Despite massive aid, Palestinian Authority is bankrupt

Tuesday, July 29, 2008 |  Israel Today Staff

The Palestinian Authority, the largest recipient of financial aid per capita in the world, is on the verge of bankruptcy, Palestinian officials told The Jerusalem Post on Monday.

While the Palestinian Authority receives hundreds of millions of dollars each year from the US and the European Union, Palestinian officials said that Arab donor states have failed to make good on their generous financial pledges.

The officials said that without an immediate influx of funds, the Palestinian Authority, which is the largest employer in Judea and Samaria, will be unable to pay July salaries to its 150,000 public servants and police officers.

That raised fears that Hamas, which is flush with cash from Iran and other supporters, could make further inroads in the so-called "West Bank," where the government of Western-backed Palestinian leader Mahmoud Abbas still holds sway.

While the Palestinian Authority is generally believed to be in more capable economic hands today, for over a decade it was a money pit for donor states, with top officials stealing most of the funds for their own personal use. The worst offender was Yasser Arafat, whose wife and closest confidantes are still believed to be in possession of over $1 billion of donor funds.

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