Palestinian Workers Campaign for Social Justice
On the hot afternoon of April 19, 2016, thousands of workers and
unemployed took to the streets of the West Bank city of Ramallah in protest the
labor policies of the Palestinian Authority (PA). As the sun beat down on their
shoulders, the marchers remained defiant, shouting “Haramiyya! (Thieves!),” as they
reached the rally point in front of the Council of Ministers and Ministry of
Interior buildings. Organizers from independent workers’ movements, left
political parties and women’s committees took turns addressing the crowd from a
makeshift platform on the back of a truck. PA police and security forces were deployed,
some in riot gear and armored vehicles, but they did not visibly interfere. The
demonstration was the first public, collective manifestation of a campaign
against Social Security Law 6, ratified by decree on March 9, 2016 by President
Mahmoud ‘Abbas.
The opposition to the social security law is led by newly formed
independent workers’ movements and their allies in civil society. Their
campaign follows closely upon wildcat strikes by perhaps 30,000 teachers in
February and March of 2016. Both efforts are emblematic of Palestinian workers’
growing rejection of the package of neoliberal economic nostrums on offer from
the PA in lieu of an end to Israeli settler-colonial rule.
In 1997, after the Palestinian Legislative Council (PLC) released
a report on corruption among PA ministers, President Yasser Arafat infamously
quashed judicial action against the accused, telling legislators: “We will
worry about our internal problems—the questions of social justice within
Palestine—after we fight colonialism, our common enemy.” [1] This injunction
is recited still by officials in the PA and its affiliated labor federations,
as well as some outside supporters of the Palestinian cause.
But the social and colonial questions in Palestine are
co-constituted. To separate the occupation from injustices in Palestinian
society is to conceal the complex relations between capital accumulation and
class transformation, the PA’s authoritarian practices, and Israel’s colonial
project. An understanding of these relations is crucial for those committed to
transnational solidarity with Palestine.
Shock Therapy
The campaigners against Social Security Law 6 criticize the
measure on several grounds. First, they object to the law’s provision for
depositing the retirement savings of private-sector waged employees in a new
national fund to be overseen by a council jointly appointed by the PA and
business interests. Private banks and companies are to manage these investments
in the financial markets. The law’s opponents say that it provides no guarantee
from the PA that money will actually be available to workers upon retirement
and demand PA accountability in safeguarding these funds. Second, the
campaigners oppose the increase in employee contributions into the fund and
instead demand an increase in the contributions of employers (business owners).
They call for bringing the pensions of private-sector workers into line with
the retirement entitlements of workers in the public sector, and for enforcing
a minimum retirement wage. [2] Third, the
campaigners decry the law’s discrimination against women, families of
pensioners, and the old and disabled, among other social groups. Some strands
of the independent workers’ campaign call for a national program of social
protection covering all workers, farmers and unemployed. [3]
Social Security Law 6 is part of a program of economic shock
therapy that began in 2007. The PLC has not formally convened since late 2006,
so all of these laws were drafted or amended by presidential decree with
limited public disclosure. The new independent unions and workers’ committees
see a multi-front attack on labor reflecting the demands of big business.
In 2014, the Investment Promotion Law of 1998 was altered to
provide tax relief to large private interests in the name of a more
“investment-friendly” business environment. [4] In early
February 2015, the PA Ministry of Labor introduced a draft law on unions, which
according to independent labor federations will suppress labor organizing by
imposing strict conditions under which strikes and meetings can be called.
Likewise, the federations express concern that proposed amendments to the
existing labor law will ease the procedures for dismissal when workers are
already subject to contracts that are increasingly short-term and irregular. In
closed-door meetings later that month, the Council of Ministers and big
business reached an agreement on further reductions to corporate and individual
tax rates. Independent unions, who were not invited to take part in these
discussions, note that the tax law is unfavorable to the poor and working
classes. President ‘Abbas ratified the agreement as law nonetheless. Most
recently, on January 23, 2017, the PA suspended the al-Aqsa intifada health
insurance, which provided free access to medical care for the more than 400,000
unemployed Palestinians and their families. (Subsequently, the PA announced
that al-Aqsa insurance is to remain available to families approved by a new
oversight committee to be established. Labor organizers received the news
skeptically, viewing it as a public relations move.)
