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Press release 11 August 2011
Ministry for Foreign Affairs
Sweden to contribute SEK 40 million to the Palestinian Authority
Sweden is to contribute SEK 40 million this year via the EU financing mechanism PEGASE (Palestinian-European Mechanism for Management of Socio-Economic Aid) in direct support to the Palestinian Authority. The support will go towards salaries and pensions for employees in the Palestinian administration.
"The Palestinian Authority has made great progress in its state-building efforts and I think it is important that Sweden continues to support their work", says Minister for International Development Cooperation Gunilla Carlsson.
The financial situation for the Palestinian Authority is at present serious and that is why Sweden has decided to allocate another SEK 40 million to help the Palestinians to pay salaries. The Palestinian Authority suffers a constant budget deficit. Although if economic growth in 2010 was estimated to be about 9 per cent, this growth is aid-driven and consequently not sustainable. Sustainable growth would require the removal of obstacles to economic activity and of Israeli restrictions on mobility and accessibility.
Sweden has been providing direct support to the Palestinian Authority since 2006. The current strategy stresses that direct support is necessary to enable the Palestinians to meet their day-to-day expenses in the short and medium term. In total SEK 200 million has been channelled via the European Commission's PEGASE mechanism. The objective of direct support is to enable the implementation of the Palestinian development plan and state-building efforts. At the major donors' coordination meeting (Ad-Hoc Liaison Committee) in April the Palestinian institutions were assessed as fulfilling the requirements for a functioning state.
PEGASE is the European Commission's financing mechanism aimed at ensuring that development assistance funds do not benefit Hamas or other organisations on the terrorist list.