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Saudis Offer More Money to Cash-Strapped PA

Saudi Arabia will contribute $20 million each month to the Palestinian Authority, a Saudi official says.
By Elad Benari
First Publish: 1/20/2013, 6:15 AM

Money (illustration)
Money (illustration)
Flash 90

Saudi Arabia will contribute $20 million each month to the Palestinian Authority, a Saudi official said Saturday, according to a report in the Bethlehem-based Ma’an news agency.

The Kingdom's envoy to the Arab League, Ahmad Qattan, told the Saudi daily al-Wafd newspaper that the country had originally decided to give the PA $14 million monthly, but has now raised the contributions.

Last month, the Arab League states pledged to pay the PA $100 million a month in a “safety net”.

Most members have still to pay, but PA Prime Minister Salam Fayyad said Thursday he sees signs the financial crisis will be solved next month, Ma’an reported.

Fayyad, who has warned that the PA may soon fail financially and cease to exist because of its financial crisis, recently accused Arab states of evading their financial commitments to the PA.

The latest Saudi Arabia contribution comes after a previous $100 million contribution to the PA earlier this month, which the government used to make partial payments to its employees.

Civil servants have carried out periodic strike action over months of delayed salary payments.

PA Chairman Mahmoud Abbas has blamed Israel for being responsible for the PA’s financial crisis, because it has been withholding the tax revenues it collects for the PA.

Usually, Israel transfers about $120 million in customs duties on goods destined for PA markets that transit through Israeli ports, and which constitute a large percentage of the PA budget. Israel decided to withhold the taxes for several months in a direct response to Abbas's unilateral move at the United Nations where he achieved a non-member observer state to the PA.

While blaming Israel for his financial woes, Abbas continues to spend six percent of the PA’s annual budget to pay $4.5 million a month to jailed terrorists and another $6.5 million to their families.