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UN Warns Palestinians are Facing Serious Cash Crisis

The U.N. Agency for Palestinian Refugees warned this week that the Palestinians are facing a serious cash crisis because aid donors have not lived up to their pledges. At the Paris Donor Conference in December 2007, the international community pledged over $7.7 billion in support of the Palestinian Reform and Development Program. Dr. Ghassan Khatib is Director of the Palestinian Government Media Center. He said that the European Union and United States had met their obligations at least financially. And he declined to mention by name those Arab states which had not.

Khatib: The International community in general has been generous with the Palestinian Authority on the financial level. However, the international community has been extremely failure [sic] on the political level, and I think the international community is trying to sort of compensate the Palestinians financially for their failure to help end the Israeli illegal occupation or to bring the Israelis to abide by international law.

On the financial level, the international community, through the different members, have pledged a certain amount of money to the Palestinian Authority.

This year, in particular, some of the donors have not been fulfilling their commitments in a regular way, which, with time, accumulated a deficit, and created a problem, a so far, not so big a problem to be able to affect the ability of the Palestinian Authority to pay salaries, but according to the Ministry of Finance, if this would continue, then it might affect the ability of the Palestinian Authority to fulfill its obligation.

We called upon the international community, particularly these states which did not fulfill its obligations to do so in order for us to continue fulfilling our obligations to our people.

Hilleary: I've read reports that you may not have funds to be able to pay salaries past September. Is this true?

Khatib: There is no effect so far of this crisis on the salary of this month. We don't know about the future. We play it by ear and month-by-month. We hope that this problem will be solved soon in order to resume and continue giving the services that we are supposed to give to our people.

Hilleary: I've heard some speculation that some states may be withholding money in order to encourage reconciliation between various different Palestinian factions.

Khatib: We don't know what are the motives [sic]. But we are in contact with the different donors in order to try to encourage them to fulfill their obligations, which they put on themselves voluntarily, of course, at the Donor's Conference. And we are hopeful that we will be able to find a way to convince them to do that.