DUBAI, 21 September 2003 — The Group of Seven (G-7) most industrialized nations yesterday said they were favorable toward increased financial aid to the Palestinians, after they requested $1.2 billion in emergency humanitarian and budgetary support for 2004.
“We have agreed to review the prospects for increased financial assistance to the Palestinian Authority (PA) in the short-term,” said a G-7 statement after a meeting here between its finance ministers and their Palestinian counterpart, Salam Fayyad.
“We will advocate that the World Bank replenish the Trust Fund for the West Bank and Gaza this fall. “We urge other members of the international community to increase and accelerate their assistance provided to Palestinian Authority,” it added.
Fayyad told AFP the Palestinians needed $1.2 billion in aid for 2004, of which $500 million would be earmarked for the budget and the rest for humanitarian assistance and development projects. US Treasury Secretary John Snow said “the United States will continue to provide budgetary support and other aid to the Authority to help insure that it can effectively conduct normal government functions.” His statement, released after the meeting, was significant in view of the tension between Palestinian leader Yasser Arafat and the United States.
The G-7 — Britain, Canada, France, Germany, Italy, Japan and the United States - expressed concern “about the current humanitarian situation” and “support for the peace process.”
It also applauded Fayyad’s “reform efforts to improve transparency” in the Palestinian budget. Fayyad expressed optimism that the Palestinians would secure the requested funds at a meeting of donors slated for November at an as yet undetermined venue.
The G-7’s decision to support the Palestinian request built on a background paper prepared by the Italian presidency of the group which emphasized that “peace and economic progress are inextricably linked.”
It also called on the government of Israel “to find ways of maintaining security without stifling the Palestinian economy and impairing the livelihood of ordinary Palestinians.”
The paper noted the Palestinian Authority has undertaken “comprehensive reforms with resolve so as to become more efficient and effective.” It listed as a main achievement the consolidation of all the Authority’s revenues under a single account supervised by Fayyad, and the abolishing of the emergency state security court.
It noted that all indicators on the Palestinians, compiled by the World Bank, the United Nations and non-governmental organizations, have deteriorated “dramatically”, with 9.3 percent of children suffering malnutrition.
The Palestinian GDP declined by 38 percent between 1999 and 2002, slashing the per capita income by half to $900 a year, and unemployment rose from 10 percent in September 2000 to nearly 40 percent.
Fayyad said the unemployment rate was actually much higher at 60 percent.