Palestinian Authority struggles to pay public employees
After years of economic stagnation, authorities in the occupied West Bank say they are struggling to pay salaries for public employees, as soaring inflation, dwindling donor aid and Israel's withholding of vital tax revenues strangle the Palestinian Authority's (PA) already crippled budget.
"The conditions we are living in are difficult, we are in financial deficit," Prime Minister Mohammad Shtayyeh admitted this week, telling reporters the PA has not received aid to pay salaries, estimated at a monthly cost of 920 million Israeli shekels ($292m).
The financial crisis – described by officials and analysts as "the worst" since the PA's establishment in 1993 – has left workers anxious.
"At first, we heard that we would not get paid at all. Then we were told that we may get a permanent 25 percent deduction on our salaries. After that, they said that the 25 percent deduction would only be for a few months," a PA public employee told Al Jazeera on condition of anonymity.
"Until now, nobody knows whether we will get paid or not, or if we'll get our salaries in full or only 75 percent of it."
Like economies the world over, Palestine is currently wrestling with soaring inflation stemming from supply chain snarls and shortages of raw materials as nations cast off coronavirus restrictions.
The PA's fiscal revenues declined to their lowest levels in 20 years shortly after the start of the pandemic, which only exacerbated longstanding financial challenges.
While support from foreign donors has withered over the years, the biggest blow was dealt in 2017, when former United States President Donald Trump cut off nearly all US aid to Palestinians. Though Trump's successor, Joe Biden, has reopened some of the funding taps, US laws now prohibit direct aid to the PA.
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