Finance and Labor Discipline
The Social Security Law is central to a process of ongoing
financialization in the West Bank, as private companies and banks, in
particular, are given unchecked liberties to invest and profit from the
retirement pensions of Palestinian workers. (Financialization refers to the
ascendant role of finance and financial institutions in the economic activities
of a country and the operations of capitalism globally.) For instance, the
administration of Prime Minister Salam Fayyad initiated a major expansion of
consumer credit from 2007 as part of a strategy of private sector-led
development under the banner of economic nationalism.
Also central to the process of deepening financialization has been
the reconstitution of the functions of the PA to intervene in the construction
of the free market, especially in finance and land. To support the new suburb
of Rawabi (north of Ramallah), for example, the PA enacted decrees to extend
the period of consumer loans from ten years to 25. In 2008, the Palestine Monetary
Authority issued directives to limit bank investment abroad to 55 percent (it
had been 65 percent) in order to create new sources of domestic lending. In
conjunction, donors and US financiers have come up with loan guarantee schemes
to boost credit supply. The World Bank is backing projects for land
registration and titling, while donors support the establishment of credit
registries to ease collateral requirements. The legal foundations for the free
market are being cemented.
These economic and legal spheres have been important domains in
which to promote the political pacification of labor in Palestine. The Oslo
era’s vision of economic peace has been a cornerstone of this strategy aimed at
bridging the material and political interests of Palestinian political,
security and PA-tied business figures; regional capital (Israel, the Gulf
Cooperation Council and Turkey, as well as Jordan); US finance capital; and the
Israeli business and security establishment, through cooperation and joint
venture projects. These patterns of normalization continue to the present day
in PA and donor visions of economic development, through the sectors and
projects given priority in the Palestinian Reform and Development Plan, and the
Quartet and Kerry initiatives, to which affordable mortgage finance and new
credit schemes have been key. [5] These
neoliberal modalities of accumulation and pacification, enacted in the name of
development, are inextricably tied to broader regional configurations of power.
The inter-relationships between US geostrategic interests in the Middle East
and the US-led neoliberal drive that have gone hand in hand with a push for the
normalization of relations between Israel and other countries in the region
have a strong bearing on the Palestinian economy. [6]
Social Security Law 6 should be situated within this broader
logic, as part of a process of class restructuring and labor disciplining in
Palestine through the deepening financialization of the economy. As distinct
from social services for vulnerable segments of the population (covered by the
Ministry of Social Affairs), social insurance refers to the individual-based
retirement contribution system. In line with the neoliberal ethos, each
individual worker is responsible for assuring their pensions for retirement
based on monthly contributions while at work. In 2003, the PA issued the Social
Insurance Law concerning retirement pensions for workers in the private sector
and civil society. This legal codification of labor rights took place in the
same period as the launch of President George W. Bush’s “road map to peace for
Israel-Palestine,” a process during which the political struggle of the
Palestinians was increasingly reframed by the language and logic of Palestinian
state building. In 2005, the PA issued Public Pension Law 7 for workers in the
public sector, with a subsequent amendment in 2007. In the same year, the PA
cancelled the Social Insurance Law and started work on an optional
non-governmental retirement scheme that was to cover employees of
private-sector organizations. This new scheme pooled workers’ retirement
pensions to be managed and invested in the financial markets. The major banks
played a key role in the preparation of the new system. [7]
The pensions of Palestinians who have spent their lives laboring
in Israel and the settlements provided a particular political impetus to pass
Social Security Law 6. According to Article 7 of the Paris Protocol, concluded
in 1994 as part of the Oslo agreement, Palestinian workers in Israel and the
settlements automatically have their social insurance contributions deducted by
their Israeli employers on a monthly basis. These funds are then held by the
Israeli National Insurance Institute and are transferred to the Palestinian
side only once an institution outside the control of the PA is created. [8] According to
the new law, these funds are now to be part of a complementary system that will
be managed by a private company and banks, but the law does not specify how
these monies will be transferred to workers themselves. Retired Palestinian
workers who spent their lives as laborers in Israel or the settlements are now
asking, “What of my savings for old age?” [9] Should Israel
make the transfer, the banks and conglomerates in Palestine would obtain a
sizable fraction of $8 billion in new capital—the estimated value of fees
deducted from the wages of Palestinian workers in Israel—for their own
financial investments. [10]
As financial institutions pool workers’ retirement savings, they
are simultaneously expanding and easing credit. As a result, the levels of
indebtedness of Palestinian workers are rising dramatically. The amount of
credit issued for residential real estate, automobile purchases and credit
cards increased by 245 percent between 2008 and 2011. [11] While debt
bondage is a global phenomenon, Palestinian workers face special constraints.
