For Palestinians, Uprising Has Cost Lives--and a Living

GAZA CITY â€”  Five months on, the Palestinian uprising and the stern Israeli response are having a devastating impact on Palestinian society, its economy and the ability of President Yasser Arafat’s government to govern.

The economy is in dire straits. Rivalries among political and paramilitary factions have intensified. The credibility and effectiveness of Arafat’s Palestinian Authority and its many institutions are crumbling; its leadership increasingly is supplanted by more radical bodies.

Even relief checks of $125 apiece to families of those killed in the uprising are bouncing.

Much of this is by Israel’s design, as well as Arafat’s.

Israel sealed off most of the Gaza Strip and West Bank soon after massive demonstrations erupted in late September, followed by daily shootings and clashes. The goal, Israeli officials say, is to punish the Palestinians, pressure them to halt their role in the bloodshed and guard against terrorist attacks.

The Palestinian economy, mismanaged, riddled with corruption and small to begin with, has lost about $1 billion--roughly one-fifth of its size--since the closures began blocking the transit of people and some commodities, international officials say. Israel is also withholding at least $54 million in tax revenue it collected on the Palestinians’ behalf.

With most Palestinian workers barred from Israel, unemployment has soared to the point where half the population has lost its primary source of income, according to the International Monetary Fund. The Palestinian Authority had to borrow money from commercial banks to pay January salaries for its 115,000 civil servants and security force personnel--and it faces the same crisis in a couple of weeks.

“We are going down the drain by the day,� Palestinian Economy and Trade Minister Maher Masri said in an interview. On his polished wood desk, a red phone is silent; service has been cut for lack of payment.

So has service to phone lines in most of the Palestinian government’s ministries. Building rents haven’t been paid, either. Offices and businesses are operating at a third of their capacity at best. With their pay late, some employees cannot afford bus fare to work, not that there is much work to do.

The United Nations took the unusual step of warning that Palestinian society could be headed for “chaos and anarchy� if conditions do not improve soon.

Secretary of State Colin L. Powell took up the cause in a visit to the region last weekend, urging Israel to end what he called the “siege� on Palestinian territories. The measure, he said, harms Israeli-Palestinian relations while doing little to improve security.

Israeli officials say the Palestinians have brought the suffering on themselves. The tax money would be released and workers allowed to work if the Palestinian leadership would simply put a stop to the violence, they say.

The strain is showing. Occasional battles between rival Palestinian forces have erupted in recent weeks. When security forces recently tried to arrest a member of the radical Islamic group Hamas at the Jabaliya refugee camp in Gaza, a communal brouhaha ended in the man’s freedom.

“Now the violence in turning inward,� said Eyad Sarraj, a human rights advocate who runs a mental health clinic in Gaza City.

Although Palestinians blame Israel for their plight, they are also increasingly critical of their own leaders, who are widely regarded as corrupt and useless. An alliance of politicians, academics and others banded together in January to present a scathing petition to Arafat, accusing him of stifling democracy, flouting the rule of law and failing to show leadership. Another group has gone so far as to demand a new government.

And as the Palestinian Authority is seen as increasingly irrelevant, militant elements of Arafat’s Fatah movement are in the ascendancy, with local chieftains ever more in charge of dispersed turfs and issuing warnings to Arafat that he’d best clean up corruption.

January’s daytime assassination in Gaza City of the head of Palestinian television carried the same message.

Arafat’s response to the deepening crisis has been to remain strangely absent. Based in Gaza, he has traveled to the West Bank just three times since the uprising began--to Bethlehem for the Christmas celebrations under the Western and Eastern Orthodox church calendars, and then Saturday to Ramallah. Similarly, other top government officials are less visible, while the Palestinian Legislature has been unable to meet because Israeli travel restrictions prevent lawmakers from reaching their headquarters.

In this vacuum, Arafat is deliberately allowing a sort of orchestrated chaos to sweep the lands under his nominal control, Palestinian and Israeli analysts say. He has become a willing prisoner to the militias, allowing the street to lead the leader.

“Basically, Arafat is abdicating his responsibility,� said Khalil Shikaki, a prominent Palestinian political analyst. “He does not have the motivation to reassert control, but he is also concerned that if he did try, it may trigger a reaction in the street.�

Palestinians have been laying the foundation for an independent state and economy since the signing of the Oslo peace accords in 1993. Now much of the project is in ruins.

Offices of the Ministry of Local Government in Ramallah are literally in ruins. Employees must descend a rusted metal staircase into the back entrances of the building. Its front faces Israeli positions and has been thoroughly pummeled by machine-gun fire in retaliation for shooting from the vicinity by Palestinians.

It is frigid inside, since there is no glass in the windows to keep out the winter drafts. Huge holes gape in the exterior walls of upper-floor offices. Hundreds of bullets have chipped the inner walls, and light fixtures and furniture are askew.

“We haven’t got the money to make repairs, and I’m not sure we should make repairs, because afterward we could get shelled again,� said a worker who guided two reporters through the debris.

Many of the engineers who used to work in the ministry cannot cross Israeli roadblocks to reach their jobs. Water trucks cannot reach scores of isolated villages that have no running water, and projects that would have brought electricity to 150 towns and villages by next year have been halted by the closures, said Ahmad Ghnaim, a ministry official.

Ghnaim is both bureaucrat and militia activist. He said the purpose of Israel’s “economic war� against the Palestinians is to make them bow to pressure. It won’t work, he said.

“Our roots are in the revolution, not just in the [Palestinian Authority], and the revolution is more important,� Ghnaim said.

Within the Israeli leadership, there also is growing concern that squeezing the Palestinians may only further radicalize them. But Prime Minister-elect Ariel Sharon says he does not plan to lift sanctions until the violence stops. Arafat, meanwhile, is unlikely to attempt to end the violence without concrete gains.

Arab nations last year pledged $1 billion in aid to the Palestinians to help them cope with the fallout of the intifada, or uprising. Distrustful of the Arafat regime, however, they have insisted that the money go directly to individuals. Consequently, only a small amount has been disbursed. An additional $150 million from Arab and European countries has arrived separately.

With Israel blocking or slowing the flow of goods to and from Gaza and the West Bank, the Palestinian Authority is losing half its monthly income, international economists say. Domestic tax collection is down 75% in Gaza and 60% in the West Bank, according to the Palestinian Finance Ministry.

As income declines, expenses for security, medical care and damage soar.

“We cut all our expenses except payrolls. And even the payroll we could not manage to pay from our own resources,� said Atef Alawneh, deputy finance minister. “If I tried to order a computer today, no one would give it to me.�

The ripple effect spread rapidly through an economy so dependent on Israel. With little money in their pockets, Palestinians have nothing to spend. Stores and businesses do little trade. They in turn can’t pay their loans. Banks get nervous, investors get out.

“I have to buy everything on credit,� said Muntasir Jihad, a 25-year-old Gazan policeman with a wife, two young children and 12 other relatives to support. “This is the worst economic situation I’ve ever gone through.�

The breaking point for Jihad came when his January salary of about $325 was two weeks late. His family has had to put off plans to build a small house. He expects things to get much worse.

If the Palestinian Authority collapses and can no longer pay salaries, Alawneh of the Finance Ministry cautioned, the repercussions will go far beyond Gaza and the West Bank.

“In one day’s time, 1 million Palestinians suddenly do not have income. How long can they go on?� he asked. “If 150,000 can’t work, who can guarantee there won’t be 1,000 or 2,000 or 3,000 suicide bombers?