Cairo, Egypt — Jarred by reports that the Palestinian Authority risks financial collapse, Arab diplomats have agreed their governments will provide $40 million a month to ensure that Yasser Arafat's administration can pay workers and reduce Israel's economic pressure in the West Bank and Gaza Strip, the Arab League announced Tuesday.
The recommendation for subsidies was made by Arab foreign ministers meeting here late Monday in preparation for an Arab summit scheduled March 27-28 in Amman, Jordan, Arab League Secretary General Esmat Abdel-Meguid told reporters. It followed Palestinian complaints that Arafat's administration has seen little of the $1 billion in aid promised by Arab governments last October to support the Palestinian uprising against Israel.
Since that pledge, Arab governments have contributed funds to the Islamic Development Bank earmarked for the Palestinians, but have failed to come up with rules for using the money in the West Bank and Gaza.
With $230 million on deposit ostensibly to support the Palestinian cause, the Palestinian Authority still was unable to pay its workers last month, prompting U.N. and Western officials to warn that Arafat's government was effectively broke and at risk of disintegrating.
The $40 million-a-month payments still must be approved by leaders of the 22 Arab League states in Jordan. But the recommendations of the foreign ministers are likely to be accepted.
Along with shoring up Arafat's administration, the payments will undercut the economic pressure Israel has attempted to apply during six months of clashes.
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