Under the Paris Protocol, Palestinian workers are subject to Israel’s
macroeconomic policies, such as those setting interest and exchange rates.
Palestinian workers may earn salaries in Jordanian dinars, but their loan
agreements will likely be in US dollars—and with fluctuating exchange rates,
workers are left in chronic uncertainty. In addition, special legal provisions
mandate that salaries of Palestinian workers must be directed to the banks from
which they obtain loans, where banks deduct a percentage of workers’ salaries
toward loan repayment. This provision leaves Palestinian workers particularly
vulnerable due to the periodic Israeli impoundment of PA clearance revenues. At
such times, public-sector workers may receive no salaries for months on end,
but they still owe loan payments unless the Palestine Monetary Authority issues
special relief measures.
The credit push affects all workers, even those who are not
formally in debt to banks. With two thirds of consumer lending directed to
Ramallah, rents and land prices are skyrocketing in the city. Gentrification in
downtown districts and the old city is rapid as banks buy up venerable
limestone houses. Many white-collar workers are no longer able to afford rents,
and those who can afford them are forced to choose between high rents and a
mortgage. Meanwhile, migrant workers—who commute to Ramallah from Nablus, Jenin
and Hebron—are often left to sleep at construction sites.
New financial instruments are also being used as tools for direct
political interference. The $500 million Affordable Mortgage and Loan Scheme,
for example, contains explicit provisions for vetting of participants by the PA
security forces. With significant funding from the Overseas Private Investment
Corporation affiliated with the US government, all implementing agencies and
their employees, and loan recipients themselves, must pass the scrutiny of US
Office of Foreign Asset Control regulations and US anti-terror legislation.
Segments of Palestinian society considered “a threat” by the PA forces, which
are dominated by the Fatah party to which President ‘Abbas belongs, thus do not
qualify for these programs. As a partner in this program, the Palestine
Investment Fund—the so-called sovereign wealth fund of the Palestinians—also
must adhere to US anti-terror statutes. [12]
The Making of the Client-Consumer
Since the installation of the “caretaker government” in 2007, the
rhetoric of the PA has increasingly framed the horizon of politics in Palestine
in a developmental and consumerist idiom. The 2014-2016 PA National Development
Plan, entitled State Building to Sovereignty, articulates its view of
development as follows: “We are resolved to empower our citizens, helping them
manage the transition from dependence to self-reliance, thereby achieving
prosperity and a decent way of life.” [13] As they face
the onslaught of Israeli colonization with assassinations, settlement
expansion, closures, checkpoints and other types of collective punishment,
Palestinians are also being squeezed to become exemplars of homo economicus—the
trans-historical figure posited by neoclassical economics who makes ever
rational decisions in pursuit of self-interest—and to become responsible
consumers who will take advantage of expanding credit, the growth of the stock
and mortgage markets, micro-finance and public-private partnerships for
infrastructure projects that are part and parcel of this neoliberal vision of
emancipation.
While the Palestinian Authority withdraws from its responsibilities
for social protection, wage laborers are being told to trust in the financial
markets for their retirement savings. This disciplining of Palestinian labor is
taking place through the restructuring of the PA itself. In other words, the PA
is itself being disciplined to adopt the shock-therapy economic reforms of the
National Development Plan, while it works in turn to discipline its own
subjects, Palestinian citizens. Donors and creditors are pressuring the PA to
cut social expenditures, increase revenues and reduce the overall deficit.
