MIFTAH holds session to discuss participation of private sector and major companies in the 'Waqfet Iz' Fund and policies to combat poverty at the Ministry of Social Development during the pandemic
Ramallah – 22/10/2020 – On October 22, MIFTAH held a meeting to discuss the most significant results of two research papers. The first monitors the impact of facilitations the government offered to private sector companies, including tax exemptions in order to encourage them to increase their contribution to the Waqfet Izz Fund. The second pertains to government spending on policies to combat poverty during the coronavirus pandemic, which sheds light on the proposed policies and practical alternatives to promote the capabilities of the Ministry of Social Development in providing social protection from the pandemic’s impacts, especially on the more vulnerable sectors.
The presentation of the first study, conducted by researcher Mohammed Khalifa, discussed the establishment of the Waqfet Izz Fund and its goal of raising JD20 million ($28 million or ILS100 million) to support the Ministry of Social Development in helping needy families affected by the pandemic in addition to day and seasonal workers, among others. The fund also provides support for the Ministry of Health to meet its needs during the state of emergency such as necessary medicines and equipment. However, the fund did not succeed in raising this sum, only raising ILS62.1 million in the period between April 6 and July 4, 2020. The money was distributed as follows: Palestinians abroad contributed approximately ILS0.5 million or 0.81%; companies contributed approximately ILS50 million, or 80.5%; individual citizens: around ILS 9 million or 14.5% of the overall donations.
The study showed that the lack of responsiveness to the fund, whether by corporations or citizens could be attributed to a lack of confidence in the Palestinian government; meanwhile, ordinary citizens were hesitant to donate because the private sector itself only contributed a small percentage of the donations in comparison to the huge profits this sector made. What’s more, the fund was confined to the West Bank, which hindered access to other social sectors and minimized partnership and interaction among everyone. It also deprived social and geographic sectors from contributing to the fund all while the emergency budget maintained a funding gap of ILS5,040 million. This is why the PA set up funds and donation drives; funds were set up in the various districts along with emergency committees and a number of campaigns in all Palestinian cities and villages in order to strengthen abilities in responding to this pandemic.
The study made a number of recommendations, including: the need for governance; for an administrative and financial system for the fund that clarifies the decision-making process within it and its means of spending; the fund’s managerial makeup should be from all Palestinian areas, especially the Diaspora; the need to avoid deviations in the distribution of funds through allowing the Palestinian Central Bureau of Statistics to choose the names; stressing that major corporations which benefited from the law encouraging investment must have a stronger sense of moral and national responsibility when donating to the fund; the need for companies to abide by the principles of governance whereby a certain percentage of the company’s profits is earmarked for social responsibility and spent accordingly and for this to be part of the company’s bylaws. Meanwhile, keeping the door open to companies to assume their defined social roles as the pandemic escalates and to rectify the mistakes made during the distribution of funds.
Second Study: Monitoring Ministry of Social Development spending on policies to combat poverty during the COVID-19 pandemic
Researcher Mays Salameh then presented the study on monitoring expenditures for the Ministry of Social Development’s policies for fighting poverty during the pandemic. The study posed several questions about the challenges the ministry faced and the policies, plans and priorities it adopted, including the procedures taken due to the economic downturn in Palestine, because of measures by the occupation and the coronavirus pandemic. It also discussed the strategic goals of the ministry: poverty reduction, elimination of marginalization and promotion of social solidarity.
Results and recommendations
The study concluded with a number of results and recommendations, expressing the need to formulate emergency budgets capable of providing basic needs, especially for shelter institutions and those catering to special-needs, the elderly and poor families; also to invest in national funds for promoting the social protection system; promoting more commitment by companies working in the private sector regarding social responsibility; creating the necessary incentives to encourage companies to contribute to building a social protection system.
In this context, several reports showed the low level of donations from companies to which the law for encouraging investments is applied, in comparison to the size of tax exemptions they received in 2018 and 2019. They donated a total of $5.8 million only to the Waqfet Izz Fund, but received tax cuts of $50 million for 2018-2019, at around 11.6% only.
The study’s recommendations confirmed the need for the government to commit to paying the fourth quarter of cash assistance to prevent poor and marginalized families from losing 25% of their financial dues in one year and thereby further plunging these families into poverty. What’s more, the pandemic revealed that many charitable associations forfeited their roles, which calls for a review of the status of these associations and strengthening of their interventions in favor of a national plan that includes clear policies for combatting poverty and more involvement in an integral social protection system; the need to expand and enrich the package for aid and social services provided to poor families, where they are not only limited to cash assistance; combining social and cash assistance within the unified database for social assistance; stressing on the importance of providing data, which means the need for more computerization of all social operations; developing government information systems capable of quick responses to crises and disasters; the need for regulations within the national social crises registry capable of meeting the various needs of institutions; cooperating with institutions in exchanging information and expertise effective in directing financial resources to beneficiaries.
The interventions, which largely complemented the outcomes and recommendations of the two studies included: the need for the ministry to adopt policies based on an empowerment rather than relief approach, which necessitates the formulation of broader alternative plans to develop Palestinian development performance; to bridge the funding gap between the needs of the Ministry of Social Development and the budgets needed to respond to these needs; to promote an integral relationship with all ministries and institutions including documenting the relationship with official parties to create a Palestinian system that cements the foundations for Palestinian steadfastness.; to increase the Ministry of Finance budget so it is capable of meeting citizens’ needs in addition to unifying assistance and ensuring justice in distribution; the importance of promoting the monitoring role of civil society institutions and raising awareness on intervention and response plans.
The recommendations also confirmed the need to link the recommendations of the two studies with the outputs of the Waqfet Izz fund and the Ministry of Social Development policies for combatting poverty; holding the private sector partially responsible while reaffirming the importance of initiating a dialogue with this sector through formulating mechanisms that would allow access to Jerusalemite families and to apply different criteria than those in the West Bank regarding poverty levels.
This session is part of the “Finance for Development” project, which MIFTAH implements in partnership with AMAN and ARIJ and with support from OXFAM. It falls in line with MIFTAH’s strategic approaches represented in its continued lobbying and advocacy efforts to ensure social justice and equality in the development of public policies and to promote good governance in Palestine.