The costs of life and the dream of the future

Written by: Dr. Saeed Sabry

The cost of life is overwhelming and harsh for Palestinian citizens. Wherever they are, public or private sector employees, they have been overwhelmed by the storm of rising prices on their monthly income. So while that male or female citizen dreamed of a monthly salary to secure a decent life for him, he was attacked by the exorbitant costs of life. So where is the solution? ‏

Was the price hike limited to foodstuffs, and does the "food basket" subsidized by the government constitute economic stability for the Palestinian citizen? Today, the entire Palestinian national economy is at risk, not just the food basket. ‏

The transformation in the Arab world has reached a stage that requires us to start looking to the future. It is indisputable that the voices calling for our removal from the tunnel of turmoil, instability and economic stagnation in which they are immersed are increasing.

The price hikes of commodities and raw materials are continuing rapidly and non-stop. These hikes were not a result of the moment, as it began when the Corona pandemic ravaged the world to create a wave of imbalances in the levels of demand and aggregate supply and in the ability of supply chains to secure goods and goods, especially the strategic ones, so that war would come. Russian-Ukrainian to further complicate the scene, with food and feed prices expected to rise by 8 to 20 percent, according to the Food and Agriculture Organization (FAO), causing the global food crisis to escalate.

It is quite clear that the rise in prices has included all economic sectors, and important sectors of the Palestinian economy have been negatively affected, such as the construction and agricultural sectors. With him, they will not even be able to buy bread, and from here we see that harming the contracting sector is harming the private sector in general and will negatively affect consumers and the weak and marginalized classes.

In May 2022, the International Monetary Fund and the World Bank published reports with their assessment of the current Palestinian economy, emphasizing the dire financial situation of the Palestinian Authority. Revenues fell sharply from NIS 16.6 billion in 2016 to NIS 13.6 billion in 2020, and only partially recovered in 2021 to NIS 14.9 billion. The significant decline over time has been in non-taxable revenues (mainly domestic fees and costs) and on external support from donor countries and organizations.

Foreign aid funds decreased by 70 percent, from $1 billion in 2018 to $250 million in 2021. Thus, in 2021, expenditures exceeded revenues by 15 percent and the fiscal deficit reached 5.7 percent of GDP.

There are great challenges facing the Palestinian economy today. The popular movements that were ignited by economic and social factors that prevailed for a long time, will in turn produce a new social and economic environment. However, as far as these factors were clear and unanimous to many, the new environment seemed murky and full of challenges. Nevertheless, the prospects, in my opinion, are still positive, but they will not be achieved by themselves

The responsibility of maintaining food prices within the purchasing power of the majority of consumers falls within the framework of government policies. The government must work to develop modern policies that are commensurate with local and regional changes, in order to guarantee freedom of the market, in a way that limits the various forms of monopoly. As well as providing support to the beneficiaries according to a mechanism that guarantees its access to them only. And work clearly to create modern mechanisms that guarantee transparency and control of prices for foodstuffs, construction materials, and others offered in the market, and work to stabilize them. ‏

We are witnessing successive rises in the prices of oil and its derivatives, and in the face of all these steady increases that "eat away" the income of citizens, the Palestinian citizen stands bewildered, in the shadow of his inability to secure the priority requirements of life, and the government stands unable to intervene by reducing people's suffering and preserving the purchasing power of their incomes. Even if it was at the expense of the treasury

I turn to the crisis cell that was formed by the Palestinian government with a set of questions that I hope I and the citizen will find practical and realistic answers: -

- And the most important and urgent question, how will the government deal with all the financial challenges that the treasury of power suffers in light of the severe shortage of revenues from Western and Arab countries and the large financial deficit, which is estimated to increase further with the increase in the prices of government-subsidised commodities?

- In light of the international failure to pay aid, can the Ministry of Finance, represented by the Palestinian government, increase the salaries of employees with this worsening deficit?

- Do we have the possibility or item in the budget that we can increase the allocations to support the main commodities? Is there a ceiling for the authority to bear the financial burden? ‏

- Is there any direction among the government's strategies to grant Palestinian citizens financial support that guarantees covering the high costs of it? ‏

I believe that the Palestinian government does not have many options to curb the price hike, but it is clear that we are prisoners of circumstances beyond our control, but they were imposed on us and must be dealt with under the shadow of general data. ‏

Here are some suggestions that I hope the Palestinian government and the "economic crisis cell" will study and adopt:

In order to deal realistically with this issue, we must work to involve the private sector in decisions and consultations. We must all realize that the crisis that struck our economy is a global crisis, not a Palestinian one, and not a fabricated one. We must also realize together that we are in one trench and that it is expected to continue for a long time and escalate. And it is repeatable, and therefore we must have a clear vision based on looking at the inflation issue temporarily and strategically, and we look at things on three levels, the short, medium and long term. ‏

First: - the short term. In my opinion, the Palestinian government should work to encourage the policy of dumping the market with products and accompany it by setting a period of time to exempt these consumer products from customs.

Second: - As for the medium term, we must focus on reducing the costs of operating expenses for the production sectors, including factories and agriculture, by reducing the cost of customs on raw materials, as well as the cost of energy.
Third: - As for the long term, work must be done to build a national stock of basic materials inputs, including commodities and foodstuffs. ‏

Fourth: Working on activating market supervision on consumer products, and working on launching a website that addresses the consumer by setting price ceilings. ‏

In conclusion, I wish the Palestinian government to work and accelerate achievement, establish a protective and barrier framework that protects the foggy future, and create societal security, which is the basis for economic security. ‏