As donations dry up, PA forced to cut June paychecks

Civil employees face halved salaries, to be deposited in bank account later this week; PM Fayyad blames donor countries for crisis.

By KHALED ABU TOAMEH
salam fayyad_311 reuters (photo credit: REUTERS/Abed Omar Qusini)
salam fayyad_311 reuters
(photo credit: REUTERS/Abed Omar Qusini)
Facing financial difficulties, the Palestinian Authority will pay only half salaries to its civil servants for June, PA Prime Minister Salam Fayyad announced on Sunday.
The half salaries will be deposited into the employees’ bank accounts on Wednesday.
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Fayyad attributed the crisis to failure of donor countries to meet their financial obligations to the Palestinians.
He noted his government has nevertheless succeeded in reducing its reliance on international aid to less than one billion dollars a year.
In the past, he said, the PA government used to get nearly two billion dollars a year from the international community.
Fayyad said the PA was now conducting consultations with Palestinian banks to persuade them not to collect full loan payments from civil servants.
He said the PA government preferred to pay half salaries than postpone the payments entirely.
“We’ve reached a point where we can no longer delay the salaries or take loans from the banks,” Fayyad said.
“That’s why we decided to pay half salaries with the hope that the employees would display understanding.”
Fayyad said the main reason behind the financial crisis in the PA was failure of the international community to provide funds.
He said that last year the PA’s deficit reached $100 million.
Since the beginning of this year, the deficit has reached $30 million each month, he said.
Fayyad said international aid to the PA has dropped by nearly one-third.
In the last month, the PA received $331 million out of $900 million that it was expecting from the international community, he said, adding this does not bode well for the second half of the year for the Palestinians.
He called on donor countries to quickly provide the needed funds to help the PA.