JERUSALEM, May 8: The donor-starved Palestinian Authority may cease to function if government employees continue to go without salaries for much longer, the World Bank warned in a new report released on Monday. Civil servants will simply down tools, and discipline in the ranks of the security services could well collapse if pay cheques, which have not arrived for the last two months, are not forthcoming, the Washington-based body said.

The European Union and United States have both frozen aid payments to the Palestinian Authority since Hamas took power over its refusal to renounce the use of violence or accept Israel’s right to exist.

Israel has also stopped handing over customs duties it used to collect on behalf of the Palestinian Authority, worth around 60 million dollars a month.

A previous report by the World Bank last month had warned that the Palestinian economy would experience a dramatic decline with incomes decreasing by 30 per cent and unemployment doubling by the end of the year.

But even those dire projections ‘now appear too rosy’, the new survey said.

“If the PA (Palestinian Authority) remains unpaid/minimally paid for several months, it may cease to function,” the report said.

“Complex structures such as school systems are not machines to be switched on and off at will,” the report said.

“A protracted period in which the PA is disabled might result in the unravelling of a dozen years of donor efforts to build the responsible, accountable institutions needed for a future Palestinian state or for continued governance.”

The World Bank said there was already evidence the security forces were prepared to take the law into their own hands in order to force the authorities to hand over cash.

“Non-payment, part-payment or unequal payment of salaries could precipitate breakdowns in force discipline in the security services,” said the report.

“A deteriorating security environment could make it difficult for government, commerce and relief efforts alike to operate properly.”

The report reiterated warnings from the UN and aid organisations that a humanitarian crisis loomed in the Palestinian territories.

It said food and gasoline shortages are already emerging in Gaza as a result of prolonged Israeli enforced border closings.

With more than 160,000 on the government payroll, one in three Palestinians is dependent on state salaries.

“We agree with the World Bank,” said Palestinian planning minister Samir Abu Eisheh. “If we don’t get money soon we face a real disaster.”

Palestinian Authority president Mahmud Abbas also called for the resumption of aid to the government in a letter on Monday to the Middle East quartet which comprises Russia, the United Nations, United States and European Union.

“The payment of aid and financial support for the Palestinian Authority should resume in order to avoid a real humanitarian crisis,” the moderate Abbas was quoted as saying in the letter.

Israel has called claims of a humanitarian disaster exaggerated, but the World Bank said Israel risked becoming the target of Palestinian anger as the plight of citizens in the West Bank and Gaza became ever harder.

“The dominant popular response to intense economic pressure in 2001-2 was anger at Israel as the perceived agent of economic distress, not rejection of the violence that Israel was acting to prevent,” it said.—AFP