Palestinian Authority teeters toward shutdown

RAMALLAH, West Bank, June 8: Nader Khatib works as an accountant for the Hamas-led Palestinian government in the morning and moonlights as a plumber in the afternoon, fixing taps and pipes to make ends meet.

Although he has not been paid since March and has little to do there, he still shows up at the Ministry of Public Works for a few hours. A government union says 60 per cent of civil servants no longer turn up for work.

The wheels of the Palestinian Authority's infrastructure are grinding to a halt since Israel and the West cut assistance and tax transfers to the aid-dependant government over militant Islamist group Hamas' refusal to recognise the Jewish state.

Ministries are providing fewer services. Those that do offer services have no money for basic items, like stationery. Doctors at government-run hospitals have cancelled routine operations.

''I have to work after hours just to survive,'' said Khatib.

Raed Hammad, another government accountant, said he struggled to find the 2 dollars needed to travel from his village to his job in the West Bank city of Ramallah, the headquarters of the Palestinian Authority. He works in a restaurant at night.

''The Palestinian Authority is collapsing. Even if we show up at work, there's nothing for us to do. I will soon stop coming to the office,'' he told Reuters.

Since it was set up under the 1993 Oslo peace accords, the Authority has needed foreign help to stay afloat.

It employs 165,000 people, whose salaries support a quarter of the Palestinian population of 3.8 million dollars people in the occupied West Bank and the Gaza Strip, a thin poor coastal territory from which Israel withdrew troops last year.

Hamas took over the Authority in March after beating the long-dominant Fatah movement of moderate President Mahmoud Abbas in January elections. Despite the embargo, it has refused to soften its stance toward Israel, which it seeks to destroy.

Abbas this week set the stage for a showdown with Hamas by moving closer to a referendum, expected in July, on a proposal for statehood that implicitly recognises Israel. Hamas has rejected the document.

IDLE AND FRUSTRATED

As the political stalemate drags on, the machinery of government is slowly creaking to a halt.

Officials say ministries have put on hold any projects that require funds from the Finance Ministry. Others said property deals were not being registered.

Palestinian government workers who do show up in the morning said they sit at their desks, read newspapers, chat with colleagues and then leave around noon, bored and frustrated.

Computers are turned off, fax machines and copiers have no ink or paper.Some workers who have stopped showing up have locked their offices. Desks are piled with unfinished paperwork.

Some employees said they were coming to work because they feared retribution from Hamas ministers if did not or because they had nothing better to do. Around 60 per cent of the Authority's staff are affiliated with Fatah. The government has warned absent employees of penalties. Cabinet spokesman Ghazi Hamad said workers who did not provide a good reason for their absence would face legal action.

''The government will consider the cases of those who can't afford transportation costs or because of the closures,'' he said, referring to Israeli checkpoints in the West Bank that can prevent workers from getting to their offices.

The crisis goes beyond the economy. The inability to pay wages and a power struggle between Hamas and Fatah have sparked fears that internal tensions could spiral out of control.

''The Authority has not collapsed yet, but if this continues for another two months, the crisis will be suffocating,'' said Palestinian political analyst Ali Jarbawi.

TALES OF HARDSHIP

Many workers' lives have already nearly collapsed.

Widow Um Mahmoud, 43, used to earn 500 dollars a month. She first sold her gold, then her furniture before turning to relatives.

''I have nothing left to sell. I don't know what to do, I'm desperate. Hamas' charities refuse to give me money because I'm not a Hamas member,'' she said.

Some local banks made payments to the lowest paid workers this week, mainly from their own funds to avoid Western sanctions for dealing with Hamas, a group viewed by the United States and the European Union as a terrorist organisation.

But the transfers of 13 million dollars were a fraction of the 360 million dollars in wages owed.

''The crisis is not over,'' said Palestinian Finance Minister Omar Abdel-Razek.

The cash-crunch has weakened an economy already reeling from years of conflict with Israel, mismanagement and corruption.

The Quartet of West Asia mediators -- the United States, Russia, the EU and the United Nations -- is putting together a mechanism to provide direct aid to the Palestinians. But diplomats expect any aid to initially only go to health workers.

Frustrated employees, including members of the 70,000-strong security services, have taken to the streets demanding wages. In Gaza last week, security personnel vandalised parliament, and some say they have contemplated robbing stores and homes.

''I'm leaning on my brothers, but for how long? I have mouths to feed,'' said a junior security officer who only gave his name as Mohammad.

''I can't look my hungry children in the eye. Where's our dignity? They're turning us into beggars and thieves. One day, very soon, I may have to steal.''

REUTERS