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Minister: PA will borrow from banks if necessary

June 12, 2012 12:48 P.M. (Updated: June 21, 2012 10:51 P.M.)
BETHLEHEM (Ma'an) -- The Palestinian Authority will start talks with the private sector, and still has bank funds available to cover its financial crisis, the newly-appointed PA minister of economy Jawad Naji said Monday.

The Palestinian Monetary Authority chief Jihad al-Wazir said Sunday the PA had reached its maximum limit for bank borrowing. But the minister told Ma'an: "If we need, we will borrow from banks to pay salaries."

"In fact there are deposits and cash which we haven’t used so far," Naji continued.

The minister assured that public sector staff salaries would be paid on time in the coming months, while underlining the seriousness of the crisis and urging Arab and international donor to fulfill aid pledges to the PA.

The IMF says the aid-dependent Palestinian economy has entered a "difficult phase" with a severe liquidity crunch worsening since last year due to a drop in aid from Western backers and wealthy Gulf states and Israeli restrictions on trade.

PA Prime Minister Salam Fayyad said in January that his government owed $1.1 billion in bank loans, as well as $400 million in unpaid revenues to private sector contractors.

Naji said the government would start talks with the private sector in two weeks, reactivating a committee formed in 2010 to set a comprehensive private and public sector strategy.

But Chief Executive of PADICO investment company Samir Hleilah stressed to Ma'an that private sector talks with the government, launched earlier this year, had failed to find a consensus.

"Previous talks have stopped and an agreement was reached that taxation should be determined by the president or the Palestinian Legislative Council not the government. Other than that, nothing has been agreed on," he said.

Talks, he said, should focus on a financial strategy discussing the PA’s economic policies rather than the deficit.

The Palestinian Authority is bigger than its economy, and so the PA itself should be restructured reconsidering expenses, Hleilah said.

The Gaza Strip and Palestinians in the Diaspora should also take responsibilities, he added.

Meanwhile the economy minister said no Palestinian Investment Conference was planned for 2012, and said he would prefer a national conference to individual events in each district. An investment conference is scheduled to be held in northern West Bank governorate Tulkarem in July.
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