Palestinian Government Blames Donor Shortfall for Wage Cuts

Posted July 4th, 2011 at 2:55 am (UTC-5)
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The Palestinian Authority says it can only pay its employees half their salary this month, as donors have failed to deliver on their pledges of financial aid.

Palestinian Authority Prime Minister Salam Fayyad said Sunday the government has received only $330 million of the $971 million pledged for this year. He said the gap has created a monthly budget deficit of $30 million, which the government can no longer cover through bank loans.

Fayyad said countries in the region are responsible for the drop-off in funding, including the Palestinians' “Arab brothers.”

The Palestinian government relies on foreign donors to help make up its yearly budget. It also receives tax and customs revenue, which Israel collects on its behalf.

Israel suspended those payments for two weeks in May after rival Palestinian factions Fatah and Hamas signed a unity deal.

The Israeli government froze some $86 million in payments out of fears the money could fall into the hands of Hamas militants. The decision was widely criticized internationally, and Israel resumed the payments.