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Economy of Palestine
Following the 2006 legislative election in which Hamas won, Israel handed over $ 55 million in taxes stopped; It does not have access points (port, airport, etc.) to collect taxes, Israel did. These funds make up one-third of the budget. Two-thirds of it is the main budget and support for the salaries of 160,000 civil servants (among whom there are 60,000 security forces and police), a budget that one-third of the Palestinian people are deprived of.
Israel also decided to impose its controls on checkpoints, which since the beginning of the Second Intifada have been a major factor in the 2002-2001 economic crisis, which the World Bank compared to the 1929 economic crisis. In addition, the United States and the European Union have provided direct assistance.
Meanwhile, the United States has blocked the economic activities of banks and obstructing the payment of some auxiliary funds of the Arab League (for example, Saudi arabia and Qatar) to the accounts. On May 6 and 7, 2006, hundreds of Palestinians in Gaza and the West Bank demonstrated to demand payment. With the increase of "economic pressure" on the foundation, tensions between Hamas and Fatah are rising.
Foreign aid and budget deficit
Due to the special situation of the disputed areas, the Palestinian Authority (PA) had received unparalleled financial support from the international community. According to the World Bank, $ 929 million was raised by the international community in 2001. This amount was $ 891 million in 2001 and $ 1,100 million in 2005 (equivalent to 53% of the total budget in 2005).
The main purpose of these grants was budget support, promotion aid, and public health. In 2003, the United States raised $ 224 million, the European Union $ 187 million, the Arab League $ 124 million, Norway $ 53 million, the World Bank $ 50 million, the United Kingdom $ 43 million, Italy $ 40 million, and the remaining $ 170 million were paid by other countries.
According to the World Bank, the budget deficit in 2005 was about $ 800 million, about half of which was provided by sponsors. The report also states that the financial situation of PA. It had become increasingly unstable, largely due to uncontrolled government spending, especially the high growth of government employee payroll, the expansion of public transportation schemes, and the expansion of the credit network.