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PA Asks the World: Help Our Failing Economy

The Palestinian Authority has urged the world to step up financial aid and press Israel to allow economic development.
By Elad Benari
First Publish: 3/19/2013, 5:46 AM

Money (illustration)
Money (illustration)
Flash 90

The Palestinian Authority has urged the world to step up financial aid and press Israel to allow economic development, over fears of "political collapse", AFP reported.

"We call on the international community to... pressure the government of Israel to release our revenues and to provide the financial support required to maintain basic functions and services," said a Palestinian Authority report seen by the news agency on Monday.

"The recent confiscation of Palestinian-owned revenues by Israel comes on top of an already severe fiscal crisis that was caused by a large shortfall of external support," it added.

The report was released ahead of a Tuesday meeting in Brussels of international donors. On January 30, after PA Arabs rioted against Israeli security forces throughout Judea and Samaria, Prime Minister Binyamin Netanyahu instructed Israeli authorities to transfer the PA its tax revenues for January, "so that they won't have an excuse not to enforce calm on the ground."

The tax revenues were frozen last year after the entity unilaterally went to the United Nations and achieved the status of a non-member observer state, directly violating the Oslo Accords.

The report urged "international partners, particularly those within the Arab region, to consider the implications of the current fiscal crisis and a possible slide into institutional and political collapse" for the Palestinian Authority.

"A prosperous, sovereign and independent Palestine requires international support to allow.... development in Area C,", the report added, according to AFP.

It underlined the importance of Area C, which is under full Israeli control according to the Oslo Accords, as "the backbone of the Palestinian economy," saying agricultural production therein could yield an additional $2.25 billion of revenue per year.

The report demanded that Israel grant PA Arabs immediate access to all roads in Area C, as well as that Israel remove all checkpoints in the region to allow freedom of movement.

Last week, the International Monetary Fund (IMF) called on Israel and the PA to help support the economy of Gaza and the PA-assigned areas of Judea and Samaria, where growth has been slowing and unemployment is rising.

“The economy is hobbled by persistent restrictions and increasing political uncertainty,” IMF staff said.

“Urgent actions are needed -- by the Palestinian Authority, by the government of Israel and by donors -- to stabilize the fiscal position and rekindle economic growth over time,” said the IMF.

PA Prime Minister Salam Fayyad has several times warned the entity may soon fail financially and cease to exist because of its financial crisis, considered to be its worse since its founding.

In December the Arab League states pledged to pay the PA $100 million a month in a “safety net”. Saudi Arabia has indicated that it will contribute $20 million each month to the PA.

Meanwhile, in a separate report to donors also released on Monday, the office of UN Special Coordinator for the Middle East Peace Process Robert Serry said Israel must ease financial restrictions on the Palestinian Authority.

"Israel should refrain from withholding and/or delaying the transfer of clearance revenue owed to the PA as well as from using it to offset Palestinian utility bills," he said, according to AFP.

The UN report also warned that "Palestinian state-building achievement was at increased risk and the PA was facing ever greater political and financial pressure," urging Israel to "ease Palestinian access to Area C."