RAMALLAH, January 17, 2011 (WAFA) – Prime Minister Salam Fayyad said on Sunday that his government has the economy on its priority list.
He said in a meeting with Palestinian reporters and newspaper columnists that in spite of a rise in prices of consumer goods, there was also an increase in salaries of about 150,000 public employees.
Fayyad said his government is concerned about living conditions and income of Palestinians.
“Living conditions in all their aspects are a constant concern of the government,” he said.
Fayyad said there were 106,000 unemployed Palestinians in the West Bank and another 112,000 in the Gaza Strip. He said the cumulative rise in cost of living in the last 10 years was over 40% and cumulative rise in income was 55%.
“This indicates an increase in the basic salary,” said Fayyad, adding that “there will also be an increase in salaries for this year based on the changes in the last two years.”
While this is true for public employees, it may not be the case for employees of the private sector, said Fayyad. However, he explained, the government is working on having a minimum wage to be applied in all economic sectors and which takes into consideration cost of living increases and inflation rate.
He said his government was conducting dialogue with the various trade unions on issues that are of concern to the Palestinian people hoping to reach an understanding on what the government can do.
While the government employs over 150,000 people, said Fayyad, “we do not want to be the main employer in the economy.”
He stressed that the private sector should be encouraged to create jobs, explaining that around one million people work in the private sector and civil society organizations.
The private sector should create jobs, said Fayyad, and the job of the government is to create the proper environment for these investments. However, he said the Israeli occupation remains the major obstacle to job creation because it has control over 60% of the area of the West Bank and does not allow investment there.
Fayyad defended his tax policy saying that any person with income less than $700 pays zero tax, while maximum tax imposed on income does not exceed 15%. He said that over 250 big companies pay over half of the revenues collected in taxes.
“We are not going to increase taxes,” stressed Fayyad, who nevertheless said the Palestinian Authority plans to end reliance on foreign aid by the year 2013.
“We should end our reliance on foreign aid as soon as possible,” he said, explaining that continuing to rely on foreign assistance creates a sort of dependency on an outside source and hinders efforts to find local resources.
The number of families on social welfare increased from 65,000 to 95,000 last year, said Fayyad, adding to the financial burden of the government, which pays 24 million Israeli shekels ($7m) in assistance to special needs families.
However, he said, figures by the Palestinian Central Bureau of Statistics showed that the number of people under the poverty line has dropped in recent years by a third.
While unemployment is also high, it has also dropped in recent years.
“We are back to where we were in 2000,” said Fayyad in reference to the date the intifada broke out. “This is not great, but at least we have stopped the decline.”
Fayyad said his government is not planning to change the general policy of not intervening in the market. However, he said, monitoring prices of goods will be improved to make sure merchants do not exceed set prices for basic commodities.
