RAMALLAH, West Bank, (Reuters) – The Palestinian Authority expects Saudi Arabia, Qatar and UAE to provide at least $33 million in emergency funding as early as Thursday to help pay Palestinian employees after Israel halted tax payments.
“We expect that employees can withdraw salaries next week,” Jihad al-Wazir, the acting Palestinian Minister of Finance, told Reuters.
Israel froze automatic monthly tax payments to the cash-strapped Palestinian Authority on Wednesday, one week after the election victory of the Islamic militant group Hamas. It had been scheduled to transfer $55 million on Feb. 1.
The United States has since urged Israel to keep up the payments, at least until Hamas formally enters the government. Israel has not ruled out restarting the payments after completing a policy review ordered by interim Prime Minister Ehud Olmert.
Wazir said Saudi Arabia and Qatar were expected to provide emergency funding on Thursday. The Saudi contribution was expected to top $20 million. Qatar was expected to provide more than $13 million, Wazir said. He said UAE would also make a contribution, but he did not provide a figure.
Customs revenue collected by Israel on behalf of the Palestinians is the main source of funding for the governing authority’s budget. The money, transferred on the first of each month, is used to pay an estimated 140,000 Palestinian government workers.
Hamas has urged foreign donors to maintain aid but says it could still find other sources of funding in the Arab world. It has sent a delegation on a tour of Arab countries to urge them to keep the money flowing.
The Palestinian Authority would face a financial crunch if Israel continued to withhold the tax money.
Unemployment in the Palestinian territories runs high, at 22 percent, and half the Palestinian population lives in poverty. In Gaza, many Palestinians live on an average of $2 a day.