Arab banks are reluctant to transfer millions of dollars in desperately needed foreign aid to the Hamas-led government for fear of U.S. retribution, the Palestinian finance minister acknowledged Tuesday, confirming that Hamas is no closer to paying weeks-overdue government salaries.
Since the Hamas-led Cabinet was sworn into office last month, financial pressure by Israel and Western countries has left the government broke and unable to pay the salaries of 165,000 workers. Paychecks were due on April 1, and the next scheduled payday is less than a week away.
Hamas has turned to Arab and Muslim countries for help, but whatever money it has raised remains stuck in an account in Egypt, said Finance Minister Omar Abdel Razek. He said Arab banks that do business in the Palestinian territories are afraid to transfer the money, fearing they could be punished under U.S. Anti-terrorism laws.
Abdel Razek, a U.S.-educated economist, said the government is discussing the matter with Arab banks. "We hope to find a solution in the near future," he said. The Palestinian government needs about USD 160 million a month to break even, more than half of it from foreign aid.
Hamas has raised about USD 70 million so far from Iran and Saudi Arabia, he said.
He said the Saudis also have pledged an additional USD 70 million, while Iran has offered another USD 50 million.
"The money is available. The problem is getting it here," Abdel Razek said and added the funds have already been converted to euros to lessen the possible American connection.