RAMALLAH ø The Palestinian Authority said it can no longer pay its
employees.
Officials said the PA has informed donor nations that by next month it
will no longer have money to finance basic services. This includes the
salary of about 125,000 employees.
Over the last three months, the officials said, the PA obtained loans
from local banks to pay for public sector salaries. They said banks will no
longer lend money to the PA.
On Thursday, the Palestinian Legislative Council passed a PA budget of
$1.69 billion for fiscal 2004, Middle East Newsline reported. Most of the budget, which forecasts $806
million in revenues, is meant to pay salaries.
The 2004 PA budget contains a deficit of $890 million. Finance Minister
Salam Fayyad said the budget was based on a forecast that foreign donors wou
ld relay $650 million to the PA.
But PA officials said donor nations have not honored their pledges. They
said the European Union continues to provide about $12.5 million to the PA,
but most Arab nations have reneged on their promises. The exceptions have
been Libya and Saudi Arabia.
Donor nations, particularly the United States, have complained that the
PA has failed to implement measures that would ensure transparency in
spending. Fayyad, himself, has acknowledged that he has failed to account
for hundreds of millions of dollars in revenue controlled by PA Chairman
Yasser Arafat.
