Tuesday, January 31, 2006

Palestinians fret about threatened aid cut off


Saleh Billo, a father of five who teaches at a Palestinian Authority school, is not sure where his next pay cheque will come from.

"If my salary stops then I will have a hard time buying food for my children," said Billo, one of 140,000 Palestinian Authority employees waiting anxiously to see whether the United States and the European Union will slash aid in response to last week's election victory by Hamas.

"I don't know what I will do. It will be disastrous for us," Billo, 48, told Reuters.

The Palestinian Authority is the biggest single employer in the West Bank and the Gaza Strip. But it is nearly bankrupt and highly dependent on foreign aid to stay afloat.

Last year, it received 500 million euros ($612 million) from the European Union and it was expecting a similar amount this year, as well as over $200 million from the United States.

Israel also transfers about $500 million annually of taxes it collects on behalf of the Palestinian Authority.

But that money could soon dry up.

Israeli officials said on Tuesday that tax payments were likely to be frozen following the election victory of Hamas, which is sworn to Israel's destruction.

On Monday, the United States and other major powers said Hamas must reject violence and recognise the state of Israel or risk losing vital aid when it forms a new Palestinian government.
Hamas, which has killed hundreds of Israelis in a suicide bombing campaign since a Palestinian uprising began in 2000, has so far rejected international threats to cut off aid as "blackmail".

In a bid to keep aid flowing, Hamas leaders have suggested they might not have representatives in the government but rather put unaffiliated technocrats in the cabinet.


Crunch time for Palestinian Authority employees, including more than 60,000 security men, will come on Wednesday when Israel is due to transfer about $55 million in taxes to the Authority.
If the transfer does not go ahead then the Palestinian Authority will probably not have enough money to pay salaries.

Palestinian Minister of Economic Affairs Mazen Sonnoqrot said withholding the money would be "irresponsible and grave".

"This is a message to our employees telling them 'you should feel economically insecure'," he said.

The international community does not want to assist a government led by Hamas -- which appears on the U.S. and EU list of terror groups.

But the quandary for the international community is that failure to send aid to the Palestinian Authority could cause a collapse of the local economy, resulting in chaos.

"If I get to the point where I can't feed my children then I might join a gang of brigands," said Abu Awad, a security man with two children from the West Bank city of Jenin.