Palestinians face 2001 budget deficit of $371 million

Published April 4th, 2001 - 02:00 GMT

The cash-strapped Palestinian Authority, suffering almost daily Israeli shelling and a choking economic blockade, is facing a yawning deficit of $371 million for its 2001 budget, according to a draft presented to parliament Wednesday, April 4. 


Revenue was marked at $758 million against spending of $1.129 billion, according to the draft, making for a deficit of around 33 percent. 


The parliament is to vote through a video-conference link between 28 MPs meeting in Ramallah and 25 in Gaza City, because of Israeli travel restrictions, with others will vote by telephone, e-mail or fax. 


The Israeli blockade prevents more than 100,000 Palestinian from working at their jobs in Israel and curtails the ability of the three million Palestinians in the West Bank and Gaza Strip to move between Arab-run areas. 


Security spending by Yasser Arafat's Palestinian Authority, whose people have been staging an uprising against Israeli occupation for the past six months, was set at 30.49 percent, compared with 17.07 percent for education and 8.4 percent for health. The budget also set aside 7.79 percent for Arafat's presidential office, 5.42 percent for social affairs and 30.83 percent for ministries and institutions. 


The budget draft, obtained by AFP, said more than 60 percent of the spending would go on salaries. Budget committee chief Dawud Al-Zir urged parliament to approve the bill saying, "it is not time to refuse it. We need to get out of this economic crisis."  


Palestinian officials accuse Israel of withholding $400 million in tax revenues and customs duties that it collects on behalf of the Palestinian Authority under economic accords. 


The United Nations has estimated that the Palestinian economy is losing around $11 million a day as a result of the blockade imposed since the start of the uprising in September, while about one million people are living below the poverty line. 


The deficit for 2001 is more than double that for the previous year, which totaled $155 million. 


The director general of the finance ministry in the West Bank, Sami Ramlawi, told AFP in February that the Palestinian Authority was "on the verge of bankruptcy." It needs around $44 million a month to pay its bloated 100,000-strong bureaucracy. 


An Arab summit in Amman last month pledged to provide financial aid to support the uprising and help the authority balance its budget and pay salaries. This funding was not included in the draft budget, which was presented to parliament before the summit. — (AFP, Ramallah) 


© Agence France Presse 2001

© 2001 Mena Report (

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