Israel And PA Share Domestic Headaches

Ramallah, West Bank —With less than two months to go before battling for votes on a United Nations resolution on statehood, Palestinian and Israeli officials share a common domestic woe: both have been weakened politically by a homegrown economic uproar.

Prime Minister Benjamin Netanyahu has been grappling for more than two weeks with an escalating revolt of the middle class over the cost of living. Starting with a tent city set up by Tel Aviv young professionals frustrated over high rents, the grass-roots revolt has widened to include students, doctors and teachers.

This past weekend, an estimated 100,000 protesters in at least 10 cities took the streets to demand “social justice.” The largest anti-government demonstrations in recent memory have put Netanyahu on the defensive, hurt his public opinion ratings and prompted speculation that it may even influence his moves on foreign policy.

While some on the right fear he might embark on a surprise diplomatic gambit to reclaim the Israeli center, others believe that the uproar will leave the prime minister more dependent on right-wing allies and less flexible on the peace front.

“He’ll have more trouble making his case while he is bogged down with these protests,” said Gershon Baskin, the director of the Israel Palestine Center for Research and Information. “Whatever argument he wants to make about the Palestinians will be sidelined by the intensity of these protests.”

In the West Bank, meanwhile, the Palestinian Authority has been busy with its own domestic headaches. For about a month, Palestinian civil servants were without their full salaries because of a budgetary cash crunch. Palestinian Prime Minister Salam Fayyad blamed the crisis on the failure of Arab donor countries to follow through on some $300 million of pledged budgetary support to the PA.

But the salary crunch has injured the already shaky credibility of the Palestinian government while highlighting its dependence on the handouts — a stark contrast to expectations for statehood in September.

It has also stoked resentment toward Fayyad, who, despite winning international praise for government reform, is criticized on the streets of the West Bank as a lackey of the U.S. and the West.

“These people have gotten used to begging, so they will beg for more,” said Munir Abdel Rahman, a 50-year old shopkeeper.

“This is a strategy to make people suffer and think, ‘How will we get bread on the table’ and forget about the Palestinian cause.”

A leading Palestinian civil service union had planned to lead a strike of public servants to protest the withholding of salaries, but it was averted by a decision of the PA to make payments on Tuesday morning — the second day of the Muslim holy month of Ramadan.

The threatened strike reflects ongoing tension within the ruling party of Palestinian President Mahmoud Abbas toward Fayyad, an independent who is seen as a potential rival for the votes of secular Palestinian moderates.

Azzam Abu Baker, a Fatah activist loyal to the president, suggested that Fayyad was bowing to pressure from the U.S. Though the shortfall is actually attributed to Arab donors, it’s a reminder that leaders in the U.S. Congress have threatened to cut off hundreds of millions of dollars in aid to the PA if it pursues UN statehood recognition. Israel could also stop transferring money collected for the Palestinians in protest.

Fayyad may be using the crisis to flex his muscles.

“It’s a form of blackmail,” Abu Baker said. “He is basically telling people, ‘Without me you will not eat.’”

Still, Abbas has supported Fayyad because of the prime minister’s international reputation as a competent and trustworthy economist and reformer. In the stalled talks for Palestinian unity, Abbas has resisted demands by Hamas to install a different prime minister.

Kadoura Fares, a former Palestinian cabinet minister, said Western aid has become a kind of bribe to tamp down Palestinian frustration over the lack of progress on statehood.

“We get money in return for the continuation of a process without peace. The peace faltered a long time ago, and the process remains,” he said.

Back in Israel, Netanyahu’s supporters expressed hope that the middle-class protests would begin to ebb and lose steam.

But on Tuesday, a Ynet poll suggested that Netanyahu could face pressure among his own backers: some 85 percent of Likud voters support the tent city campaign that has targeted the Israeli prime minister for criticism.

“It’s true the government is weaker,” said Gadi Wolsfeld, a Hebrew University professor and the author of the recent book “Making Sense of Media and Politics” (Routledge). “It’s heightened concern about the possibility of his electoral success. Whenever the elections are on social issues, the Likud does poorly. Whenever they are on war and peace they do much better.”

Netanyahu’s domestic woes have spurred speculation among politicians that he might seek an unexpected political compromise with the Palestinians to restart negotiations, deflecting momentum away from the protests and gaining more supporters in the center of the political map.

“It could be that Netanyahu is looking for a grand gesture, outside of the protest,” said Wolsfeld.

“If he pulls a rabbit out of the hat on the political front, then it would make it more difficult for the protesters to get their agenda dealt with by the media or the Knesset. He [Netanyahu] could end up killing two birds with one stone.”