The Fiscal Situation of Palestine: Can the Grip of Chronic Distress Be Loosened?

Abstract

The study based on the available materials, facts and events shows chronic diseases of the Palestine’s fiscal situation. The authors see the main reasons for this in the fact that Israel managed to impose on the state of Palestine not only economic, organizational and managerial, but also political mechanisms and tools for managing and regulating the financial and budgetary sector. But this is not the only reason. The analysis focuses on the international controversy between two points of view: the first shows and defends the idea of the crisis of the Palestine’s fiscal situation. Its apologists attribute the reasons for this to the occupation of the Palestinian territory and to the occupation regime, undermining the possibility of creating normal living conditions for the Palestinians. The opposite view either denies the state of deep crisis in the financial and budgetary sector of Palestine or attributes it to the shortcomings and failures of the Administration unable to cope with the existing problems. The article analyzes in detail the influence of international actors, organizations and structures on the Palestine’s budgetary and financial situation. The results of the study do not give a clear answer as to how the existing problems will be resolved. Theoretically, they can be positively resolved only in case of creation of a full-fledged state of Palestine. In practice, Palestine and Israel are not able to resolve the problems of the inherent antagonistic conflict by themselves. But Israel today uses the capacity and skills of its administrators, managers and financiers and with the support, first of all, of the United States maintains its leadership and receives preferences in the financial and economic sphere of the Palestinian Autonomy. In the medium term, the fiscal situation of Palestine will retain its chronic problems and contradictions. Their aggravation will be associated with the outbreaks of radicalism and armed clashes in the structure of relations between the two countries and with the rise of radicalism within them.