Palestinian civil servants put on half pay: Fayyad

Date: 7/3/2011

By Abbas Momani | AFP – Sun, Jul 3, 2011

Palestinian Authority staff will only receive half their salaries this month as donors continue to deliver less money than pledged, the Palestinian prime minister said on Sunday.

Salam Fayyad warned at a press conference in the West Bank town of Ramallah that the Palestinian Authority (PA) was dealing with a "financial crisis" because promised donor funds were behind schedule.

"The government has decided to pay employees half their salary due to the financial crisis that the Palestinian Authority is experiencing because of the failure of donors, including our Arab brothers, to fulfil their pledges," he said.

He said employees would receive between 1,400 shekels ($413) and 4,500 shekels ($1,330) when monthly salaries are paid for July, but warned that they would only receive the remainder "if the promised funds arrive."

"If this crisis continues, the government will have to take additional austerity measures," he added.

Fayyad said donors' failure to deliver pledged funding had left the PA with a monthly shortfall of $30 million, adding that the aid that has been received only covers about a third of the government's costs.

He stressed that the PA's financial situation was becoming increasingly precarious, and efforts to seek private financing were running aground.

"We tried to deal with the financial crisis by borrowing from banks and we were able to alleviate the problem somewhat by taking out loans, but the deficit that is accumulating from month to month has gotten to the point that is can no longer be addressed with bank loans," Fayyad warned.

In late May, Fayyad already said the PA was not receiving aid quickly enough to meet its spending needs and pointed the finger in particular at Arab nations, though without naming them.

The PA is largely reliant on foreign donors to make up its yearly budget. It also receives tax and tariff revenue that is collected by Israel and delivered periodically.

In May, Israel halted the payments temporarily in response to a unity deal between the Fatah party, which dominates the PA, and the rival Islamist movement Hamas, which runs Gaza.

The move, which violated international accords signed by Israel, provoked international criticism and the Jewish state agreed shortly afterwards to resume the fund transfers.


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