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Palestinian govt may take loans from national investment fund

2013-01-06

RAMALLAH, Dec. 31 (Xinhua) -- The Palestinian government may take loans from the Palestine Liberation Organization"s (PLO) Investment Fund to alleviate the current fiscal crisis, a Palestinian official said on Monday.

"We don"t like to do it, but our options are very limited," Palestinian Minister of finance Nabil Qessis told Xinhua.The Palestinian government would not be able to meet its financial commitments due to the safety network pledged by Arab countries with 100 million U.S. dollars monthly is not ready yet, Qessis said.He added that Israel withholding of tax revenues it collected on behalf of the Palestinian National Authority (PNA) has aggravated the economic situation. The tax revenue dues represent one third of the budget, or one billion dollars every year.The budget of the Palestinian government mainly depends on international aid, but the aid from Arab countries has been very slow. Shortage in the budget exceeded one billion U.S. dollars.The PNA is paying the monthly salary to 148,000 security and civil servants in the Palestinian territories, with which is about 150 million dollars.The finance minister did not give information about the amount of the loan.The Palestinian Investment Fund (PIF) was established in 2003 as an independent investment company, which aims to strengthen the local economy through key strategic investments.Currently, PIF has approximately 868 million dollars in assets under management.The Palestinian government had to borrow 100 million loans from local banks to pay overdue salaries to civil servants under wage strikes in the West Bank.The PNA has exhausted its borrowing capacity with local banks after the 100 million dollars loans.