GAZA CITY, Gaza Strip — Foreign aid and grants to the Palestinian government have dropped by 45% so far this year, according to Palestinian Prime Minister Rami Hamdallah, raising questions about the reasons for this significant drop, the extent to which the Palestinian Authority is affected (as it depends on these grants as a major source of funds) and how successful the measures taken by the PA to meet this challenge are.

Hamdallah revealed the figures in his speech Aug. 27 at the second Social Accountability Forum in Ramallah.

According to the quarterly statistical bulletin issued by the Palestinian Monetary Authority in June, foreign aid and grants provided to the PA reached about $1.23 billion during 2014, while wages and salaries amounted to about $1.9 billion, and the total debt at the end of 2014 reached almost $2.22 billion.

Samir Abu Mudallala, an economics professor at Al-Azhar University in the Gaza Strip, told Al-Monitor, “Since its establishment in 1993, the PA has been receiving foreign financial aid and grants, reaching to this date about $18 billion. The biggest financial grant to the PA so far was in 2008 of around $1.8 billion all at once. However, after 2011, foreign aid started to drop.”