Asma Marzouq – Palestine Economy Portal

Translated by Tamara Barakat

Data published by the Ministry of Finance revealed that foreign aid to the Palestinian budget has continued to decrease. During the first six months of 2016, foreign aid declined by $148 million in comparison with the same period last year.

The total external financing to the budget in the first half of 2016 amounted to NIS 1 billion and 205 million ($313 million), while it reached NIS 1 billion and 776.7 million ($461 million) during the same period in 2015.

Arab donors contributed with the majority of external support, providing around NIS 572 million. Saudi Arabia provided NIS 461.5 million, Algeria provided NIS 102.5 million, and Egypt provided NIS 8.5 million.

Additionally, international donors provided a total of NIS 443 million in support to the Palestinian budget. Europe provided NIS 338.7 million through the PEGASE mechanism, while the US and France provided NIS 59.4 million and NIS 34.8 million respectively.

External support to the Palestinian Development Budget amounted to NIS 190 million.

Nael Mousa, professor of economy at An-Najah National University, attributed the decrease in donor aid to the decline in the priority of the Palestinian issue to donor countries in light of the difficult conditions the region is undergoing.  Donor aid is reoriented for supporting refugees and countries suffering from crises.  

Mousa also believes that the drop in oil prices affected the budgets of some Arab States and forced them to decrease or completely halt their support to the Palestinian budget.

He explains that the Occupied Palestinian Territories are undergoing a state of recession, and that foreign aid is usually associated with the occurrence of a security crisis or a political breakthrough.

Total Net Revenue during the first six months of 2016 amounted to NIS 7 billion and 174.8 million, while Expenses reached NIS 7 billion and 315.4 million.