PA 'structural deficiency' behind finance crisis
Published Tuesday 10/09/2013 (updated) 11/09/2013 17:50
BETHLEHEM (Ma’an) – As Palestinian Authority’s officials complain about an imminent serious financial crisis, donor countries have responded positively delivering millions of dollars to the PA in the past few days.
Both European and Arab countries have channeled millions to support the Palestinian Authority’s treasury. Saudi Arabia announced $200 million, while the UK donated $11.6 million. The World Bank transferred $72.2 million, the Italian government paid $60 million and only Monday the European Union proposed 60 million euros to support the PA.
Interim prime minister Rami Hamdallah announced earlier in September that his government would be facing a serious financial crisis in September and October. He said his finance ministry would need $500 million to be able to pay civil servants’ wages for these two months.
A spokesman of the government, Eyhab Bseiso, told Ma’an Tuesday that the support the PA received recently from Arab and European donor countries would minimize the expected crisis. He highlighted that Hamdallah would visit more countries to try and recruit financial support.
“Financial support is dependent on political stability in the region,” he said.
Former minister of planning Samir Abdullah believes the ongoing financial crisis is a result of “structural deficiency” in the Palestinian Authority’s economy.
This economy, he says, is subordinate to money from donor countries, and on the other hand Israel controls the PA’s resources in 60 percent of the West Bank. Gaza’ resources, he added, are already missing.
Abdullah says the PA has been suffering from financial crises since it was established in 1994. The PA, he added, would not have been able to pay its monthly bills without the donor countries’ money.
“There is a real deficiency and we have to invent new ways to levy taxes such as a compulsory tax on land registry,” he said.
The Palestinian Authority has a three-year plan to develop the national economy, according to President Mahmoud Abbas’ adviser on economic affairs Monday.
Mohammad Mustafa said the plan included projects to build electricity generators and to use natural resources, water and gas in particular, to try and reduce the cost of industrial production.