Facing a fiscal crisis, the government took on short-term debt from domestic
commercial banks at high interest rates. According to the Ministry of Finance,
by the end of 2015 total public debt reached $4.6 billion or 41 percent of
nominal gross domestic product. A large portion of international aid is
earmarked to service the debt, but strings are attached: The Ad Hoc Liaison
Committee, a collection of foreign donors co-sponsored by the European Union
and the United States, “stresses the importance of prioritizing fiscal
consolidation of the Palestinian budget by reducing the deficit significantly”
through limiting the wage bill, reducing subsidies and social expenditures and
other structural reforms. [14]
The PA has already responded to the outside pressure. Since 2012,
with unemployment at about 30 percent according to official statistics, the PA
has maintained a policy of zero net hiring in the public sector. [15] In December of
that year, the PA reached a first-ever minimum wage agreement with a group of
workers due to a campaign led by the Union of Kindergarten Teachers; to date,
however, the agreement has not been implemented. Some 33 percent of wage
employees in the private sector earn less than the minimum wage of 1,450
shekels. [16] The
International Monetary Fund notes that the PA has reduced its deficit—on a
commitment basis—from 2.7 billion shekels in the first half of 2015 to 1.7
billion in the first half of 2016. [17]
To curb its deficit, the PA also targeted the category of net
lending. This seemingly innocuous line in the PA budget refers to funds that
are used to cover electricity bills owed by municipalities and refugee camps to
the private Israeli companies that have a monopoly on supply. The actual amount
of this debt is a source of controversy, but Israel has various means by which
to collect. In the midwinter of 2015, the Israel Electric Corporation cut off
the power to the West Bank cities of Jenin and Nablus for 45 minutes as a
warning over unpaid bills. [18] Another key
lever is the customs clearance money that Israel collects on the Palestinians’
behalf, by the terms of the Paris Protocol. By these accords, this revenue is
to be transferred monthly to the PA, which depends upon these transfers to pay
salaries. But Israel regularly impounds these funds to punish or coerce the
Palestinians. In early 2015, Israel withheld the clearance revenues for three
months until the PA agreed to the electricity debt amount of 500 million
shekels stipulated by Israel. The US and the European Union exerted pressure as
well. [19] To reduce the
electricity bill, the PA has introduced a system of pre-paid cards and legal
penalties and fines for non-payment, as well as shifting bill collection from
municipalities to private electricity distribution companies. The electricity
debt is but one example of processes of commodification, in which working
people and the unemployed in Palestine are ever more bound in the contractual
dream worlds of liberalism.
The levers of colonial control and neoliberal restructuring have
led to a deep fragmentation of the Palestinian collective body. Atomistic
understandings of the self and social conditions are legitimated in the
battlefield of neoliberal shock therapy, which seeks to transform the social
relations between human subjects and with state power. New forms of citizenship
based on individual choice, rights and contractual relations produce a
redefinition of emancipation as consumer choice. In this context, labor
confronts huge challenges as social and political responsibility are redefined
in a manner that weakens collective action.
Inequality and Political Polarization
While debt-based consumption and mortgages create a sense of
upward mobility for some, the bulk of the Palestinian population is dealing
with mounting household debt, falling real wages and rising prices;
unemployment and poverty; hiring and wage freezes in the public sector;
underfunded public services; pressure to eliminate PA subsidies for fuel,
electricity and water; and displacement from land to make way for private
developers. The GDP growth rate in the Occupied Territories dropped from 5.3
percent in 2014 to 2.5 percent in 2015; during the same period, the Arab
Palestine Investment Company, a major holding company, posted net profits after
tax of $12.4 million in 2015—an increase of 9.4 percent from 2014. The company
may well be on its way to achieving its “one billion dollar strategy” by
2020. [20]
In the face of such exacerbated inequality, the PA has become more
authoritarian. As documented by the Independent Commission for Human Rights in
Palestine, the PA has cracked down much harder on dissent since 2007, after
Hamas won the previous year’s PLC elections and the administrations of Gaza and
the West Bank split apart. The PA security forces in the West Bank, trained in
counterinsurgency tactics by US Gen. Keith Dayton, have cooperated closely with
the Israeli army in the interrogation and arrest of Hamas members, journalists
and activists supporting the boycott, divestment and sanctions campaign. Nearly
30 percent of the PA budget is directed to the security forces, while funding
for social sectors has been systematically reduced.
Workers’ organizing is also facing heavy repression. In November
2014, the Palestinian Council of Ministers issued a decision to illegalize the
Public Servants’ Trade Union. The union was subsequently shut down by the
police, with unionists arrested and dismissed from their work. [21] Leaders of
unions who attempt to organize on a mass level are charged with corruption and
entrenched in legal cases for years; workers’ committees organizing against
neoliberal and normalization policies in NGOs are arbitrarily dismissed from
their work and blacklisted. The PA’s attempts to suppress the springtime 2016
teachers’ strikes set a dangerous precedent: The security forces threatened
teachers; confiscated identity cards; arrested organizers, dissenting
journalists and social media users; erected checkpoints across the West Bank to
prevent collective mobilization; and imposed fines on taxi drivers who
transported teachers from place to place. Organizers of the teachers’ movement
have been forced to go underground.
Labor Fights Back
Over the last decade, independent labor federations and unions, as
well as informal associations and workers’ committees, have emerged nonetheless
to struggle against impoverishing conditions of life for Palestinian labor. The
public-sector workers’ strikes in late 2014, the teachers’ movement in March
2016 and the April 2016 protest against Social Security Law 6 are the most
visible manifestations of a broader mobilization around the theme of insaf, meaning equity or
justice.
