"Palestinian Party Hangover" - Palestinian premier blames cash crisis on Arab donors.

"Palestinian Party Hangover" - Palestinian premier blames cash crisis on Arab donors.(CTVNews).The Palestinian self-rule government is close to being "completely incapacitated," largely because Arab countries haven't delivered hundreds of millions of dollars in promised aid, the Palestinian prime minister said in an interview Sunday.
If allowed to continue, the Palestinian Authority's unprecedented financial crisis will quickly double the number of Palestinian poor to 50 per cent of a population of roughly 4 million, Salam Fayyad told The Associated Press.
Fayyad said the malaise is further boosting the political appeal of the Islamic militant Hamas while discrediting him and other proponents of a nonviolent path to statehood in the West Bank, Gaza Strip and east Jerusalem. Hamas seized Gaza from Fayyad's boss, Palestinian President Mahmoud Abbas, in a 2007 takeover, leaving Abbas with only the West Bank.
Fayyad said his budget deficit has widened in recent years, blaming Arab states that broke aid promises.
"The financing problem that we've had ... in the last few years is solely due to some Arab donors not fulfilling their pledge of support in accordance with Arab League resolutions," Fayyad said. European countries kept all their aid commitments and the U.S. honoured most, with the exception of $200 million held up by Congress last year, he added.
Fayyad's heftiest monthly budget item is the government payroll. The Palestinian Authority employs some 150,000 people, including civil servants and members of the security forces. About 60,000 live in Gaza and served under Abbas before the Hamas takeover, but they continue to draw salaries even though they've since been replaced by Hamas loyalists.
In recent months, the government has paid salaries in installments.
Fayyad said he managed to pay half the November salaries by getting another bank loan, using as collateral a promise by the Arab League to cover whatever money Israel might withhold in retaliation for the U.N. bid. The money from the Arab states never came, and Fayyad said he can't pay the rest of the November salaries, let alone December wages.
The Palestinian Authority already owes local banks more than $1.3 billion and can't get more loans. It also owes hundreds of millions of dollars to private suppliers, and some have stopped doing business with the government.
Fayyad said his government is on "the verge of being completely incapacitated." About 1 million Palestinians who depend on government salaries "are at a very serious threat of being pushed into a circle of poverty," he said. This would double the poverty rate, which currently stands at 25 per cent in the West Bank and Gaza, he said.
Fayyad said these dire consequences would happen in "short order," but he would not give specifics. Read the full story here.