The Palestinian Authority (PA) has not paid the salaries of its employees for the month of June yet, knowing that it did not pay the salaries of May either due to the suspension of agreements with Israel.
This issue further aggravated the living situation in the Palestinian territories which have been under lockdown for the past three months due to the spread of the coronavirus.
The Palestinian government is trying to secure part of the salaries; however, it is unclear if the Authority will be able to provide the salaries for the coming months, especially if Israel goes ahead with its plans to annex part of the West Bank, a source close to the matter told Asharq Al-Awsat.
He added that the Authority refused to receive the funds from Israel since it ended the security coordination, and was now facing a major fiscal deficit.
The Minister of Civil Affairs, Hussein al-Sheikh, stated that the refusal to receive the funds from Israel was in compliance with the Authority's decision to end ties with Israel.
Palestinian Prime Minister Mohammad Shtayyeh said that the Authority may not be able to pay salaries this month pending the estimates of the Ministry of Finance, which is yet to issue a statement on the matter.
Member of the Palestine Liberation Organization (PLO) Executive Committee Azzam al-Ahmad warned that Palestinian Authority would face another financial crisis.
Ahmad said that the PLO lost many of its resources after the Gulf War and was unable to pay salaries for nearly a year.
The official indicated that the Authority faced several financial crises where it couldn’t pay salaries for over a year, or had to pay them every three or four months. He added that after Hamas won the elections, the employees did not receive any payment for 18 months.
The government estimated the economic losses at $3.8 billion, and said it expected the budget deficit to increase to $1.4 billion, especially with the expected 50 percent reduction in revenues.
Over the past two years, reports of the Palestine Monetary Authority showed a continuous slowdown in the Palestinian economy, with the growth rate reaching 0.7 percent compared to 3.1 percent in 2017. This comes against the backdrop of the continued contraction of the economy in the Gaza Strip and the decline in growth in the West Bank.
Earlier, the World Bank warned that poverty may double in the occupied West Bank this year due to the economic situation, and the staff crisis reinforces these estimates.
Israeli media reported that the Palestinian Authority does not intend to pay the salaries of employees or transfer funds to Gaza, in order to push people to escalate the situation with Israel.
The Authority informed the Coordinator of Government Activities in the Territories (COGAT), Kamil Abu Rukun, that the Israeli Defense Minister, Benny Gantz, must pay the salaries if Israel annexed parts of the West Bank, according to Israeli reports.
The salaries of state employees in the Palestinian Authority are estimated at about NIS 550 million, to be paid to about 140,000 employees.
