses.

"The salaries crisis has negatively affected 50 percent of the purchasing power in the local markets," said the man.

He added "if these salaries are cut, the situation will deteriorate further," explaining that "the traders have to reduce the import of goods from abroad to overcome the new crisis."