• The cement monopoly, The Al-Bahr Company, belongs to Muhammad Rashid, Arafat’s chef de bureau and economic advisor.
  • Palestinian Authority chief Yasser Arafat maintains what people in the know in the territories call “A-Sunduk A-Thani,” Fund B, the Chairman’s second, secret budget in the Hahashmonaim branch of Bank Leumi, only two people, Arafat and Rashid, have the right to sign vis-a-vis this account. Since it was opened in 1994, Israel has transferred at least NIS 500 million – rebates for taxes on fuel paid to Israel for fuel bound for the autonomy – into the secret account in Tel Aviv, which an International Monetary Fund (IMF) internal document states “is not under the control or supervision of the Palestinian finance ministry.”

    The money was used to cover an inflated bureaucracy, fund a fall back plan to relocate Arafat and in the event of a coup, and cover other expenses which the contributing nations would never approve such expenses.”

    The Palestinian Authority put the West Bank under the jurisdiction of Jordanian law of the 1960s, and Gaza subject to Egyptian law of the same time period. The result is that in the territories of the Authority today there is no obligation to register a company, or to compete in tenders; there is no organized system for enforcing or collecting debts; there is no law governing mortgages for housing; no way of documenting joint entrepreneurial initiatives; the list goes on and on.

  • Under the economic agreement between the Authority and Israel, the Authority pledged not to interfere with contracts between Israeli suppliers and Palestinian customers that had been signed before the signing of the Paris protocol. Overnight, the Israeli energy company, Pedasco, found itself without contracts, without customers, and without the equipment it had leased to the gas stations. Instead Dor Energy sells the fuel to the Palestinian monopoly at a certain price, and the monopoly sells it to the station owners at a much higher price.
  • Every merchant and truck owner must pay the preventive security apparatus a tithe to Rajoub or Dahlan in order to proceed at the transit points. Sometimes, its done in a simpler fashion. An Israeli importer of cleaning products, who opened a branch in Gaza, was asked to pay $2,000, a “donation” to Force 17. A year ago, a rich Arab from East Jerusalem was asked to purchase 14 new jeeps, out of his own money, for Rajoub’s organization’s use.
  • Yiftah fuel transport company director Eli Mutai: “It’s not just a question of taxes and monopolies. It is Middle Eastern economics. Nothing works without bribery. Its first and foremost Jibril Rajoub, and then Dahlan. Business there runs smoothly, everyone gets a piece, the people in power receive percentages.
  • Husam Khader, PLC representative from Nablus: “They cut up the pie among themselves. The Palestinian leaders thought that our economy was some sort of inheritance due them and their children. Every honcho got himself a fat slice of the imports into the Authority. One got the fuel, another got the cigarettes, yet another the lottery, and his crony the flour. Gravel is a monopoly belonging directly to the security apparatuses, and they earn a fortune from it that finances their operations.”
  • The monopolies’ activities in several sectors have jacked up the prices to the consumer. Feed for sheep (khalta) sold under Israel’s administration at 120 dinars a ton. Today, the price is 300 dinars a ton. The price of a six-kilogram bag of flour has nearly tripled, from $15 to $40. Khadr does not object to the Authority’s collecting a commission on import taxes. “The problem is that the money does not get to the Authority, and the Authority has no idea of what is happening or what the monopolies’ profits are. Freedom of information. You make me laugh. I could yell in parliament and set up commissions of inquiry, but nothing would come of it. We don’t get the information from the Authority that we ask for. We don’t know how much the monopolies earn, or where the money goes. The senior economists and monopoly owners, especially Muhammad Rashid, are not willing to appear before the parliament; and when they do appear, they just leave unanswered questions behind them — and all this they cloak under the guise of state security, and it’s all classified.”

    According to American State Department reports, 27 monopolies are currently operating in the Authority’s territories. In addition, the Authority issues import licenses to only a few of the applicants. Thus, Nabil Shaath’s Egyptian company imports computers into the territories. Ramallah is the headquarters of Paltech, importers of consumer entertainment electronics (televisions, VCRs), owned by Yasser Abbas (the son of Abu Mazen) and Sami Ramlawi, one of the top officials of the Palestinian ministry of finance were supposedly doing the work for the Authority and selling it equipment, but in actuality, all the work was ours.”

  • Dr. Hisham Awartani: “When it was founded, the Palestinian Authority promised a market economy. In actuality, it is doing exactly the opposite, interfering constantly in private enterprise while its leaders stuff their pockets. We, the Palestinians, have a tendency to blame Israel for all our economic problems. That is a major mistake. We have to blame ourselves as well. First of all, I think we have to get rid of the Authority’s entire economic leadership: Nabil Shaath, Abu Ala, Muhammad Shtiya, Muhammad Rashid. We can’t possibly allow a man like Nabil Shaath, who has such extensive private business dealings in the Authority, to preside over its official economy in a manner that places him in a position of constant conflicts of interests. We cannot possibly take such an ineffectual economics minister [the reference is to Mahr al-Mitzri]. They have all failed. They must all go home.”

    It is possible to enter into an agreement with a senior official to agree on the import of a certain product into the territory of the Authority in amounts much greater than the needs of the local market. The Authority will get the full amount of the taxes from Israel, and kick some of it back to the importer. This way, the Authority earns money on merchandise that was never marketed in its territory, while the importer, who has gotten back some of the duties he has paid, can sell his goods at a very cheap price on the Israeli market. Yoni Shastovich, the importer of Gillette products in Israel estimates that approximately 10% of Gillette’s turnover in Israel, which was previously his alone, has been captured by merchandise that comes back from the territories to be sold in Israel.

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