Khaled Abu Toameh
The Jerusalem Post
July 30, 2008 - 8:00pm
http://www.jpost.com/servlet/Satellite?pagename=JPost/JPArticle/ShowFull&cid=121...


Palestinian Authority Prime Minister Salaam Fayad has asked the World Bank for emergency funding so that he can pay salaries to PA employees, said PA officials in Ramallah on Wednesday.

The request underscores the severity of the financial crisis in the PA.

Earlier this week, PA officials had told The Jerusalem Post that their government was on the "verge of bankruptcy" because most donor countries, particularly the Arabs, had failed to live up to promises of funding for the Palestinians.

The officials said that because of the financial crisis, the PA would not be able to pay July salaries to more than 150,000 employees.

According to the officials, Fayad appealed to the World Bank's trust fund to help the PA obtain a short-term bank loan.

Noting that the PA was suffering from a $2 billion deficit in its budget, the officials said the World Bank still hadn't replied to Fayad's request.

"We hope they will provide us with the assurances required to take a loan from some banks," said one official.

The Palestinian Economic Council for Development and Reconstruction [PECDAR] said in a report this week that the PA had received only $900 million of the $7.7b. promised during the December 2007 Paris Donors' Conference for supporting Palestinians. The money was promised to the PA over a period of three years by nearly 90 countries and international organizations during that conference.

According to PECDAR, the PA was supposed to receive up to $3b. of it during 2008. However, PA officials complained that the donors had so far paid less than 35 percent of the promised sum.

The officials also said they were particularly disappointed with the majority of the Arab countries for failing to meet their financial commitments toward the Palestinians.

"Most of the Arab countries are now setting conditions for providing us with financial aid," the PA officials said. "Some are saying that they will give us the money only after we end our differences with Hamas, while others are suddenly talking about the need for reforms and transparency in the Palestinian Authority."

The officials pointed out that the Arab countries have given the PA this year only about 15% of what they promised.
US State Department Spokesman Sean McCormack said Tuesday that Washington was aware of the financial crisis in the PA.

"It has been clear for some time that the Palestinian Authority faced a serious and imminent budget crisis," he told reporters. "This is why we have been working urgently with the Palestinian Authority and our partners in the international community, in particular with regional partners committed to peace, to do everything possible to support the Palestinian Authority and the Palestinian people."

He added that the US remains the largest single state donor to the Palestinian Authority. "We have provided $562m. in total assistance in 2008, surpassing our pledged level of $555m.," he revealed.




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