Palestinian Authority’s declining influence portends more trouble for Gaza

This is compounded by US financial cuts and internal challenges of corruption, limited autonomy, and a shattered political structure.

Israelis block the entrance to UNRWA, the UN agency providing aid in the Gaza Strip, during a protest in Jerusalem on March 20. | Photo Credit: Ohad Zwigenberg/AP

On March 14, 2024, the Palestinian Authority (PA) appointed the economist Mohammad Mustafa as the next Prime Minister. This move came after former Prime Minister Mohammad Shtayyeh resigned in February, citing the deteriorating circumstances in Jerusalem, Gaza, and the West Bank. Since October 7, 2023, over 32,000 Palestinians in Gaza and over 483 in the West Bank have died in the hostilities with Israel.

On March 28, Mahmoud Abbas, the 88-year-old President of the PA who has ruled for 20 years, issued a presidential decree appointing a new temporary Cabinet. Incidentally, the PA’s presidential election was due to be held on July 31, 2021, but Abbas postponed it indefinitely, citing Israel’s refusal to permit the inclusion of East Jerusalem.

Hamas denounced the establishment of the new administration, calling it invalid. Rather, it is pushing for the formation of a power-sharing administration involving all Palestinian factions, including Abbas’ party, Fatah, ahead of national elections. Meanwhile, Fatah said on April 3 that the Hamas leadership had become “subservient” to Iran, which was “interfering in Arab issues”.

Israel, too, rejected the new Cabinet, saying it will maintain open-ended security control over Gaza after the conflict ends.

There were rumours that Mustafa, an indisputable face of the Palestinian economy and a long-time confidant of Palestinian leader Abbas, was the front-runner to become Prime Minister after the incumbent, Salam Fayyad, a Jordanian-Palestinian who was a prominent reformist, stepped down in 2013. However, Rami Hamdallah was appointed Prime Minister at that time, and he remained in the post until 2019.

Mustafa has been the eyes and ears of the ageing Abbas since Hamas seized control of the Gaza Strip in 2007. He assisted Abbas in merging hundreds of organisations under the PA, a task they undertook so that these institutions did not come under Hamas’ control, which would have brought on international penalties as well. One such organisation was the Palestine Investment Fund (PIF), a sovereign wealth fund with approximately $1 billion in assets that was established in 2003 in response to strong Western pressure on the PA to implement further economic reforms.

Abbas appointed Mustafa as the general manager of the PIF in 2007, and within years made him CEO and chairman of the board of directors. Abbas added the Ministry of the National Economy to Mustafa’s portfolio in 2014.

Tough task ahead

Mustafa’s immediate task will be tackling a funds crunch following the US decision to “withhold contributions” to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) until 2025. The agency forms the backbone of the humanitarian response in Gaza. The US was UNRWA’s largest donor, contributing $300–400 million yearly. This loss, combined with those from other large donors, means $450 million less for UNRWA annually. This is a serious setback for the organisation at a critical juncture.

Israeli Foreign Minister Israel Katz was quick to respond: “The historic ban on US funding to UNRWA... demonstrates what we knew all along: UNRWA is part of the problem and cannot be part of the solution.” By late January itself the US had cut off financing to UNRWA after Israel informed the organisation that 12 of its 30,000 staff were suspected of being engaged in the Hamas bombings of October 7. However, on March 4, in his first speech to the UN General Assembly since the incident, the agency’s head, Philippe Lazzarini, stated that Tel Aviv had never offered concrete proof of its employees’ connections to Hamas and claimed that “there is a political decision here to eliminate UNRWA”.

However, there is a ray of hope. Some nations within the EU, along with Canada, Sweden, and Australia, that had stopped supporting UNRWA are now looking to start up again because they are not convinced about the proof Israel has provided. Furthermore, a number of nations, Norway and Spain among them, have increased their assistance to help mitigate the effects of the cuts.

The US and the PA are also on the verge of reaching an agreement to end the contentious “martyr payments” programme for those who commit violent crimes against Israel. The PA provides financial assistance in the form of salary and pensions to Palestinians who have attacked Israelis and been killed, injured, or imprisoned. Israel calls this “pay to slay” and claims that it encourages “terrorism”. Many Palestinians consider this to be essential to support those who are against the Israeli occupation.

Martyrs Fund

Meanwhile, the Jerusalem-based Palestine Media Watch declared that compensation would be given to the families of 23,210 “martyrs” and 3,550 Palestinians imprisoned in Israel. According to sources, among the martyrs named in Al-Hayat Al-Jadida, the official PA daily newspaper, were those killed in the Israeli attack on the Al-Aqsa Martyrs Hospital in Gaza. The number of prisoners has increased recently, and this has resulted in an additional expense for the PA of $1,331,000 a month (4,970,000 shekels), thereby adding $16 million to last year’s expenditure.

