International Donations Fuel PA's "Economic Miracle"

(Ynet News) Avi Trengo - Palestinian Prime Minister Salam Fayyad has been crowned "the Palestinian Ben-Gurion." However, the absurdity inherent in his statements regarding "Palestinian independence within two years" is clear to anyone familiar with the Palestinian economy. The Palestinians barely produce anything. Most of their GDP comes from government expenditures by the PA itself. The Palestinians receive immense sums donated by the world. Tax collection is almost unheard of, aside from the taxes collected by the Israeli government, which provides the PA with roughly $120 million monthly, comprising about 40% of the PA's budget. The situation is even more extreme in Gaza, where the PA spends 57% of its budget. Fayyad hands over salaries and allowances to 150,000 people, yet tens of thousands of them don't work, while others receive two salaries: one from Fayyad and another from Hamas. About two years ago, the World Bank demanded that Fayyad not only cut down PA salaries (no results thus far), but also that he minimize the second-highest PA budget clause: Payments aimed at covering electricity and water bills which PA residents refuse to pay (the accumulated electricity debt of Gaza residents stands at $2.7 billion). This constitutes about 8% of the PA's budget. Two years ago, Fayyad attempted to force PA residents to present proof of payment on their electricity bills before receiving government allowances. The PA's "public service sector" immediately embarked on a warning strike, and Fayyad backed down. A few months ago, Hamas stopped handing over to the Palestinian fuel authority the sums of money collected from Gaza residents who do pay for electricity. This was the reason for the latest fuel crisis in Gaza.

2010-02-08 08:05:47

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