World Bank official: Palestinians

The Palestinian Authority (PA), the largest employer in the West Bank and the Gaza Strip, is facing a fiscal crisis that could result as early as next month in it being unable to pay the salaries of its 130,000-plus officials and security staff, Nigel Roberts, the World Bank's man in the West Bank and Gaza Strip said in an interview with Haaretz. According to Roberts, the PA is on the verge of functional bankruptcy. The failure to make the salary payments in full and on time will affect hundreds of thousands of people, and the tens of thousands of suppliers and merchants who earn their living from its employees. They will join the masses of unemployed. According to the World Bank, the unemployment rate in the territories exceeds 20 percent, with a rate of about 30 percent in the Gaza Strip. The bankruptcy of the PA following the elections, Roberts warns, could generate a shock of unimaginable dimensions. The checkpoints and the barrier cost the Palestinian economy about 5 percent real growth every year. In a New York Times interview, Roberts said that is a major toll, given that 10 percent real growth would be needed to solve the unemployment problem. In 1999, before the intifada and the Israeli response, the Palestinian Authority had a balanced budget and needed no outside support. Now, even though revenues have recovered to where they were in 1999, the deficit has ballooned.