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Wednesday, May 16, 2007

PA Aid UP $550 Million in 2006 According to UN

Say, don't you remember they called me Moderate,
It was Moderate all the time.
Why don't you remember, I'm your pal --
Say, buddy, can you spare a dime?

Palestinian President Abbas has been singing this song to everyone who will listen for over a year. The PA workers haven't been paid, all we read about in the papers is how since the "boycott" of aid to the PA's Hamas run government things in the territories have been going downhill fast. And yet we find out that according to the UN-- aid to the Palestinian Authority was up from $350 Million in 2005 to 900 Million in 2006 and increase of over 250%. These are UN numbers mind you, the same UN that has a resolution each hour condemning Israel, just for the heck of it.

Somebody's got to call a CPA because either someone is pocketing the cash, or the price of explosives has gone through the roof.

Aid to PA nearly tripled in '06, despite international boycott By Amira Hass, Haaretz

Correspondent Donations to the Palestinian Authority almost tripled last year as a result of the international boycott of the Hamas government, according to a report published this month by the United Nations Office for the Coordination of Humanitarian Affairs (OCHA). Aid in 2006 totaled $900 million, up from $349 million a year earlier.

The boycott meant that most countries refused to channel money directly to the PA, and Israel refused to transfer the tax revenues it collects on the PA's behalf.

However, Arab and Western nations continued and even increased their donations, channeling them through either a "Hamas bypass" mechanism known as the Temporary International Mechanism (TIM), or the office of PA Chairman Mahmoud Abbas. This money, which compensated entirely for the halt in Israeli tax transfers, partially financed the salaries of PA employees and was used to make welfare payments to the needy.

Normally, Israeli tax transfers cover about two-thirds of the Palestinian Authority's budget. Had economic activity in 2006 continued at the same level as the year before, they would have reached an estimated $800 million last year. But in fact, the PA's gross domestic product fell by 8 to 10 percent in 2006.

According to the report, the biggest contributor to the PA last year was the Arab League, which gave $448 million.

The European Union gave $219 million and the World Bank gave $42 million. In addition, the government obtained an estimated $180 million by smuggling in cash from abroad.

The report noted that, in part because less money was funneled directly to the PA, the trend toward greater financial transparency was reversed in 2006, even though the PA's donors have pushed for transparency for years.

For instance, instead of monthly reports on the utilization of the PA's budget, reports were published only semiannually, violating the PA's budget law.

Abbas' office issued no comprehensive data on its expenditures or receipts of money from abroad, while the Palestinian Investment Fund did not fully report its dealings with either the banks or Abbas' office.

Overall, TIM meant that the PA Finance Ministry had no control over income and expenditures and could not draft a budget for 2006, while its 2007 budget proposal lacked relevant data such as income and expenses for 2006 or the number of public-sector employees. It also caused other government offices to lag in payments to suppliers and resulted in the government's total expenditure falling 31 percent in 2006 to $1.37 billion. Its payments for salaries in particular dropped from $1 billion in 2005 to $655 million.

TIM also resulted in bureaucratic duplication and financial uncertainty for the recipients, the report said. For example, many employees did not receive their salaries regularly.

The document was written by Dr. Karim Nashashibi, who until two months ago was the International Monetary Fund's representative for the West Bank and Gaza.

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