U.N. Says Palestinian Authority on Verge of Collapse
By REUTERS
Filed at 5:54 p.m. ET
UNITED NATIONS (Reuters) - The United Nations warned on Friday the Palestinian Authority was facing collapse and chaos unless Europeans, the United States and Arab countries came to its financial aid immediately.
Unable to pay salaries of nurses, teachers, security forces and other public servants, the Palestinian Authority, which governs Palestinians in the Israeli-occupied West Bank and Gaza Strip, could crumble, Terje Roed-Larsen, the U.N. Middle East envoy said.
``The Palestinian Authority will within just a few weeks not be able to pay its salaries which as an effect may lead to a collapse of key Palestinian institutions,'' Roed-Larsen told a news conference.
He said he was concerned about a vicious cycle in which a financial collapse could lead to greater violence without a functioning Palestinian Authority. The situation could easily get out of hand with ``violence and counter-violence, maybe on a massive scale'' as well as chaos and anarchy, he said.
Close to 400 people have been killed since Palestinians started an uprising in late September against the Israeli occupation of the West Bank and Gaza Strip. More than 300 of the dead were Palestinians, 61 were Israelis and 13 were Israeli Arabs.
Israel has blockaded Palestinian areas since early October, causing the loss of $1.5 billion to the Palestinian economy as thousands of workers were prevented from reaching their jobs in Israel.
Secretary-General Kofi Annan, in a statement, also expressed his concern and said he had raised the issue with Israeli Prime Minister-elect Ariel Sharon, Secretary of State Colin Powell and other international leaders.
Annan appealed strongly to all concerned to ``prevent a further escalation of violence, which could have very serious consequences for the entire region.''
APPEALS FOR FUNDS
Roed-Larsen will visit Washington on Tuesday and Wednesday for talks on the entire range of Middle East issues. He will also tour European capitals, where he hopes to collect 60 million euros ($55 million) to support the Palestinian Authority.
So far only Norway has contributed $10 million while Israel has withheld some $54 million from its value added or sales tax collections because of the violence.
The Palestinian Authority has a monthly budget of $85 million and has used a bank overdraft to get through February but will not have funds for March, Roed-Larsen said.
After March, it will be ``absolutely necessary'' for Arab nations, which have pledged $1.2 billion, to contribute to the Palestinian budget and carry it through the year, he said.
Closure of the border in the long run would hurt Israel and cause more unrest in the West Bank and Gaza, where unemployment is now 38 percent, with 30 percent of the people living below the poverty line and earning less than $2.10 a day, he added.
``This indicates a crisis in living conditions which is leading to ... a crisis related to attitudes on the Palestinian side, but also on the Israeli side,'' Roed-Larsen said.
Before the latest violence erupted, 70 percent of the Palestinians supported the peace process but now only a minority have any faith in the negotiations, he said.
``There is a growing support for extremist organizations searching to solve the issue at hand through violence.''
``We have informed both parties that in our opinion there is a situation developing where there is first a fiscal collapse and then an institutional collapse of the Palestinian Authority that will lead to further violence,'' he said.