Jerusalem // Over the past four decades Israel has defrauded Palestinians working inside Israel of more than US$2 billion (Dh7.4bn) by deducting from their salaries contributions for welfare benefits to which they were never entitled, Israeli economists revealed this week.
A new report, "State Robbery", says the "theft" continued even after the Palestinian Authority was established in 1994 and part of the money was supposed to be transferred to a special fund on behalf of the workers.
According to information supplied by Israeli officials, most of the deductions from the workers' pay were invested in infrastructure projects in the Palestinian territories - a presumed reference to the massive state subsidies accorded to the settlements.
After the recent easing of restrictions on entering Israel under the "economic peace" promised by Benjamin Netanyahu, the Israeli prime minister, nearly 50,000 Palestinians from the West Bank are working in Israel and continue to have such contributions docked from their pay.
Complicit in the deception, the report adds, is the Histadrut, the Israeli labour federation, which levies a monthly fee on Palestinian workers, even though they are not entitled to membership and are not represented in labour disputes.
"This is a clear-cut case of theft from Palestinian workers on a grand scale," said Shir Hever, a Jerusalem-based economist and one of the authors of the report. "There are no reasons for Israel to delay in returning this money either to the workers or their beneficiaries."
The deductions started being made in 1970, three years after the Israeli occupation of the Palestinian territories began, when Palestinian workers started to enter Israel in significant numbers, most of them employed as manual labourers in the agriculture and construction industries.
Typically, the workers lose a fifth of their salary in deductions that are supposed to cover old age payments, unemployment allowance, disability insurance, child benefits, trade union fees, pension fund, holiday and sick pay, and health insurance. In practice, however, the workers are entitled only to disability payments in case of work accidents and are insured against loss of work if their employer goes bankrupt.
According to the report, compiled by two human rights groups, the Alternative Information Centre and Kav La'Oved, only a fraction of the total contributions - less than eight per cent - was used to award benefits to Palestinian workers. The rest was secretly transferred to the finance ministry.
The Israeli organisations assess that the workers were defrauded of at least $2.25bn in today's prices, in what they describe as a minimum and "very conservative" estimate of the misappropriation of the funds. Such a sum represents about 10 per cent of the PA's annual budget.
The authors also note that they excluded from their calculations two substantial groups of Palestinian workers - those employed in the Jewish settlements and those working in Israel's black economy - because figures were too hard to obtain.
Mr Hever said the question of whether the bulk of the deductions - those for national insurance - had been illegally taken from the workers was settled by the Israeli High Court back in 1991. The judges accepted a petition from the flower growers' union that the government should return about $1.5 million in contributions from Palestinian workers in the industry.
"The legal precedent was set then and could be used to reclaim the rest of these excessive deductions," he said.
At the height of Palestinian participation in the Israeli labour force, in the early 1990s, as many as one in three Palestinian workers was dependent on Israeli employers.
Israel continued requiring contributions from Palestinian workers after the creation of the Palestinian Authority in 1994, arguing that it needed to make the deductions to ensure Israeli workers remained competitive.
However, the report notes that such practices were supposed to have been curbed by the Oslo process. Israel agreed to levy an "equalisation tax" - equivalent to the excessive contributions paid by Palestinians - a third of which would be invested in a fund that would later be available to the workers.
In fact, however, the Israeli State Comptroller, a government watchdog official, reported in 2003 that only about a tenth of the money levied on the workers had actually been invested in the fund.
The finance ministry has admitted that most of the money taken from the workers was passed to Israeli military authorities in the Palestinian territories to pay for "infrastructure programmes". Hannah Zohar, the director of Kav La'Oved who co-authored the report, said she believed that the ministry was actually referring to the construction of illegal settlements.
The report is also highly critical of the Histadrut, Israel's trade union federation, which it accuses of grabbing "a piece of the pie" by forcing Palestinian workers to pay a monthly "organising fee" to the union since 1970, even though Palestinians are not entitled to membership.
Despite the Histadrut's agreement with its Palestinian counterpart in 2008 to repay the fees, only 20 per cent was returned, leaving $30m unaccounted for.
The Histadrut was also implicated in another "rip-off", said Mr Hever. It agreed in 1990 to the Israeli construction industry's demand that Palestinian workers pay an extra two per cent tax to promote the training of recent Jewish immigrants, most of them from the former Soviet Union.
Mr Hever said that in effect the Palestinian labourers were required to "subsidise the training of workers meant to replace them". The funds were never used for the stated purpose but were mainly issued as grants to the families of Israeli workers.
In one especially cynical use of the funds, the report notes, the money was spent on portable stoves for soldiers involved in Israel's three-week attack on Gaza last year.
In response, the finance ministry called the report "incorrect and misleading", and the Histadrut claimed it was "full of lies". However, neither provided rebuttals of the report's allegations or its calculations.
Mr Hever said the government body responsible for making the deductions, the department of payments, had initially refused to divulge any of its figures, but had partly relented after some statistics were made available through leaks from its staff.
Assef Saeed, a senior official in the Palestinian Authority's labour ministry, said the PA was keen to discuss the issue of the deductions, but that talks were difficult because of the lack of contacts between the two sides.
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Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
The Orwell Prize for Political Writing
Twelve books were longlisted for The Orwell Prize for Political Writing. The non-fiction works cover various themes from education, gender bias, and the environment to surveillance and political power. Some of the books that made it to the non-fiction longlist include:
- Appeasing Hitler: Chamberlain, Churchill and the Road to War by Tim Bouverie
- Some Kids I Taught and What They Taught Me by Kate Clanchy
- Invisible Women: Exposing Data Bias in a World Designed for Men by Caroline Criado Perez
- Follow Me, Akhi: The Online World of British Muslims by Hussein Kesvani
- Guest House for Young Widows: Among the Women of ISIS by Azadeh Moaveni
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Fixtures
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The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
The specs: Hyundai Ionic Hybrid
Price, base: Dh117,000 (estimate)
Engine: 1.6L four-cylinder, with 1.56kWh battery
Transmission: Six-speed automatic
Power: 105hp (engine), plus 43.5hp (battery)
Torque: 147Nm (engine), plus 170Nm (battery)
Fuel economy, combined: 3.4L / 100km
The%20specs
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
COMPANY PROFILE
Name: Mamo Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua Based: Dubai, UAE Number of employees: 28 Sector: Financial services Investment: $9.5m Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors. The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Russia's Muslim Heartlands
Dominic Rubin, Oxford
Neymar's bio
Total club appearances 411
Total goals scored 241
Appearances for Barca 186
Goals scored for Barca 105
Know your Camel lingo
The bairaq is a competition for the best herd of 50 camels, named for the banner its winner takes home
Namoos - a word of congratulations reserved for falconry competitions, camel races and camel pageants. It best translates as 'the pride of victory' - and for competitors, it is priceless
Asayel camels - sleek, short-haired hound-like racers
Majahim - chocolate-brown camels that can grow to weigh two tonnes. They were only valued for milk until camel pageantry took off in the 1990s
Millions Street - the thoroughfare where camels are led and where white 4x4s throng throughout the festival
Company%20Profile
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Duterte Harry: Fire and Fury in the Philippines
Jonathan Miller, Scribe Publications
