MIDDLE EAST:PALESTINIAN PRIME minister Salam Fayyad has asked the World Bank for a letter to help him secure emergency funding to pay government salaries by the end of the month, writes Michael Jansen.
The letter would be used to assure private banks that more than $80 million (€51.34 million) deposited by Kuwait in a World Bank trust fund would be cleared by the bank and reach the Palestinian Authority by mid-August.
The Palestinian Economic Council for Development and Reconstruction said only $900 million of the $7.7 billion promised during last December's Paris conference had been received, although $3 billion was expected during 2008. Furthermore, most of the money received was earmarked for specific projects.
Consequently, the authority's deficit has swollen from $1.6 billion to $2 billion.
Mr Fayyad has asked donors to convert funds for projects into budgetary support and has expressed concern that Arab donors have failed to deliver.
Several donors have said financial assistance is conditional on reconciliation between the Fatah-dominated authority in the West Bank and Hamas in Gaza.
Unconvinced that Mr Fayyad has eliminated corruption, others demand greater transparency and accountability.
Any delay of payments to 150,000 civil servants and police would undermine the authority's credibility and embarrass Mr Fayyad's government, formed last July after Hamas took control of the Gaza Strip.
An official warned: "We will lose the support of the Palestinian public if we stop paying salaries."
