The Palestinian authority is on the verge of financial collapse, with debts of 1.5 billion dollars
The Palestinian authority is on the verge of financial collapse, with debts of 1.5 billion dollars.
But scenes from Ramallah the capital of the Palestinian Authority. paint a different picture. New cars, swanky cafes, new buildings. Much of this is being paid for by loans. This Fatah member says he can’t make his mortgage payments. So how is it that all these fancy new buildings and new cars can be seen all over town. Ramallah real estate is considered a good investment.
There’s a billion dollars spent in building each year in the town. Apartments start at two hundred thousand dollars. How do people afford these luxury cars. Bank loans which sometimes cost half your monthly salary. Loans from Palestinian banks are apparently easy to come by. Personal loans have increased fivefold in the past two years and have reached around half a billion dollars.
Many Palestinian economists believe that its one big bubble destined to burst. s/u Dr. Nasar Tabuv is the director general of the Palestinian treasury. The Palestinian Authority’s fiscal reserves are running out. It can barely pay its salaries. If that happens, political stability will be in danger. Experts say the PA can last two to three months without paying its salaries, no longer. In this scenario, the big loser just might be Israel.