Donor Nations Ante Up for Palestinians

The United States and other nations eased a budget crisis threatening Palestinian autonomy on Friday by promising to come up immediately with $42 million for the new administration in Gaza and Jericho.

The donor nations agreed to give the money after the Palestinians described their spending plans and government structure in an effort to dispel donor concerns of waste or corruption, officials said.

The money, expected today or soon after, will help to cover a projected 1994 operating deficit of $77 million. Palestinian leaders are struggling to finance a rapidly growing police force and establish a civil service in the newly autonomous zone encompassing the Gaza Strip and Jericho on the West Bank.

The cash shortage is so acute that some Palestinian staffers do not even have telephones.

“I am very satisfied,” Nabil Shaath, a Palestinian peace negotiator, told a news conference at the close of a two-day meeting of donor nations.

“I think the meeting has made significant progress toward making peace work on the ground,” he said, referring to the agreement between Israel and the Palestine Liberation Organization granting the Palestinians limited self-rule.

After the accord was signed in September, donor nations pledged more than $2 billion over five years to help move the autonomy process along. But almost none of that money has come in.

Donors are jittery about PLO Chairman Yasser Arafat’s history of handing out cash without keeping records and are seeking assurances that the money will not end up lining the wrong pockets.

Arafat became so irked by the donors’ failure to deliver that he threatened last week to delay his arrival in Jericho unless the process was speeded up. No day has been set for his arrival, but a PLO memo made public Thursday said the organization’s offices in Tunis, Tunisia, will close by June 15.

Shaath said the donor money would go for “start-up costs” that will make the Palestinians self-reliant. An increasing percentage of the budget is expected to come from tax collection.

Donors said they would meet again in Paris on July 10 and 11 and expect to come up then with the remaining $35-million shortfall in the Palestinians’ 1994 operating budget of $168 million. The entire deficit was not covered this time because some donor nations had not yet responded.

Countries that weighed in with money on Friday were the United States, with $10 million, Canada, Japan, Saudi Arabia and Norway, officials said.