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Abbas to Visit Saudi Arabia Amid PA’s Worst Financial Crisis

Palestinian Authority President Mahmoud Abbas is set to travel to Saudi Arabia in the next few days to rally the kingdom for money to relieve the PA’s grave financial crisis.

The PA will also send letters and official delegations to other Arab countries to seek aid. Its economic straits have prevented it from paying a portion of government employees’ salaries for the month of June. The payments are usually made by the seventh of the following month, Ma’an News reported.

Abbas’s scheduled tour to Saudi Arabia comes amid what PA Labor Minister Ahmad Majdalani called the PA’s worst economic crisis since its founding in 1994, AFP reported. The president chose Saudi Arabia as a destination because it has always been supportive of the PA, PLO-Secretary General Yasser Abed Rabbo told the Voice of Palestine radio station.

Majdalani said earlier this month that if Arab countries fail to follow through with their pledged aid money, the government would not be able to pay its salaries or debts.

Palestinian Authority Prime Minister Salam Fayyad (left) with Palestinian Authority President Mahmoud Abbas

“What is available to the Palestinian Authority at the moment in terms of funds is not enough to pay government employee salaries this month, with Ramadan approaching… It is not sufficient to pay the bills that the Palestinian Authority owes to private companies,” he said.

The International Monetary Fund recently refused an Israeli request for $1 billion in bridge loan funding for the Palestinians. The PA cannot ask the IMF for money on its own because it isn’t a state.

Israel made the request following a meeting between PA Prime Minister Salam Fayyad and Bank of Israel Governor Stanley Fischer. According to Haaretz, Fayyad told Fischer that the PA was in dire straits due to nonpayment by Arab countries of funds they had promised. The global financial crisis was, moreover, impeding any increases in aid packages from the US or Europe.

The IMF rejected Israel’s request, saying it did not want to set a precedent of non-state entities receiving loans by proxy.

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Posted by on July 11, 2012. Filed under Israeli News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.