JERUSALEM, June 1 (Reuters) - The Western-backed government of Palestinian President Mahmoud Abbas has so far received only a fraction of the $1.5 billion in donor assistance needed to meet its budget in 2009, the IMF said on Monday. The budgetary aid received by Palestinians over the past five months totals $328 million, less than 55 percent of the amount needed to pay monthly expenditures, a senior International Monetary Fund (IMF) official told reporters. To offset the shortfall in donor funds, Abbas's Palestinian Authority has been forced to borrow from private banks, but the authority is close to reaching its borrowing limit, said Oussama Kanaan, IMF representative in the West Bank and Gaza Strip. "There is now an increased risk of re-emergence of a serious liquidity crisis and expenditure arrears unless donor disbursement to the recurrent budget are promptly increased to at least an average $120 million per month," he said. Donor assistance surged in March to $178.7 million, but dropped to only $25.7 million in May, the IMF said. "Donors have to act urgently to disperse the money otherwise we'll have a big problem," said Kanaan. Donor states have announced massive pledges for the Palestinians over the last two years in a public show of support for Abbas in his power struggle with Hamas, which won a 2006 Palestinian election. These included $4.5 billion in pledges at a donors conference in the Red Sea resort of Sharm el-Sheikh on March to help rebuild the Hamas-ruled Gaza Strip after an Israeli offensive, and to help fund Abbas's government, which holds sway in the Israeli-occupied West Bank. But Western diplomats involved in the process said many of the pledges -- made at five donor and investment conferences since December 2007 -- were counted more than once, have yet to materialize or were too vague and conditional to rely on. International donors will discuss financial aid to the Palestinians during their next meeting on June 8 to be held in Oslo, Norway. (Reporting by Ivan Karakashian; editing by Richard Balmforth)
UN investigator South African jurist Richard Goldstone (R) walks with Hamas movement representative Ghazi Hamad upon his arrival at the Rafah border crossing in the southern Gaza Strip June 1, 2009. ...
Politics of Aid
