RAMALLAH, July 27, 2010 (Xinhua) -- Palestinian officials said on Tuesday that the lack of Arab donations to the Palestinian National Authority (PNA) this year might lead to a severe financial crisis in the upcoming months.
Palestinian Labor Minister Ahmed Majdalani told Xinhua that Arab states have only paid 20 percent of what they have pledged to give in aid to the PNA.
"Our Arab brothers are cutting off the financial supports when our European friends are honoring their pledges to financially boost the PNA," he said.
Majdalani denied that the western-backed PNA, which relies on international aid to meet its needs, is now suffering from a financial crisis, affirming that the situation is still under control so far.
"The situations is in hand till now, but it might worsen in the upcoming months if the Arabs will continue not to send funds to support the PNA's budget," he added.
The Palestinian cabinet, led by the U.S.-backed, former World Bank official, Salam Fayyad, urged donor countries, during its weekly meeting on Monday, to swiftly transfer cash to cover the deficit in its general budget.
The cabinet said that foreign aid payments were not enough to cover the budget deficit during the first half of 2010 compared to the total fund needed for the whole year.
The cabinet also stressed the necessity to take all the measures needed to prepare the 2011 budget to achieve the main objective of the government's medium-term financial policy not to depend on foreign donations to back the government's running costs.
The Palestinian government approved in March a 3.9 billion U.S. dollar budget for 2010.