Donor countries urge Israel to bolster support for Palestinian Authority

Monday, September 24, 2012
Norwegian Foreign Minister Espen Barth Eide
Washington: Donor countries to the Palestinian Authority met Sunday on the sidelines of the U.N. General Assembly and urged Israel to lift some of its restrictions on economic activity in Palestinian areas in a bid to help alleviate a growing Palestinian financial crisis.

Norway's foreign minister Espen Barth Eide, who chaired the meeting, said the Palestinians' economic situation "is dire and is getting worse".

The Palestinian Authority has implemented austerity measures that have been met with anger by a frustrated public facing rising fuel and food prices and staggering unemployment.

Last week, the World Bank and the International Monetary Fund issued a report that says the Palestinian financial crisis will continue to worsen unless foreign funding increases and Israel eases restrictions on economic activity.  The two agencies say the Palestinian Authority faces a shortfall of about $400 million this year.

Palestinian Authority however presented a report to nations providing it with financial assistance that claims the two-state solution is in jeopardy because the current stagnant diplomacy is “unsustainable”.

Israel circulated a report of its own highlighting what it argues are tangible steps aimed at shoring up the fragile Palestinian economy. 

Nabeel Kassis said the authority needs money to function to prepare for statehood, noting that donors who pledged 300 million US dollars (£185 million) have not paid up.

He also urged the international community to go beyond expressions of support and take action to create "the political horizon" to quickly end the decades-old Israeli-Palestinian conflict.

Kassis spoke after a meeting of 27 donor nations, global financial institutions and representatives of the Quartet of Mid East peace mediators - the UN, US, European Union and Russia.

Israel’s deputy director-general for economic affairs, Irit Ben-Abba, said her government is very concerned about the situation and that it has taken steps to alleviate it, including releasing about $60 million to the Palestinian Authority last week. 

The money is an advance payment of tax revenues. She said Israel has also arranged for the transfer of goods and allowed projects to be implemented in Area C that will generate more income for the Palestinians.
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