During a workshop held by AMAN Coalition on the liquidity crisis in the Gaza Strip
The need to strengthen official and societal control over the work of exchange companies and the importance of digitization in early recovery
Ramallah - The Coalition for Integrity and Accountability (AMAN) held a workshop to discuss a draft research paper entitled: “Oversight and Accountability of Exchange Companies in Gaza in Light of the War of Annihilation.” The purpose of the workshop was to provide recommendations to reduce the challenges faced by citizens and the banking sector in the Gaza Strip in dealing with the liquidity crisis in general, and to enhance the effectiveness of formal and community oversight of the banking sector in particular, including the effectiveness of oversight and accountability of the Monetary Authority and other institutions over exchange companies there, and the efficiency of the complaints system in the banking sector, in order to provide recommendations that contribute to the reduction of the blackmailing citizens are facing as a result of insufficient liquidity.
The occupation, with its aggression and destructive policy, is responsible for undermining the work of the Palestinian financial sector
The session, which was held via Zoom, began with researcher Dr. Sami Abu Shamaleh reviewing the research paper's most prominent conclusions and recommendations. He further diagnosed the situation and failure of official Palestinian institutions and international institutions to bring cash into the Gaza Strip because of Israeli refusal and security and logistical obstacles on the ground. In this situation, Palestinian citizens have been the victims trapped between the fire of the war and the difficulty of providing daily bread on the one hand, and the exploitation by some money changers and shady traders of the state of chaos, the absence of the rule of law and the weak and declining role of regulatory institutions on the other hand. The paper emphasized that the occupation bears responsibility for undermining the work of Palestinian institutions, including financial institutions, by preventing the entry of cash and maintenance equipment for ATMs and cars for transporting money, and deliberately undermining the rule of law in the Gaza Strip, not to mention the destruction of bank headquarters and ATMs, which resulted in the existence of only one bank branch and one ATM operating in the Gaza Strip.
Weak accountability and oversight led to the spread of random money exchange practices in the Gaza Strip
The participants discussed the impact of the lack of liquidity and weak official oversight and accountability of money exchangers, including the emergence of an unorganized money exchange market. Consequently, traders and exchangers rich in cash abused the current situation to generate unfair profits. They manipulate the exchange rate and do not apply the international exchange rate. Furthermore, citizens face blackmail when they try to withdraw cash from the banks or when they need to receive an external transfer. They are obliged to pay foraminous commissions and deal with worn-out banknotes, which merchants refuse to accept. This resulted from frequent daily trading of Israeli Shekel, which affected the liquidity of cash available for daily trading.
Need for additional awareness-raising efforts by the Palestinian Monetary Authority
The Participants mentioned the weak supervisory role of the PMA and other oversight bodies in monitoring money changers during the genocidal war due to Israeli occupation practices and restrictions. The PMA limited its role to a number of awareness campaigns and some field follow-ups due to the difficult security situation and lack of coordination between the PMA and the ruling authorities in Gaza since the political division in 2006. As a result of this situation and the massive destruction and sabotage of ATMs that have put them out of service, the ability to undertake deterrent measures against violators, fraudsters, and extortionists has been undermined
The PMA has worked to create and develop alternatives to cash payments, by encouraging citizens to open e-wallets to exchange payments, promoting electronic points of sale, and launching the iBURAQ instant payment system to speed up the transfer and payment process, but its awareness role in these digital tools still needs to be developed and more efforts need to be made.
Ineffective response to complaints under the genocide
In terms of official and societal accountability for dealing with complaints, the Monetary Authority does not have published statistics on the number of complaints, their nature, and the mechanism for dealing with them. There were complaints from citizens that the response to their complaints during the genocidal war on Gaza was ineffective. Police teams in Gaza were targeted when they tried to protect the headquarters of financial institutions in the Gaza Strip. They were only keen to take organizational measures for some ATM queues because citizens complained of bullying at ATM queues. The participants pointed out that it is important to motivate the Monetary Authority's employees to return to their duties, and to increase field follow-up and monitoring efforts under the current circumstances. Participants pointed out the importance of the Monetary Authority motivating its employees to return to perform their duties, increasing follow-up and field monitoring efforts under the current circumstances, and enabling the Monetary Authority centers to follow up on complaints and exercise their supervisory role over exchange companies and violators, and take legal measures against violators after the war.