The Martyrs Fund, which provides monthly stipends to Palestinians doing time in Israeli prisons and their families or to the families of those slain during confrontations against Israelis, is required by Palestinian legislation to receive 7 per cent of the organisation’s annual budget. The amount that each prisoner receives each month from Ramallah is determined by various factors, such as the number of Israelis killed, the length of time they have been incarcerated, the size of their family, and so on. However, this issue became contentious after a US national, Taylor Force, 28, was killed by a Palestinian during his March 2016 rampage through Jaffa when the then US Vice President, Joe Biden, was meeting former Israeli President Shimon Peres in Tel Aviv. As a result, the US Congress under the Donald Trump administration enacted the Taylor Force Act, which withheld money from the PA until it stopped paying stipends to families of its martyrs and Palestinians in Israeli prisons.

The PA has faced criticism over its new Cabinet. “President Mahmoud Abbas tries to legitimise his rein by shuffling ministers but that won’t make any difference so long as he clings to power and represses dissent. By reshuffling his Cabinet yet again, Mahmoud Abbas, ‘widely unpopular among Palestinians’, continues to reject international demands to make the authority more technocratic and less corrupt,” said Kenneth Roth, former executive director at Human Rights Watch.

Mohammad Mustafa (right), newly appointed Palestinian Prime Minister, with President Mahmoud Abbas at the swearing-in ceremony of the new Cabinet, in Ramallah, West Bank, on March 31. | Photo Credit: Majdi Mohammed/AP

Soon after the announcement of the new Cabinet, armed groups affiliated with Islamic Jihad and Hamas opened fire on the PA’s headquarters in Tulkarm, said Ihab Hassan, a Palestinian human rights activist. A civil war between the PA and the Palestinian Islamic Jihad in Tulkarm and the rest of the West Bank is slowly erupting, especially after the PA’s failed attempt to abduct a leader of the Saraya Al-Quds’ Tulkarm Brigade on March 30.

Ali Abunimah, director of The Electronic Intifada website, stated recently: “The genocidal Zionist enemy is now floating plans to use ‘humanitarian’ efforts to sneak the ‘Palestinian Authority’ traitor regime back into Gaza to rule the rubble on behalf of the Zionists and Americans.”

Raja Khalidi, a development economist in Ramallah, called the PA too dysfunctional to be revived. He wrote: “Instead of preparing the PA to govern in Gaza, the Palestinian people should establish a new political entity: a provisional government of the state of Palestine.”

Highlights

• Mohammad Mustafa has been appointed as the new Prime Minister of the Palestinian Authority following the resignation of Mohammad Shtayyeh, amid ongoing hostilities with Israel and internal political tensions.
• The appointment comes amidst denouncements from Hamas and criticism over the legitimacy and effectiveness of the PA, with calls for power-sharing arrangements and accusations of corruption and repression.
• Mustafa faces significant challenges, including a funds crunch due to the US withholding of contributions to UNRWA, opposition from Israel, and internal strife within Palestinian territories, raising doubts about the prospects for meaningful reform or peace agreements in the near future.

Prime Minister Mustafa does not have access to Hamas or Fatah for negotiation and reconciliation, so it is unclear how the new Cabinet will be able to prove its legitimacy. Mistrust of the PA has also increased as a result of a poorly drafted Social Security Bill, the break-up of the government, and widespread nepotism. Notably, the PA, which employs 45 per cent of its labour force for security-related services, has essentially become a subcontractor tasked with defending the occupier’s interests via security synchronisation. Consequently, it finds itself entangled between the non-compromising paths of national emancipation and state formation.

The case of Palestinian anti-corruption campaigner Nizar Banat, who was tortured to death by the PA’s security forces in June 2021, serves as an illustration of the political and procedural corruption within the PA. For Palestinians, it was a significant turning point, exposing the authority’s cooperation with the Israeli occupation and the increasingly harsh measures that Abbas is prepared to use in order to quell opposition against him. Also, there is a growing awareness among Palestinians that Abbas’ authority is coming to an end. That brings with it the fear of what next after Abbas’ exit.

The stability and survival of the new government would probably depend on the acceptance and backing of a number of Arab governments and the international community. This essentially implies that Palestinian decision-making will remain vulnerable to outside demands, decrees, and political extortion, making it impossible to escape the existing deadlock and advance towards the aspirational national objectives shared by all.

“The final say in making or breaking the new government, as always, will be in Tel Aviv. The Israeli categorisation of the Palestinian government as ‘cooperative’ or ‘antagonistic’ will entirely be based on this government’s full or partial loyalty to the security needs of the Jewish state and the outsourcing of the occupation,” stated Emad Moussa, a researcher and writer who specialises in the politics and political psychology of Palestine/Israel.

But with a PA beset by corruption, little autonomy, and a shattered political structure, Mustafa has a difficult task ahead of him. It is unclear whether he will be able to create “technocratic governance” and bring about significant reforms relating to the “Palestinian Question”. The PA will push for a vote in April on full UN membership, but without resolving the fundamental problems, the protracted Israeli-Palestinian conflict will cast a long shadow, and a permanent peace agreement appears improbable. Only time will tell whether Mustafa was merely Abbas’ scapegoat or a true reformer.

Shubhda Chaudhary is Editor at Centre for India West Asia Dialogue, a think tank based in New Delhi. She specialises in West Asian politics and has field experience in the West Bank, Egypt, Oman, and Jordan.