Saudi gives $30.8m to cash-strapped Palestine

Saudi Arabia sent $30.8m to the Palestinian Authority to help bridge a budget gap that forced the cutting of salaries in half, said Jamal Shobaki, the Palestinian envoy to the kingdom.

“The Saudis informed us that they transferred the money,” Shobaki said in a phone interview from Riyadh on Tuesday.

The move comes three weeks after Palestinian Prime Minister Salam Fayyad said the authority was in a financial crisis, and singled out Arab countries as he called on international donors to fulfill their commitments.

By the start of July, the authority had received $330m of the $971m in aid pledged for 2011, Fayyad said at a July 3 press conference in the West Bank city of Ramallah. About a quarter of the authority’s $3.7bn budget comes from foreign aid.

Reduced salaries were sent July 6 to about 151,000 people on the Palestinian Authority payroll, according to Accountant- General Yousef Zummor.

Fayyad has been working to build government institutions as the Palestinian Authority prepares to ask the United Nations in September to recognize Palestine as an independent state, a move opposed by Israel and the US.

Oman, Algeria and the United Arab Emirates were the only Arab countries that had paid funds pledged for this year, Fayyad said July 3. He said the US and European Union have been making regular contributions.

The World Bank said in an April report that the Palestinian Authority had increased bank borrowing to fund development projects for which designated aid hadn’t been received, and that arrears were accumulating at an unsustainable rate, close to the PA’s borrowing limits.