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Tuesday, August 02, 2011

How to solve the PA's budget problems

From Ha'aretz on Sunday:
The Palestinian Authority will pay its employees' salaries in full in August but still faces a financial crisis which forced it to pay only half wages in July, Prime Minister Salam Fayyad said on Sunday.

Earlier on Sunday, the head of the public sector workers' union had raised the prospect of a strike in protest at the wage cuts. The union was due to meet on Monday to take a decision on possible industrial action.

Fayyad, who is also finance minister, said he expected full salaries to be paid on Tuesday.

"In view of the continued financial difficulties, payment of the salaries in full will greatly limit the ability of the PA to meet other needs during the coming month," he said in a statement, without going into details.

Fayyad has blamed a fall in aid from Arab states for largely causing the financial crisis. The PA continued to seek the foreign aid needed to overcome the problem, he said on Sunday.

The PA relies on help from foreign states to pay the salaries of about 150,000 Palestinians in the West Bank and Gaza Strip and monthly allowances to another 75,000 people.
It looks like Fayyad's move averted the strike, as there is no mention of the strike in the Arabic media today.

But Fayyad can save much of the budget earmarked for wages and "allowances" without penalizing a single worker.

The PA still pays its employees in Gaza - people who are not working at all ever since Hamas took over Gaza. But even after supposed "unity" these workers are still doing nothing. Either put them to work or take them off the payroll.

Gaza altogether gets some 60% of the PA budget, and a lot of that must be these non-working employees.

Similarly, the 75,000 people who get "allowances" are the prisoners who get salaries and the families of "martyrs" who get paid. These people should not be getting a dime, let alone prioritized salaries!

Add it up and it looks like Fayyad can cut his payroll budget in half without any reduction in services. (What are the idle Gaza employees going to do - strike?)

And, of course, it will never happen.