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Why has Gulf assist to PA declined lately?

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Mar 16, 2021

The Palestinian Ministry of Finance launched March 3 official knowledge regarding the 2020 funds.

The knowledge revealed that Saudi and Arab monetary assist sharply declined, with the whole Arab assist and grants amounting to $40 million, an 84.9% lower compared with $265.5 million in 2019.

According to the figures, oil-producing international locations are the principle Arab financiers of the Palestinian funds. The Saudi help declined from $174.7 million in 2019 to $32.5 million in 2020, a lower of 81.4%. As for the remainder of the Arab help, it was divided between Qatar and Oman, with $6.51 million and $1.06 million, respectively.

After the Palestinian Authority (PA) was established in 1994, the worldwide group pledged to supply monetary help that amounted to $35.Four billion till late 2017. The European Union was one of many largest donors throughout this era, with assist amounting to $6.7 billion — i.e., 18.4% — of the whole assist supplied to the PA, adopted by the United States with $5.74 billion, or 15.7%, of the whole grants. Saudi Arabia adopted with $3.83 billion, or 10.5%. These figures have been launched by the Palestinian Economic Council for Development and Reconstruction (PECDAR) in February 2019. Most of this assist is earmarked for the Palestinian state funds and used to pay the wages of PA workers, make sure the continuity of the PA, and stop the collapse of the Palestinian financial and monetary conditions.

Mohammed Khabisa, a Palestinian economics editor for Turkey’s Anadolu Agency, instructed Al-Monitor, “The figures [relating to the 2020 state budget] show that Arab financial support, most notably the Saudi aid, as well as foreign aid, greatly dwindled.”

Khabisa added, “All Arab donors provide direct support to the PA through the state budget, except for Qatar, which [also] implements some projects away from the budget. In order for the PA to compensate for the Gulf support’s decline, it must increase taxes, improve tax collection and obtain more clearance funds collected by Israel. While the European Union and the World Bank are the only ones that continue to provide steady aid to the Palestinian budget, the French, Italian, US and German grants sharply decreased.”

Speaking to Al-Monitor on condition of anonymity, an official from the Palestinian Ministry of Finance said, “The PA is going through a deep-seated financial crisis. We contacted a number of Arab countries, particularly the Gulf countries, in order for them to resume and increase their support, because our economic and financial situations have [worsened] and the PA could collapse in case the financial crisis continues. We heard various responses from the Arab countries, some of which expressed willingness to pay but asked us to be patient. Others said they can’t increase aid since they are facing their own difficult economic crises.”

The source refused to name the countries the PA reached out to, probably to keep these contacts secret until they succeed.

The Palestinians have probably pinned hope, albeit little, on the possibility of obtaining support from the Gulf countries and the United States under the Biden administration — although such aid would be either directed to other institutions such as municipalities, which obtain decentralized support as an alternative for the PA budget, or to nongovernmental organizations and the UNRWA.

Jaafar Sadaqa, a Palestinian economist journalist, told Al-Monitor, “There are two main points that could lead to the gradual resumption of Saudi aid to the PA: first the resumption of the Israeli-Palestinian negotiations. Regarding that, the US could give the Arab and Gulf states the green light to resume aid to the Palestinians. Second is the completion of the upcoming legislative and presidential elections. In this case, foreign funds will not be pumped to the Palestinian treasury unless the elections are held — except for the 25 million euros (about $30 million) monthly European contribution to help pay the salaries of PA employees.”

Meanwhile, some Palestinians expect the international community to stop paying the salaries of PA employees and suspend humanitarian projects in the Palestinian territories if Hamas wins the upcoming elections, just like what happened after the movement’s victory in the 2006 legislative elections.

Iran, for its part, does not provide aid to the PA, as Iranian support is limited to the armed Palestinian forces, particularly to Hamas and the Islamic Jihad. The chief of Israel’s Mossad, Yossi Cohen, estimated on July 1, 2019, Iranian support at $100 million per year, which Trump’s special Mideast envoy, Jason Greenblatt, had confirmed in February 2018.

Mohammed Abu Jayab, editor-in-chief of the Gazan weekly newspaper Al-Eqtesadia, instructed Al-Monitor, “The Gulf support to the PA, particularly the Saudi one, has witnessed an unprecedented decline in the past three years. While some countries have even ceased such support, such as the UAE, others channeled it away from the PA and directed it to UN and civil organizations operating in Palestine. In 2020, Saudi Arabia announced a generous donation of $150 million to the support program for Jerusalem (carried out by PECDAR) and another of $50 million to the UNRWA. The Saudi aid to the PA amounted to nearly $6.5 billion between 2018-2000, including $250 million for the UNRWA.”

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