Before The Federal Bailouts, There Was The PA

Is it too late for the PA to go into Chapter 11?

The international community has given 1.7 billion dollars (1.18 billion euros) in aid to the Palestinian Authority over the last year, the French foreign ministry said Wednesday.

That was 0.6 billion dollars more than was promised at a major donor conference held last December in Paris, spokesman Frederic Desagneaux said.
At that conference, donors promised to provide 7.4 billion dollars over three years, which was considerably more than the 5.6 billion dollars the Palestinians had requested.

The donors agreed to allocate 1.1 billion dollars in the first year.
"Such payments above the promises made are the concrete sign of the exceptional engagement of the international community," Desagneaux said.

Yes, those excessive payments are a sign of something--but contrary to Mr. Desagneaux, I don't think the international community should be so quick to flatter itself.

The Washington Post reported in July:

In 2002, when oil prices were hovering around $21 a barrel, nearly two dozen Arab nations joined to pledge yearly contributions of $660 million to support the Palestinian Authority's annual budget. Now, even with oil prices more than six times higher and the Palestinian Authority bordering on financial ruin, only a handful of Arab countries are sending even a small portion of the money they promised, according to data examined by The Washington Post.

Out of 22 Arab nations that made pledges, only three -- Algeria, Saudi Arabia and the United Arab Emirates -- have contributed funds this year, while oil-rich countries such as Libya, Kuwait and Qatar have sent nothing and still owe the Palestinian government more than $700 million in past-due pledges.

Perhaps the international community should take a lesson from the Arab neighbors of the Palestinians. Of course, now with the price of oil headed below $40 a barrel after being up to $150, don't expect those Arab countries to show any 'exceptional engagement' in the near future. That, combined with the global recession, means that the PA may soon be financially--as well as morally--bankrupt.

Not that such a detail will stop the Quartet from pushing Israel to continue the peace process.

Technorati Tag: Palestinian Authority.