As the Palestinian Authority faces some of the hardest choices in its history regarding relations with Israel, membership in the United Nations and unity with Hamas, it is mired in a severe economic crisis, leading many here to a sense of foreboding and despair.
More than 150,000 state employees, whose salaries support a million people, had their wages cut in half this month. Palestinian banks have lent the government more than $1 billion and do not want to lend more. Some ministries have temporarily lost electricity because they have not paid their bills. Last week, the government ordered a reduction in the price of bread, leading to bakery strikes. Garbage is piling up.
The Muslim holy month of Ramadan starts next week; nightly family gatherings and a three-day holiday mean that spending will double. Many people already have large bank loans. September will bring bills for educational fees and school supplies; the olive harvest, when Israeli settler violence is expected to increase; and a likely diplomatic showdown at the United Nations.
And you thought the US Congress had some tough decisions to make!
