Citing financial strains and one month after not paying salaries for its 180,000 employees, the Palestinian government said today that it will pay only 50 percent of the May salary for its employees and nothing for the June salary.
Speaking in a press conference in Ramallah, Finance Minister Shukri Bishara announced that the government would be able to pay only half salary for May, with a minimum of 1,750 shekels (app. $500).
Bishara pointed out that the Palestinian Authority (PA)’s finances were hit by a sharp decline in public revenues in the last four months, exacerbated in May when it refused to receive around $200 million in tax funds Israel collects on behalf of the PA, causing the public revenues to drop by 80 percent.
“In June, the PA received zero clearance funds at a time when local revenues declined by 280 million shekels (app. $81 million). Besides, the PA did not receive 100 million shekels (app. $30 million) in external financial aid, a situation which resulted in the PA not receiving 380 million shekels ($111 million) in revenues,” said the Finance Minister.
In terms of the monthly expenses, Bishara pointed out that they totaled 760 million shekels ($220 million), including 550 million shekels ($160 million) accounting for the minimum public wages besides to 210 million shekels ($61 million) in other expenses, particularly health expenses following the coronavirus pandemic outbreak.
The resulting government budget gap was covered through a bank loan of 250 million shekels ($72 million).
Bishara went on to say that the government would be able to disburse the public servants’ salaries till the end of 2020 similar to the May percentage of disbursement, noting that the percentage of disbursement will be increased for the salaries in the coming months should the government secure additional funds.
He pointed out that the PA is currently faced with three financial challenges; the first one resulting from the Palestinian leadership’s protest against Israel’s annexation move and subsequent halting of coordination, the second resulting from Israel’s attempts to sue Palestinian banks, and the third is the result of grappling with the economic consequences of the coronavirus pandemic.
The PA refused to accept the monthly clearance revenues after ending the coordination and as a result of Israel insisting on the coordination as a mean to deliver the money.