The social security reforms were a central site of contestation
for more than three years, involving, among others, the International Labor
Organization, the PA Ministry of Labor, the private sector and research
institutes such as Muwatin and al-Marsad, as well as labor unions. Of the
unions, the PGFTU (headed by Shahir Sa’id), the Palestinian Trade Union
Federation (PTUF, headed by Haidar Ibrahim) and the General Federation of
Independent Unions (GFIU) were the key actors involved in the direct
negotiations. The talks exposed deep divides in the labor movement. Political
factions of the Palestinian Liberation Organization (PLO) appoint the
representatives of the PGFTU and PTUF. The PGFTU has a long-standing
relationship with the Histradrut, the Israeli labor federation, by which the
Histradrut passes on to PGFTU 50 percent of the dues it collects from
Palestinian workers in Israel (even though it does not represent these
workers). In public debates, both the PGFTU and PTUF backed many of the
proposed reforms in favor of business interests and worked hard to muffle the
GFIU’s dissent. Following the public debates and popular protests organized by
the National Campaign for Social Security, President ‘Abbas approved amendments
to the law reflecting several of the demands of the campaign.[22]
In a meeting with a delegation of Canadian unionists in the West
Bank, the head of the GFIU was asked, “And what is your position regarding
final status—two-state or one-state?” He replied, “This is a question only you
can afford to ask. We are at this point just struggling to live.” He continued,
It is clear for us that the struggle against colonialism cannot be
separated from the social injustices within Palestinian society. What does it
mean to end my subjugation by Moshe for it to be replaced by Munir? What kind
of liberation are we seeking? What kind of a society are we trying to build?
These questions cut to the deepest contradictions of the Oslo era.
The Oslo agreement sold the promise of a Palestinian homeland and called on the
masses to adopt a Palestinian national consciousness as defined by the PA
political order. Yet the words of Frantz Fanon remain prescient for Palestine
today:
This national consciousness, instead of being the all-embracing
crystallization of the innermost hopes of the whole people, instead of being
the immediate and most obvious result of the mobilization of the people, will
be in any case only an empty shell, a crude and fragile travesty of what it
might have been. [23]
Endnotes
[1] Interview
with members of the Palestinian Legislative Council, Ramallah, 2009.
[2] Firas Jaber, “The Social
Security Law in Palestine: A Seek [sic] for Justice,” Rosa Luxemburg Stiftung
Regional Office Palestine, January 2017.
[3] Interviews with GFIU members,
Ramallah, 2016.
[4] The text of the law is available here.
[5] Office of the Quartet; Palestine
Economic Policy Research Institute (MAS), Abundance of Development Plans and Initiatives for
Palestine: “Points of Convergence and Divergence” (April
2014).
[6] See Adam Hanieh, “The Oslo
Illusion,” Jacobin,
April 21, 2013, and “Palestine in the Middle East: Opposing Neoliberalism and
US Power,” MRZine,
July 19, 2008.
[7] Jaber, op cit.
[8] Ibid.
[9] Interview with head of the
Union of Unemployed, southern West Bank, March 2017.
[10] Ahmed Milhem, “Will the New
Social Security Law Protect Palestinian Workers?” al-Monitor, October 5,
2016.
[11] Hanieh, “Oslo Illusion.”
[12] See the June 2010 press release of
the Overseas Private Investment Corporation.
[13] See the National Plan, p. 14.
[14] See the Ad Hoc Liasion
Committee meeting notes here.
[15] UN Conference on Trade and
Development, Report on UNCTAD Assistance to the Palestinian People:
Developments in the Economy of the Occupied Palestinian Territory (July
2015).
[16] Palestinian Central Bureau
of Statistics, Labor
Force Survey (Ramallah, 2016).
[17] International Monetary
Fund, “West Bank and Gaza: Report to the Ad Hoc Liaison Committee,” August 26,
2016.
[18] Jerusalem Post, February 23, 2015.
[19] Haaretz, April 18, 2015.
[20] Arab Palestine Investment
Company, Annual
Report (2015).
[21] Independent Commission for
Human Rights, The
Status of Human Rights in Palestine (2014). See also
International Labor Organization, The
Situation of Workers of the Occupied Arab Territories (2015).
[22] Milhem, “Will the New
Social Security Law Protect Palestinian Workers?”
[23] Frantz Fanon, Wretched of the Earth (New
York: Grove Press, 1963).
