Arab states agree on $100 million in monthly aid for Palestinian Authority

Published on December 10, 2012 by   ·   No Comments

The ‘financial safety net’ is meant to help President Abbas’s government cope with an economic crisis after the UN granted de facto statehood to Palestine.

Arab states agreed to provide the Palestinian Authority with a $100 million monthly “financial safety net” to help President Mahmoud Abbas’s government cope with an economic crisis after the United Nations granted de facto statehood to Palestine.

In response to the vote, the Netanyahu government gave the go ahead to build some 3,000 new housing units in East Jerusalem and the West Bank , and also said he will advance long-frozen plans for the E-1 corridor, which covers an area that links the city of Jerusalem with the settlement of Ma’ale Adumim.

Also in following the vote, Israel decided to confiscate NIS 460 million in tax revenues collected for the Palestinian Authority during the month of November, and use it to offset the PA’s debt to Israel’s Electric Corporation.

In a statement issued on Sunday after a meeting in Doha, Arab foreign ministers called for the “immediate implementation” of a resolution passed at an Arab summit in Baghdad in March, which called for the provision of a $100 million monthly safety net.

But the statement did not give details of how the money would be paid or who would pay.

Israel and the United States opposed the UN General Assembly’s upgrade of the Palestinians’ status to “non-member state,” saying Abbas should instead resume peace talks that collapsed in 2010 over Israeli settlement-building.

The World Bank and the International Monetary Fund said in September that a growing crisis in the Palestinian economy will worsen unless foreign funding increases and Israel eases long-standing curbs on development.

In a separate report, the World Bank also forecast a $1.5 billion Palestinian budget deficit for 2012, with donor funds expected to cover only $1.14 billion of this shortfall.

Last Thursday, the Palestinian cabinet said at a meeting in the West Bank city of Ramallah that $240 million were needed every month to meet demands arising from the Israeli decision to stop customs revenues transfers and the failure of donors to transfer previously pledged funds.

The Palestinian Authority exercises limited self-rule in the West Bank and receives most of its aid from the United States, the European Union and Arab states.

But over the past several years there has been a shortfall in aid coming from Arab states resulting in the PA being unable to pay salaries to its 153,000 civil servants on time on several occasions. The administration has yet to pay November salaries following Israel’s decision to withhold money transfers.

The Arab ministers also called for convening a donors conference to discuss ways to support the Palestinian people in the West Bank and discuss reconstruction in the Gaza Strip.

Qatar’s ruler, Sheikh Hamad bin Khalifa al-Thani, pledged $400 million to help develop Gaza during a visit there in October. But recent fighting between Gaza’s Hamas rulers and Israel has caused further destruction to the territory, requiring more funds for reconstruction.


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