Illustration of aid for Palestinians. (REUTERS / Ibraheem Abu Mustafa)

Termination of International Aid, Economic Crisis Threatened Palestine

Estella Claudia
Politics & Economic
State Budget
Jun 20, 2019
2464
Palestine - Head of the Palestinian Monetary Institute (PMA), Azzam Shawwa stated that, the economy of his country is on the verge of collapse as there is a termination of international aid including the United States which stopped all aid to them by hundreds of millions of dollars in the past year. He also stated that, the situation also contributed to the severe contraction of Palestinian gross domestic product (GDP) per capita which currently reached USD 13 billion.

As the result of the financial crisis, Shawwa said that the Palestinian government difficult to run the government system in the future.

Shawwa said to Reuters on Wednesday (19/6) that, they are currently at a critical point. He is wondering how to pay the salaries next month, finance their obligations, and how daily life can continue without liquidity in the hands of the Palestinian people. He does not know where their direction is going and this uncertainty makes it difficult to plan tomorrow.

It is reported that, US is the largest donor of UNRWA with a contribution of USD 364 million annually or IDR 5.4 trillion.
The aid termination from US occurred after President Donald Trump recognized Jerusalem as the unilateral capital of Israel. In fact, Jerusalem is one of the sources of the Israeli-Palestinian conflict to date, both of which claim the territory as their respective capitals. Since then, the Palestinians have considered the US siding with Israel and promised that they will not want to follow the White House's proposed peace plan.

Besides the aid termination from the US, the failure of the Arab countries to keep their promises regarding aid contributions worsen the Palestinian financial crisis as Arab countries had promised to donate US $ 40 million every month to Palestinians.

Shawwa said the only thing that prevented the collapse of the Palestinian economy was the income generated by more than 100,000 Palestinians working in Israel. In addition, income is also obtained from sending money to Palestinians working abroad and Palestinians must increase the loan amount of USD 8.5 billion from 14 banks to overcome the crisis because without the loan, there will be a financial collapse and affects Palestinian financial stability.

Source: https://www.cnnindonesia.com/internasional/20190619132825-120-404592/bantuan-dipangkas-palestina-terancam-krisis-ekonomi

Termination , International , Aid , Economic , Crisis , Palestine