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Before UN Diplomatic Showdown, a Palestinian Budget Crisis
(New York Times) Ethan Bronner - The Palestinian Authority is mired in a severe economic crisis, leading many in Ramallah to a sense of foreboding and despair. More than 150,000 state employees, whose salaries support a million people, had their wages cut in half this month. Palestinian banks have lent the government more than $1 billion and do not want to lend more. The immediate cause of the crisis is the failure of foreign - especially Arab - donors to fulfill promises of aid. This week, Saudi Arabia announced a $30 million donation to the PA. By contrast, the Saudis just gave Jordan $1 billion on the heels of an earlier $400 million. A top Israeli military official complained that the PA had chosen politics over development in recent decisions, notably in its handling of West Bank projects to be financed by Turkey, France and Japan. All have failed to materialize, he said, because of disagreements between the PA and Israel over who would control the land on which the projects would rise.