Donor nations were under new pressure Wednesday to honour a $1 billion aid pledge to the Palestinians, as the prime minister warned that a fiscal crisis was threatening the government.
Salam Fayyad called for a “greater effort” to help the Palestinian Authority bridge a budget gap, stressing that its ability to provide services to its people and “continue to function… has been impaired already.”
Norwegian Foreign Minister Jonas Gahr Store, who chairs the so-called Ad Hoc Liaison Committee of donor nations, called on countries to redouble their efforts and urged Israel to lift restrictions on the Palestinian economy.
A summary issued by the chairman after the committee meeting called on countries to ensure they provide the $1 billion (760 million euros) the Palestinians need for 2012.
The text said the crisis threatens to become protracted due to a decline in donor assistance but that nations recognised that the Palestinian Authority cannot slash its deficit on its own.
The International Monetary Fund had urged donor countries Saturday to honour their promises to the Palestinian Authority, warning that its economy was entering a “difficult phase” and could further deteriorate.
In a report prepared for the donors’ meeting, the IMF estimated a financing gap of about $500 million.
A drop in liquid assets has worsened due to a reduction in aid from Western and Gulf countries, as well as trade and movement restrictions imposed by Israel, it said.
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