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Daily Israel Report

PA: Salaries Unpaid, Fayyad Blames Donors

A blow to statehood goal? PA cannot pay salaries, blames donor countries.
By Maayana Miskin
First Publish: 7/3/2011, 8:52 PM / Last Update: 7/3/2011, 9:06 PM

Flash 90

The Palestinian Authority will pay its workers only half their usual salaries for the month of June, PA Prime Minister Salam Fayyad announced Sunday. The decision not to pay full salaries was made due to the PA's monthly deficit of $30 million, he said.

Fayyad blamed the crisis on unfulfilled promises. Donor countries promised aid but did not deliver, leaving the PA with $331 million in international aid in the first half of 2011 instead of an expected $900 million.

The salary crisis may undermine PA leaders' claims that they are ready for statehood. The PA is hoping for UN approval for the unilateral creation of a new Arab state in Judea, Samaria and Gaza in September, despite leaders' refusal to negotiate with Israel.

The PA had sought $5 billion this year to help it launch a state. However, Western donor countries have largely rejected the PA's attempts to unilaterally declare a state, while many Arab countries face problems of their own with rebellions in Tunisia and Egypt and uprisings in Syria, Yemen, and Bahrain.

Fayyad said the PA has reduced its dependency on foreign aid to under one billion dollars per year. The PA formerly had a goal, expressed by Fayyad, of being self-sufficient by 2013. However, the PA remains heavily dependent on aid, and some have dismissed Fayyad's projections as “myth.”

PA workers threatened demonstrations in response to the salary slash. “We are in a serious crisis, this is intolerable,” workers said Sunday. “We believe that if the financial situation deteriorates, there will be severe unrest.”

One worker told the PA media outlet Wafa, “I am desperate. My salary is under 2,500 shekels, and to pay me just half of that is a disgrace, although I understand the Authority's situation.”