S. Arabia, Qatar to give PA funds

$33 million in aid may not be sufficient to pay January salaries for gov't workers.

February 1, 2006 20:07
2 minute read.


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Saudi Arabia and Qatar promised $33 million in quick aid to ease a severe budget crisis in the Palestinian Authority in the wake of the Hamas election victory, officials said Wednesday, but acknowledged they may not be able to pay their workers this week on schedule. With Palestinian coffers already empty, Israel stopped its monthly transfer of tens of millions of dollars of tax money, while Western nations weigh whether to continue supporting the Palestinian Authority after Hamas, with its history of suicide bombings and rejection of Israel, forms a government. Israel's decision Wednesday to hold up $45 million in taxes and duties it collected for the Palestinians in January was a body blow that could cause unrest in the West Bank and Gaza, even before Hamas is chosen to form a government. The 137,000 people on the Palestinian Authority payroll, including almost 60,000 security officers, are supposed to receive their salaries on Thursday. Even with promises of new aid, a Palestinian official said the checks would not be ready until Monday at the earliest. Even a week's delay could mean hardship for large numbers of Palestinians. The Palestinian economy is in tatters after five years of violence with Israel. Unemployment is set at 22 percent, and even the meager government salaries support extended families in many cases. Failure to pay the January salaries could pose the most difficult test yet for Hamas, which has resisted international demands to recognize Israel, disarm and renounce violence. Israeli Foreign Ministry spokesman Mark Regev said Israel was "not out of sync" with the rest of the world in holding up the transfer. He said in the past, when Israel suspected the Palestinian Authority was using funds to support violence, Israel put its money into escrow accounts, releasing it later. He said that would be the practice this time, as well. Deputy Finance Minister Jihad al-Wazir, said contacts are still in progress with the Israelis, and he was hopeful the funds could be transferred in the coming days. He said there are also contacts with world donors aimed at maintaining levels of foreign aid. Economics Minister Mazen Sinokrot said Israel is in violation of interim peace accords, which require it to transfer the customs and taxes. "The Israeli side is not permitted legally to freeze the money of the Palestinian Authority, which is the money of the Palestinian people," he said, adding that Israel owes $53 million, not $45 million. Regev said Israel and the world cannot be expected to "finance people who believe that the solution is the destruction of Israel by suicide bombings and violent jihad." Western donors, led by the US and EU, funnel about $900 million to the Palestinians each year, most of it designated for reconstruction projects in the impoverished Gaza Strip and West Bank. They are reconsidering that funding, demanding that Hamas recognize Israel and renounce violence. In all, the Palestinian Authority needs some $116 million every month to cover the payroll. It has repeatedly borrowed from banks and received additional support from donor countries. However, the Palestinian Cabinet secretary, Samir Hleileh, said it appears unlikely the banks would lend to the government in times of uncertainty.

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