Observers

Palestinians living in the West Bank have been protesting for almost two months to ask the government to pull back on the first ever proposal for social security. Many think the law gives further advantages to wealthy people, and criticise it for not including health coverage and for having been partially conceived out of an agreement with Israel. The law’s adoption on November 1 appears to have deepened the rift between the authorities and the population.


For weeks, the square in front of the government of the Palestinian Authority in Ramallah has been full of people, all come to protest the new social security law adopted at the beginning of November. The law was put in place by the Institution of Social Security, a body formed specifically to manage the law. The measure mostly concerns pensions and maternity cover.


Photos from a protest in early December against the social security law. A sign reads, “Why a social security law when we’re being fired at by [Israeli] soldiers?”

"This law is unfair"

Ahmad Makhlouf, 33 years old, is a sales representative in a pharmaceutical laboratory. He took part in the demonstrations.
 

The protesters are predominantly employees working in the private sector, because for the moment they are the only ones impacted by this law, as civil servants are covered by a different state social security system. On top of making a distinction between workers in the private and public sectors, the law is even more unfair because paying into it is obligatory up to a salary ceiling of 11,600 shekels [€2,740]. Over this amount, workers aren’t taxed. It’s a measure that clearly benefits rich people.

This law was put into place without anyone really understanding how it was even drafted. We haven’t had a parliament since 2007 [the last legislative elections in Palestine were in 2006, when they were won by Hamas following an armed conflict between Hamas and Fatah. Since then, parliamentary work has been suspended and Fatah controls the West Bank while Hamas controls the Gaza strip]. There was no transparency around the choice of the commission that drafted the law.

I take issue with the amount of the obligatory contributions, which are 7.5% for employees and 8.5% for employers – this despite the fact that we already have a very difficult economic situation here. What’s more, we have no guarantee that this money will actually go into a pensions fund and that we’ll get it back when we’re 60. There’s so much corruption that we have the impression that the government is just lining its own pockets with our money. There have been so many cases of politicians fleeing the country after having stolen public money.”


 

"My wife and I are almost considering divorcing when we reach 59 just so we each get a pension!"

Take the case of two private sector workers, as is the case for my wife and I. We’re both meant to contribute until we’re 60. But when we’re both retired, the law means that the couple will only receive one pension between them, and the wife will be connected to her husband’s account, even if she earned more than him! Everything she contributed just goes into the fund. It’s hardly surprising, with a commission mostly made up of men… We’re almost considering divorcing after 59 years just so we each get a pension!

The government is refusing to call a referendum on the law because in my opinion, they know it’s unpopular and that it’s not in the interests of the people but of the government. These protests are of course against the social security law, but they’re also indicative of the fact that we have no confidence in our government ever since the Oslo Accords [the set of agreements signed in 1993 by the Israeli government and the Palestinian Authority and which marked the end of the First Intifada].

This law is the result of negotiations between Palestinians and Israelis. Since 1970, thousands of Palestinian workers have been crossing checkpoints in order to work in Israeli businesses, where they are officially employees and so contribute money to social security. But after negotiations between ministers of labour and trade union leaders on both sides, Israelis and Palestinians reached an agreement on an estimation of the amount of contributions that Israelis should reimburse Palestinians. The condition for giving back this money is that it should go into a non-governmental fund, which is what this new law is meant to ensure.

If the majority of protesters are simply asking for the law to be rescinded, other outspoken critics of the law including many NGOs are asking for it to be modified, arguing that, while social security cover is necessary, it’s the way in which it’s implemented that poses a problem.

"This law uses a logic which doesn’t at all take into account the reality of the situation for Palestinians"

Gebril Mohamad Jahshan is an academic and member of the Bissan Centre for Research and Development, an organisation that defends economic and social rights.

The legal framework around social security has been the subject of debate in Palestine since 2003. At the time, there was a parliament that had voted for the law and was then approved by the president. But the World Bank rejected its application because there weren’t enough financial resources to put a state system in place. The following year, the idea of putting in place a system covering the private sector started to make headway.

It’s true that the make-up of the administrative committee is problematic. It was meant to be tripartite, and made up of governmental and trade union representatives as well as people from the private sector. However, the government chose people close to the government to represent the other two sectors, like Ma’moun Abou Chahla, who was not only the Minister of Labour, but also the president of the administrative committee behind the law and a member of the Bank of Palestine, which is the financial partner of the social security fund. It’s a huge conflict of interest!

We need social security cover, but what has been set up isn’t enough. The law doesn’t include health cover, only pensions and maternity leave. It also doesn’t look after unemployed people, even though there is a 27% rate of unemployment in Palestine.

It doesn’t even apply to all private sector workers, seeing as only people working at least 16 days a month are considered regular workers. The law will only tax regular, declared workers in the private sector whereas the services sector, which represents 70% of the Palestinian economy, is in large part informal.


"In a country where the poverty rate is close to 45%, it’s entirely normal that people refuse to pay out even more"

The contributions method also shows just how out of touch the people who drafted this law are with the economic reality of Palestinian society. The contribution ceiling has been fixed at nine times the minimum salary, which is 1,450 shekels [340 euros]. But this minimum doesn’t mean anything because no one can live on that. In Palestine there’s a huge gulf between people’s household earnings and the cost of living. And in a country where people spend on average 36% of their income just to feed themselves, and where the rate of poverty is hitting 45%, it’s entirely normal that people refuse to pay more, even if it is to put money towards their retirement.

At the heart of it, the government’s aim isn’t to protect its citizens, but to get money. And this law fits into the logic of a tax system where the government subsists off taxes and foreign aid, because there’s no domestic production.

Article written b  Sarra Grira.