The need to launch regional and international advocacy campaigns to pressure the occupation to allow cash into the Gaza Strip
The participants recommended increasing coordination between the Palestinian Monetary Authority and the governing authorities in the Gaza Strip to provide a deterrent environment for fraudsters and extortionists and to protect citizens, and to exert more effort to pressure the occupation to allow the entry of liquidity and replace worn-out liquidity and old issues of the shekel currency, through regional and international advocacy campaigns, as well as through the associations to which the Monetary Authority belongs, in addition to coordination with international institutions to strengthen their request for the entry of liquidity, and educate and reassure citizens and merchants that worn-out currencies and old issues of the shekel currency have the power of legal exoneration and that the PNA will replace them as soon as the restrictions on the movement of money to the Gaza Strip are lifted.
Cooperation with chambers of commerce must be strengthened to deter violators
Participants also emphasized the importance of strengthening cooperation between the Monetary Authority, chambers of commerce and the private sector to take measures to prevent merchants from charging high commissions when selling cash, and to promote digital payment methods, and the importance of promoting social accountability by establishing coordinating bodies that include representatives from the Monetary Authority, tribes, law enforcement agencies in Gaza, and local committees to coordinate and conduct advocacy campaigns to reject the extortion of citizens when trying to obtain cash, in addition to creating national initiatives from the local community to promote values of integrity, local administration and social accountability through local committees of representatives from the chambers of commerce and the private sector to press for an end to the phenomenon of kickbacks and high commissions, and to publish blacklists of those proven to be involved in these operations, and submit them to the competent authorities to take legal measures after the end of the war.
Diverse comments:
Dr. Ghassan Abu Hatab, coordinator of the Center for Development Studies at Birzeit University in the Gaza Strip, stressed in his intervention that the Israeli occupation is not saving any effort to change the economic reality in the Gaza Strip, as it affects the formation of a future social, political and economic map after the end of the war in the Gaza Strip. This reality is further reinforced by the cash-inflated traders (those who hold the financial wealth) and the resulting large chain of street vendors, wholesalers, protection and insurance personnel, as well as the complicity of some money changers, which makes them partners in the commission crises for citizens.
Dr. Saif al-Din Odeh, Head of the Policy Department at the Monetary Authority, expressed his concern about the liquidity crisis that the occupation has deliberately created to rob people and destroy the Palestinian economy, likening it to the flour crisis, as it is no less dangerous. Odeh emphasized that the banking system is also suffering in light of the exceptional situation and the catastrophe that hit the economy - as he described it - since we do not issue the currency that we deal with in the market, nor do we control the cash flow in and out of the Gaza Strip. Odeh also highlighted the hundreds of unlicensed money changers from the Monetary Authority, who manipulate exchange rates in the market according to their whims, and even control the exchange and clearing system outside the official system, without any legislative or official oversight.
Odeh also called for a radical solution, with the intervention of UN organizations to bring cash into Gaza, which also requires taking the worn-out cash out of the Strip and forcing the occupation to abide by the Paris Protocol. He also called on the Federation of Chambers of Commerce to act boldly according to the emergency provisions, which includes forming a committee to prepare a blacklist and an immediate freeze on bank accounts.
Ahed Abu Ramadan, head of the Gaza Chamber of Commerce, expressed the readiness of the Federation of Chambers of Commerce to contribute to addressing the issues in cooperation with the Ministry of National Economy and the Monetary Authority, noting that they work directly with UN and relief organizations and with Jawwal Pay. He also called on the Ministry of National Economy and the Monetary Authority to intervene in the issue of electronic transfer.
Dr. Raafat Al-Araj, Regional Supervisor of Oversight at the Palestinian Monetary Authority in Gaza, stressed that we are in an exceptional circumstance, as most sectors are disrupted, and the banking service cannot be implemented without an electronic telecommunications infrastructure, noting that things have worsened further by the occupation targeting bank branches and the telecommunications network as the main nerve for electronic transfers.
Wael Baalousha, Regional Director of AMAN's office in Gaza, concluded the session, stressing the importance of early recovery and finding quick and urgent solutions for citizens through digitization. He suggested forming a committee represented by all relevant sectors to activate the claims and improve the banking services currently provided in the war, which is urgent and required, noting that AMAN is following the issue closely and will continue to do so in the framework of enhancing the effectiveness of official and societal monitoring of the banking sector in the Gaza Strip.
