Cash-strapped Ramallah to receive $100 million aid from Saudis

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Palestinian President Mahmoud Abbas (L) meets with King Abdullah bin Abdul Aziz of Saudi Arabia on 4 May, 2010 in Riyadh, Saudi Arabia. Photo – PPO/Getty Images

Palestinian prime minister’s office announced on Sunday his government will receive $100 million from Saudi Arabia to help alleviate Ramallah’s stinging budget crunch.

Palestinian officials in Occupied West Bank welcomed the news as salaries for public sector employees have yet to be paid in full this month with festive month of Ramadan less than a week away.

The Saudi transfer, described by Palestinian officials as imminent, will partially help the Authority’s (PA) to meet some $300 million in expenditures this month. Officials in Ramallah are seeking the support of other countries as well to bridge the budget deficit estimated at over $1 billion for 2012.

“This $100 million is important and significant because it’s coming from a leading Arab state, and this hopefully can be an example for other countries to follow,” Ghassan Khatib, a government spokesman, told Reuters.

“We will remain in need of external funding. Whenever it is affected, then we will be in crisis,” he added.

The PA heavily depends on foreign aid to pay its bills as it struggles from crippling Israeli financial and trade restrictions. Tel Aviv routinely blocks tax payments to authorities in Ramallah as a way to impose its orders on the nascent Palestinian government. It has received just under $750 million out of the promised $1.1 billion in donor funds in 2011.

Many global donors cite a global financial downturn, a freeze in Israeli-managed customs duty and an aid freeze by the United States following Palestinians’ abortive bid for statehood at the United Nations last fall as reasons for the current crunch in Palestinian exchequer.

“This generosity added to the track record of financial and political support by the Kingdom, represented by the custodian of the Two Holy Shrines (King Abdullah),” Palestinian Prime Minister Salam Fayyad said in a statement on Sunday.

“This support will have a deep impact in deepening the steadfastness of the Palestinian people,” he added.

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