All projects by the US international assistance agency in the Palestinian territories funded under its 2011 budget have been halted, the minister of economy in the West Bank said Friday.
Hasan Abu Libdeh said funding for USAID projects stopped after the US Congress blocked transfer of some $200 million in funds in August. Implementation will continue for a few weeks until the funds run dry, he said.
The project freeze relates to funding for infrastructure work, specifically for “roads, water, health and other projects related to building the capacities (of the Palestinian Authority),” Abu Libdeh told Ma’an.
Dozens have already lost their jobs related to projects earmarked for blocked funds, he said.
US lawmakers put a hold on the aid in September after President Mahmoud Abbas went ahead with his bid for membership of the UN despite US and Israeli opposition.
A US official told Ma’an that USAID had not halted its programs.
“We are working with the Congress to remove Congressional holds with respect to the release of (the 2011 financial year’s) assistance for the Palestinians,” the official said.
“The lifting of the holds is necessary for programs to continue as planned. Ongoing programs will continue until funds are exhausted.”
US officials are in “frequent contact with our Palestinian partners to explain the holds on our assistance and their implications for our programs in the West Bank and Gaza,” the official added.
The Obama administration is exerting huge efforts to overturn the freeze on funds, officials say, and Israel has also warned that it supports continued aid to the Ramallah-based Palestinian government.
“We think it is money that is not only in the interest of the Palestinians, it is in US interest and it is also in Israeli interest and we would like to see it go forward,” State Dept. spokeswoman Victoria Nuland said.
Abu Libdeh, the minister, said he was officially informed of Congress’ move by a senior USAID delegate, and that it was unclear whether there will be US government funding for Palestinian projects in 2012.
The PA, which exercises limited rule in parts of the Israeli-occupied West Bank, has often failed to pay its 150,000 employees on time and in full and remains reliant on foreign aid to fill a deficit projected at $900 million this year.
The International Monetary Fund and the World Bank say that financial problems threaten the state-building program overseen by Salam Fayyad, the prime minister in the West Bank.
The 27-member European Union, the PA’s single biggest funder, has said that it will continue funding the West Bank government.