Palestinian leaders cancel tax hikes amid protests

JERUSALEM -- Responding to violent protests in several West Bank cities, the Palestinian Authority said Tuesday it would cancel planned tax hikes on cooking gas, fuel and other commodities.

Rising consumer prices in recent months and the authority’s ongoing financial crunch sparked clashes Monday between protesters and Palestinian security officers.

After an emergency cabinet meeting Tuesday, Prime Minister Salam Fayyad said he would offset the lost tax revenue by slashing salaries of top government ministers and other senior officials. He also promised the government would pay partial salaries by next week to government employees who are still awaiting their August paychecks.

Due in part to a drop in international aid over the past two years, the Palestinian Authority is struggling with a monthly deficit of $100 million. Among those nations that have not delivered promised aid is the United States, which pledged $200 million.

Israel has also been alarmed by the demonstrations, which some fear could grow into another uprising against Israel’s occupation of the West Bank. According to a report on Israel Radio, Israeli officials are considering loaning money to the Palestinian Authority or moving up the delivery of monthly tax receipts that Israeli port officials collect on behalf of the Palestinians.


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Photo: Palestinians demonstrate against the high cost of living in the West Bank city of Ramallah on Tuesday. The prime minister pledged on Tuesday that the Palestinian Authority will cancel planned tax hikes on fuel and cut salaries of top officials. Credit: Majdi Mohammed / Associated Press.

Palestinians protest in West Bank cities over economy

RAMALLAH, West Bank — Hundreds of Palestinians protested across several West Bank cities Monday, one of the most violent eruptions yet in the growing public uproar over rising consumer prices and the Palestinian Authority’s budget crisis.

Youths in Ramallah and Bethlehem threw stones, burned tires, blocked roads and set trash cans on fire. Thousands of taxi and truck drivers launched a strike throughout the West Bank to protest the recent spike in gas prices.

Holding signs that read, “We Need a Loan to Buy Gas,” the drivers called upon the cash-strapped Palestinian government to subsidize the latest hike.

Though the day's protests, which were also reported in Hebron and Jenin, appeared spontaneous and disorganized, there were concerns that the movement is gaining steam. On Tuesday, students from colleges and high school are planning to participate in a one-day strike in support of the transportation workers.

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And you think you're mad about gas prices


Every day on WorldNow, we choose an amazing photo from around the world. Today we took note of this shot from Indonesia, where protesters are furious about government plans to increase gas prices.

The Indonesian government is planning to raise fuel prices by a third, bringing the cost of subsidized fuel to 65 cents a liter, or $2.38 a gallon, Bloomberg News reported. Government officials say they have to reduce subsidies to avoid increasing the deficit.

"Without raising domestic fuel prices, the government's subsidy bill will continue to bloat," Fauzi Ichsan, senior economist with Standard Chartered Bank in Jakarta, told the BBC.

That hasn't made the idea any more popular. “It just means misery,” Nining Elitos, chairman of the Indonesian Trade Unions Alliance, told Agence France-Presse.

Roughly 2,500 protesters sang songs and sat outside the presidential palace and parliament Thursday in Jakarta to agitate against the plan, Bloomberg reported. Some of the demonstrations grew violent as students hurled stones at police. Demonstrations have also broken out elsewhere in Indonesia: In this photo, a student protester leaps over a fire set in Makassar, the capital of the South Sulawesi province.

Indonesia isn't alone: Dropping fuel subsidies has been a politically dicey move around the globe. Nigeria backtracked on a similar move early this year after protests exploded. Bolivia reversed course on slashing fuel subsidies a year earlier, after an uproar known as the gasolinazo.

How governments subsidize or tax fuel accounts for much of the difference in the price of gasoline in different countries, which is why fuel is priced very differently from one part of the world to another -- and why cutting back on fuel subsidies can cause so much uproar when it happens.


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Photo: A student jumps over fire Thursday in Makassar,  Indonesia,  during a protest of the government's plan to raise fuel prices. Credit: Elang Herdian / Associated Press



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