Palestinians in financial crisis despite Arab aid

Arab League Secretary General Amr Moussa (R) meets with Iraqi Secretary General of the Association of Muslim Scholars, Sunni cleric Harith al-Dari, in Cairo on April 11. Moussa has called on all Arab governments and institutions to speed up their financial aid to the Palestinians and even opened an account in a Cairo bank to receive donations.(AFP/Khaled Desouki)  

April 12,2006

CAIRO (AFP) - Arab countries have vowed to plug a gaping hole in the Palestinian budget after EU and US aid suspensions to the Hamas-led government, but analysts doubt such promises will come close to filling the shortfall.

Fearing a spiralling crisis, Arab League Secretary General Amr Moussa Tuesday called on all Arab governments and institutions to speed up their financial aid to the Palestinians and even opened an account in a Cairo bank to receive donations.

Oil-rich Gulf countries Kuwait, Saudi Arabia and the United Arab Emirates for their part promised a total of 80 million dollars to the Palestinian Authority.

Arab countries have repeatedly urged the international community "not to punish the Palestinians" in the aftermath of the Hamas election victory last January.

Help from Arab nations, and also from Iran, is of paramount importance to Hamas, after the European Union and the United States suspended direct aid to the Palestinians over the group's refusal to recognise Israel.

"We shouldn't expect anything of Egypt and the other Arab states," said Emad Gad, an analyst with the Ahram Center for Strategic Studies.

"There is no political will to support the Palestinians financially," said the Cairo-based analyst, pointing to the fact that previous Arab promises of aid to the Palestinians had not been fulfilled.

Paris-based political analyst Antoine Basbous echoed the view and added that Arab governments offered their support to Hamas for fear that the Palestinian government "falls into the hands of Iran."

But according to Basbous, Arabs will be slow to fulfill their promises for fear of upsetting the international community.

"We have received pledges from the Arab world that will help us operate for several months," Palestinian finance minister Omar Abdelrazek said on the Internet website of Hamas.

"Twenty million dollars from Saudi Arabia, 40 million dollars from Kuwait and 20 million dollars from the UAE are to be transferred," he said.

Egypt and Jordan, both key mediators in the region, have sent aid convoys to the cash-strapped territories and promised more in the weeks to come.

Algeria has sent 35 million dollars to the Palestinian government enabling it to pay some of its overdue salaries.

"Qatar will continue to support the Palestinians through industrial and hospital projects, for example," said the country's ruler, Sheikh Hamad bin Khalifa al-Thani.

Bahraini Foreign Minister Sheikh Khaled ben Ahmed al-Khalifa this week told AFP that "we have always been committed to supporting the Palestinian people and helping them cope with their day to day living."

But despite Arab offers of financial assistance, Hamas nonetheless faces a 120 million budget shortage, according the Palestinian finance minister.

Egypt's President Hosni Mubarak Tuesday warned that impoverished Palestinian territories would be a breeding ground for extremism.

"This aid is meant for Palestinian citizens," said Mubarak on his way to Saudi Arabia as part of a Gulf tour. "If a citizen can't find food and can't bring up children, he will become an extremist."

The European Union, which is the Palestinian Authority's main source of funding with 500 million euros (around 610 million dollars) annually in aid, has suspended aid to the Palestinians following a meeting of EU ministers Monday.

The 25-nation bloc has demanded that Hamas renounce violence, recognize Israel and respect former Israeli-Palestinian agreements as preconditions for aid.

The Arab League had condemned the EU's move to cut aid as "reprehensible".

Bahrain stressed that "opposing the choice of people will only contribute to fanning feelings of frustration and lead to waves of rage."