PA warns of budget cuts after sharp fall in foreign funding

By January 06 2017, 14:08 Latest News No Comments

palestinian-authorityThe Palestinian Authority’s (PA) Prime Minister warned this week of likely austerity measures to be imposed to its budget after a sharp reduction in overseas funding.

PA Prime Minister Rami Hamdallah told Al-Quds newspaper that the PA had only received half of its expected foreign aid: “we had expected to get $1.2bn (£978m) in [external] support and aid but we have only received $640m (£521m) so far”.

The PA cabinet said in a statement that it expects to run a budget deficit in 2017 of £863 million, approaching 15% of gross domestic product. The statement further said that it expects the shortfall in foreign funding to amount to £623 million in 2017 and that “such a decline compels us to adopt a austerity in all fields”.

Reuters claim that Saudi Arabia, Turkey, and United Arab Emirates in particular, have cut back their contributions to the PA in recent months. Saudi Arabia, who in the past contributed £16 million each month to the PA, reportedly stopped making its payments last April in order to apply pressure on PA President Mahmoud Abbas to implement political changes.

The European Union and U.S. have also recently reduced their direct budgetary support to the PA, opting instead to fund specific development projects.

In December, the UK Government announced that it will implement key changes to its funding of the Palestinian Authority, as part of its ongoing examination into aid to the Palestinians.

DfID announced that it is redirecting aid to “focus solely on vital health and education services”, with the assurance that funding will “only go towards the salaries of health and education public servants on a vetted list”.

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