The Palestinian Authority was on Tuesday debating a draft budget amounting to $3.9 billion, of which it said $1.4 billion would have to come from foreign financing.
Prime Minister Salam Fayyad lamented a lack of payment of foreign aid as he presented the 2013 draft budget to politicians and economists in Ramallah, the seat of the Palestinian Authority, on Monday.
“Drawing up this budget came in difficult circumstances,” he said. “The principal reason for our financial crisis last year was the lack of payment of foreign financial aid that was counted on.”
The draft specified the need for $1.4 billion in “external financing.”
On Friday, following a three-day visit by US President Barack Obama to Jerusalem and Ramallah, a top official in Washington said the US had unblocked almost $500 million in aid to the Palestinian Authority which had been frozen by Congress for months.
And Israel is to immediately unblock revenues it collects on behalf of the Palestinian Authority, frozen last year in retaliation for the Palestinians winning upgraded U.N. status, the Israeli premier's office said on Monday.
Total 2013 expenditure, including on development, would amount to almost $3.9 billion, the Palestinian draft budget said.
The government's recurring deficit would be just over $1.0 billion, and its total deficit stands at $1.4 billion.
Of $350 million to be spent on “development,” $300 million would need to come from abroad, according to the draft.
The draft will be discussed on Tuesday and Wednesday in parliament, and will have to be approved by president Mahmud Abbas by March 31.
The Palestinian Authority's gross debt stands at $3.8 billion.
At an Arab League summit in Doha that began Tuesday, Qatar called for the immediate establishment of a $1 billion fund to help Palestinians in Arab east Jerusalem, and offered to contribute $250 million towards it.
Qatar's emir, Sheikh Hamad bin Khalifa al-Thani, made the proposal at the opening of the summit, saying other Arab countries must provide the remainder, and that the fund would be run by the Islamic Bank in Jeddah, Saudi Arabia.
He gave no details for its implementation.
The World Health Organization on Monday said hospitals in east Jerusalem were at risk of failing to treat patients due to the Palestinian Authority's financial woes, calling on international donors to step up aid.
“The PA's debt to the East Jerusalem Hospitals Network (supported by the WHO and the EU) has persisted as donor support to the PA has decreased,” it said in a statement.
“Staff salaries are consistently paid late and basic supplies for quality clinical care are lacking,” it added.
There is “risk (of) closing down entire departments due to the increasing financial deficit,” it said, urging donors to “support the PA to meet its obligations.”