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Why donor countries are giving less to the Palestinians

The international community has significantly reduced financial aid to the Palestinian Authority as people lose confidence in the peace process.

When the Palestinian Authority was established in 1994 pursuant to the 1993 Oslo Accord, the international community undertook to provide it with financial and economic support, amounting to $17 billion since its establishment until today. Most of this support was earmarked for bolstering the Palestinian government’s budget that was primarily used to pay the wages of PA employees, whose numbers exceed 180,000 today, more than 20 years following the establishment of the PA.

However, Palestinian Prime Minister Rami Hamdallah announced Feb. 16 that in 2015, the PA received half the usual aid pledged by donor countries. There has been a sharp decline in foreign assistance, which typically makes up 37% of the Palestinian general budget. Meanwhile, the remaining funds come in through local tax revenues and customs fees to the Israeli side, according to a financial report issued by the Palestine Economic Policy Research Institute-MAS in January 2016.

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