Last updated: 26 July, 2011

Palestinian premier Fayyad to address Arab League

Palestinian premier Salam Fayyad will urge Arab nations to deliver pledged aid at a meeting of the Arab League on Tuesday to discuss the Palestinian Authority’s financial crisis.

Palestinian foreign minister Riyad al-Maliki told AFP that the meeting at the Arab League’s Cairo headquarters had been convened at the request of president Mahmud Abbas.

Abbas had called Arab League chief Nabil al-Arabi on Monday night to request the meeting as the PA faces the possibility of being unable to pay the salaries of its employees, Maliki said.

“The importance of the meeting is that it has become urgent that the Arab countries meet their financial obligations, particularly given the looming possibility that the Palestinian Authority will be unable to pay salaries for this current month and the next one, which is Ramadan,” he said.

Abbas is dispatching Fayyad to present the meeting with details of the funding crisis that is crippling the West Bank government — largely because pledged aid has not materialised, officials say.

Earlier this month, Fayyad said PA staff would only receive half-pay until the promised funds arrived.

“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.

“If this crisis continues, the government will have to take additional austerity measures,” he said, warning that without receipt of the pledged aid, employees would continue to receive half-pay.

The donors’ failure to deliver pledged funding had left the PA with a monthly shortfall of $30 million, Fayyad said adding that the aid received so far only covered around a third of the government’s costs.

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

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.