Mohammed Mustafa is the most important man in the Palestinian economy and a close confidant of Mahmoud Abbas. His resignation yesterday should be big news.
- By Jonathan SchanzerJonathan Schanzer is vice president for research at the Foundation for Defense of Democracies. , Grant RumleyGrant Rumley is a research fellow at the Foundation for Defense of Democracies and the co-author of the forthcoming book The Last Palestinian: The Rise and Reign of Mahmoud Abbas (Prometheus, July 2017).
Big news stories are a dime a dozen these days. Between the Iran nuclear talks in Lausanne, Switzerland, and the war in Yemen, it’s an ideal environment for making an important announcement and barely making any headlines.
Perhaps that’s what Mohammed Mustafa, the powerful deputy prime minister and economy minister of the Palestinian Authority (PA), was hoping for when he unexpectedly resigned yesterday morning at a regular meeting of the cabinet. A longtime confidant of Palestinian leader Mahmoud Abbas, Mustafa was once rumored to be the frontrunner for prime minister after the exodus of celebrated reformer Salaam Fayyad in 2013. But you wouldn’t have known it, given the lack of reaction to yesterday’s news.
Mustafa’s exit is a sign of great change on the horizon. He has been a key Abbas ally since Hamas took over the Gaza Strip in 2007. He helped Abbas consolidate dozens of organizations within the Palestinian Authority for fear of losing them to Hamas — or for fear of having international sanctions rain down once Hamas, a designated terrorist group, gained a foothold in PA institutions.
One such institution was the Palestine Investment Fund (PIF), a sovereign wealth vehicle holding some $1 billion created in 2003 after intense Western pressure for greater economic reform in the PA. Abbas appointed Mustafa general manager of the PIF in 2007, and within years Mustafa was elevated to CEO and chairman of the board of directors. Abbas’s trust in Mustafa was such that in 2013 he was appointed deputy prime minister.
Rumors circulated that Mustafa was passed over as prime minister only because of Western objections, primarily over concerns about the endemic corruption in the Palestinian economy that Mustafa oversaw. Rumors also swirled that Mustafa was locked in a power struggle with the new prime minister, Rami Hamdallah, once the cabinet took shape.
Whatever the internal dynamic may have been, Mustafa continued to have the ear of the Palestinian president. Abbas added minister of the national economy to Mustafa’s portfolio in 2014. All the while, Mustafa has continued to serve as chairman of the PIF. Mustafa was most recently put in charge of Gaza reconstruction following last summer’s war. At least one reporter suggests that this stalled effort, and possible financial misconduct, is what prompted his resignation.
Regardless of his reasons for leaving, Mustafa was undeniably the face of the Palestinian economy. He had the credentials to back it up, too. He holds a Ph.D. in management and economics from George Washington University and spent 15 years as a senior official with the World Bank. He was the founding CEO of a major Palestinian telecommunications network in 1995 to 1996, advised a public-private partnership fund in Saudi Arabia from 1997 to 1998, and served as an economic advisor in Kuwait in 2000.
Mustafa’s resignation could not have come at a more inconvenient time for Abbas. The aging Palestinian president has few close confidants, and recent polls indicate that his personal popularity (which was never high to begin with) is flagging. Palestinians are losing patience with his leadership, wondering what can be gained by the recent international campaign for recognition at the United Nations, coupled with its formal accession to the International Criminal Court on April 1.
Abbas is also struggling to convey strength and stability as he wrangles with his Hamas rivals to forge a lasting unity government that could unite the West Bank and Gaza Strip, despite more than eight years of bitter division. The West Bank economy, meanwhile, is in desperate need of foreign investment. Many backers fled after the collapse of the peace process in 2000 and have not returned. Gaza reconstruction after last summer’s 50-day war is also stuck.
Mustafa was an important advisor on most, if not all, of those portfolios. It’s unclear who can help Abbas navigate these challenges once Mustafa leaves. More importantly, it’s hard to imagine Abbas’s inner circle getting any smaller. His long history of driving out dissenters in a bid to consolidate power (he is now 10 years into a four-year term) has left him without many allies either in Ramallah or around the Arab world.
Questions are flying about Mustafa’s surprise resignation: Does he have designs on Abbas’s office? Will he remain chairman of the board at the PIF? At this point, only one thing is certain: the man most important to the Palestinian economy is abandoning ship.
But this will barely register as a story in the Middle East today, tomorrow, or any time soon. There is an ocean of reporting and analysis on the Palestinian-Israeli conflict. Vignettes of current conflict, impending conflict, looming conflict, conflict in past perspective, and even internecine conflict among politicians on the Israeli side are a dime a dozen. But there is an undeniable dearth of insight into the Palestinian political dynamic.
And yet recent history proves that what happens in the halls of power in Ramallah matters to the rest of the world. In 2013, then-Prime Minister Salaam Fayyad submitted his resignation after failing to counter a wave of pressure from Abbas and his Fatah cronies. Fayyad — also a former World Bank economist — was vehemently opposed to the Palestinian internationalization campaign at the United Nations, reportedly even breaking his hand while slamming it on a table to drive home his point. Fayyad thought it was fundamentally implausible for the PA to solicit international aid while simultaneously joining international organizations and upsetting major donors, namely, the United States. By April 2013, Fayyad had reached his breaking point and resigned. Abbas replaced one internationally respected economist with another, more loyal one.
The exit of Fayyad, who was roundly celebrated in the West as one of the Palestinians’ best chances to build a state from the ground up, received scant coverage despite the enormous consequences his resignation had on the prospects for organic reform. One notable exception was a column by Thomas Friedman — who, after all, had coined the term “Fayyadism” to describe the Palestinian’s pragmatic, technocratic state-building strategy. Since then, the PA has been in a holding pattern, with Abbas’s international recognition plan at the United Nations serving as the centerpiece for the stalled Palestinian national project. Little if any thought has gone into Fayyad’s vision for institution building, let alone engendering a viable political environment that could lead to the election of a new president.
The impact of Mustafa’s departure is yet to be determined. Similarly, whether his exit is tied to wrongdoing or a conflict within Abbas’s shrinking inner circle is not yet known. Alternatively, his resignation could be part of a long Palestinian tradition of pseudo-resignations. (Saeb Erekat, the Palestinians’ chief negotiator on peace issues, has “resigned” at three times during his tenure.) Whatever the outcome, the Palestinian leadership appears to be unraveling at a time of great uncertainty.
Photo Credit: Abbas Momani / Stringer