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PA Begs Arab World to Keep It Alive

PA Prime Minister Fayaad appealed to the Arab world to replace tax revenues Israel is using to pay off PA debts
By Tzvi Ben Gedalyahu
First Publish: 12/17/2012, 7:46 AM

Salam Fayyad
Salam Fayyad
AFP Photo

Palestinian Authority Prime Minister Salam Fayyad PA appealed to the Arab world Sunday night to provide a “safety net” and replace tax revenues Israel collected, which Israel is using to pay off PA debts for electricity supplied by Israel.

He urged Arab League nations to make good on pledges of $100 million a month, reiterating years-old warnings that his government was facing a "dangerous" financial crisis.

"I have nothing left to do but to urge our Arab brothers to activate this net, because until this point there has been no movement to deliver the $100 million," Fayyad told reporters at a briefing in his Ramallah office.

"If this safety net is not activated quickly, I'll call for an emergency Arab summit to discuss the financial situation because it's a dangerous situation."

The Palestinian government in Judea and Samaria has been mired for months in a financial crisis that has left it regularly unable to pay its employees.

The crisis has only worsened with Israel's announcement that it would halt the transfer of tax and tariff revenues it collects on behalf of the Palestinians after their successful bid to gain upgraded United Nations status.

Foreign media omitted in their reports that Israel is using the money to pay off part of a $700 million debt to Israel Electric Corp.

Earlier this month, at a meeting in Doha, Arab representatives agreed to activate the network in response to Israel's measures, but Fayyad said the Palestinians had yet to see the additional funds, which he warned would only plug part of the gap in his budget.

The Palestinian Authority for years has been totally dependent on foreign aid, primarily from the European Union, and a recent World Bank report stated that its financial instability would not allow it to function as an independent country.

The PA itself has engineered growth by bureaucratic expansion but without creating a diverse domestic economy that can stimulate real growth, according to the World Bank.