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The PNA Introduces Changes to Improve Financial Transparency and Accountability
Palestinian President Yasser Arafat is expected to give his finance ministry greater responsibility within the next month, as part of his efforts to enhance transparency and accountability partly deflecting criticism - from both within the Palestinian community and from international donor nations - and mainly to respond to changes affecting the Palestinian economy.
The steps, issued in a presidential decree on Tuesday, include transferring responsibility for all PA tax revenue to the treasury , as well as putting the ministry in charge of the public sector payroll, which until now had largely been handled directly by the President.
President Arafat also plans to impose strict monitoring on the operations of PA monopolies by recruiting an internationally recognized accounting firm to regularly audit the books of PA monopolies.
Sources from international donor countries say that President Arafat is serious about implementing the steps, which donor countries and many Palestinians considered essential in order to reduce financial irregularities and assure continued international aid.
Until now, much revenues were not included in its budget. For example, Israel has transferred payments due to the PA for duties and taxes Israeli authorities collect from Palestinians into a bank account handled directly by President Arafat. Revenue from PA monopolies have also flowed directly into that bank account.
President Arafat's decree also orders the establishment of a Supreme Development Council, to monitor revenues to the treasury and oversee the PA's foreign debts. This Supreme Council will be headed by President Arafat. Other members are ministers of finance, planning and commerce. The council's coordinator is to be President Arafat's economic advisor Muhmad Rashid.
The decree also establishes an "investment fund" that is to brief the Supreme Development Council on the operations of PA monopolies, and determine the level of their operations. Its tasks include preparing a proposal to privatize some of the monopolies.
Sources from international donor countries believe the PA is subject to stringent monitoring from the International Monetary Fund and the World Bank. They add that, in the course of meetings in recent months between PA representatives and the World Bank, President Arafat is aware of the international concern regarding the PA's current modus operandi.