Abbas blames Israel for Palestinian fiscal crisis

Palestinian Authority President Mahmoud Abbas on Saturday blamed Israel for the economic crisis in the Palestinian territories, reiterating the findings of a World Bank report earlier this week which accused Israel of limiting PA income by restricting access to the majority of the West Bank.

“The economic situation is very difficult and the central reason for this is the Israeli occupation,” Abbas said in an interview with Palestinian government television. “Israel exploits our resources and lands which directly leads to an increase in the deficit which we must contend with.”

According to Abbas, Palestinian Finance Minister Shukri Bishara informed him that the PA won’t be able to pay government salaries unless it receives international aid. The Palestinian government employs approximately 150,000 of the nearly two million Palestinians living in the West Bank.

In January, the Palestinian government said it was in “extreme jeopardy” because of a financial crisis it pinned on Arab countries’ failure to send hundreds of millions of dollars in aid. At the time, prime minister Salam Fayyad said the crisis had worsened in recent years, and the government, the Palestinian Authority, wasn’t able to pay the salaries of its employees.

Earlier this year the PA’s 2013 budget deficit was expected to reach $1.4 billion; the Palestinian Ma’an News Agency cited the deficit as nearing $500 million this year.

A World Bank report published earlier this week accused Israel of squeezing the Palestinian economy out of billions of dollars by restricting access to Area C, which comprises some 61 percent of West Bank territory but is under full Israeli civil and security control.

The report said the Palestinian economy could add $3.4 billion in potential value a year, or 35 percent of the 2011 Gross Domestic Product, if Palestinians are allowed to develop the restricted area. The bank says the deficit of the Palestinian self-rule government, currently dependent on foreign aid, would drop by half, thereby reducing “the need for donor support, and reduce unemployment and poverty rates.”

During his interview, Abbas called on expatriate Palestinians who succeeded in making a living abroad to aid the Palestinian Authority.

“I call on all wealthy Palestinians everywhere to support small projects. If every wealthy Palestinian took care of a family or opened up a small project for them, this would help to mitigate the crisis,” Ma’an quoted the president saying.

“We must take responsibility according to the law,” Abbas was quoted by Ma’an as saying. “We are working on improving our abilities and lowering the unemployment rate by supporting small enterprises.”

Abbas’s statements came amid renewed peace talks between Israel and the Palestinians that began at the end of July. The negotiations teams are scheduled to meet again this week.