After years of economic stagnation
Palestinian Authority tries hard to pay public workers
Authorities in the occupied West Bank claim they are struggling to pay salaries for public employees after years of economic stagnation, as surging inflation, declining donor aid, and Israel's withholding of key tax revenues constrict the PA's already weakened budget.
"The circumstances we are living under are severe, and we are in financial deficit," Prime Minister Mohammad Shtayyeh revealed to reporters this week, saying the PA has not received funding to pay salaries, which are anticipated to cost 920 million Israeli shekels ($292 million) every month.
Workers are concerned about the financial crisis, which officials and analysts have labeled as "the worst" since the PA's founding in 1993.
"We were told at first that we would not get paid at all. Then we were advised that we might be eligible for a permanent 25% salary decrease. "After that, they indicated the 25% reduction will only be for a few months," a PA public employee said on condition of anonymity to Al Jazeera.
Like economies the world over, Palestine is currently wrestling with soaring inflation stemming from supply chain snarls and shortages of raw materials as nations cast off coronavirus restrictions.
The PA’s fiscal revenues declined to their lowest levels in 20 years shortly after the start of the pandemic, which only exacerbated longstanding financial challenges.
While support from foreign donors has withered over the years, the biggest blow was dealt in 2017, when former United States President Donald Trump cut off nearly all US aid to Palestinians. Though Trump’s successor, Joe Biden, has reopened some of the funding taps, US laws now prohibit direct aid to the PA.
In November, Shtayyeh’s adviser for planning and aid coordination, Estephan Salameh, told local media the crisis could last six months before expected European Union aid worth 600 million euros ($680m) arrives in March.
A November 17 World Bank report reported the PA’s deficit is expected to reach $1.69bn by the end of the year, while donor aid is “projected to amount to $184m – 38 percent of what was received in 2020”.
“Efforts by all parties are critical to avoid a crisis as without additional financing, the PA may encounter difficulties in meeting its recurrent commitments towards the end of the year,” the report warned.
SOURCE: Al Jazeera