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Palestinians slash demand for foreign aid

MADRID - The Palestinian Authority slashed its need for foreign aid this year as it moves toward more self-reliance and its target of a Palestinian state in 2011, a donor conference said Tuesday.

“The external aid has gone down and the need for external aid to balance that budget has gone,” said Norwegian Foreign Minister Jonas Gahr Stoere, whose country chairs the group of major donors to the Palestinians.

The group, the Ad Hoc Liaison Committee, noted “a positive overall trend in the economic development in the West Bank, with growth reaching 8.0 percent in 2009,” it said in a statement after talks in Madrid.

“The Palestinian economy shows a significant reduction in the share of external financing of the Palestinian GDP over the last three years.”

It said the PA has requested budget support of 1.2 billion dollars in 2010, down from 1.35 billion in 2009 and from 1.8 billion in 2008.

Palestinian prime minister Salam Fayyad said this change “reflects the policy of the PA aimed at securing a reduced degree of reliance” on the international community.

“The financial policy of PA has been placed firmly on the path that will secure reduced reliance on and need for external assistance... We are working toward greater viability,” he told the news conference.

“This meeting was a forum at which we... conveyed this message to our friends in the international community.”

Fayyad earlier this month predicted a Palestinian state will be established by August 2011, based on a decision taken by the Palestinian leadership in August 2009 to establish a state within two years.

Palestinians have repeatedly said they will unilaterally declare a state or ask for UN recognition of their independence amid growing frustration with so-far ineffective US efforts to relaunch peace negotiations with Israel.

The talks were suspended during the Gaza war of December 2008-January 2009.

Israel, however, has warned of a tough response to a unilateral Palestinian declaration.

“We have actually made very good progress, signifying what this statehood plan is about — transitioning into and transforming itself into a state of Palestine, with strong institutions,” Fayyad said Tuesday.

The AHLC, however, also warned that “the PA’s fiscal position remains precarious, as significant restrictions on access to markets and private investment continue and dependency on donor funding remains high.”

The World Bank warned on Monday that continued economic growth in the occupied West Bank would depend on Israel taking further steps to lift restrictions on movement.