Large Arab investment funds will funnel about $50 million into projects to ease the hardships of the Palestinians but the money will not go to the cash-strapped Hamas-led government, fund heads said today.
"We agreed to allocate 10 per cent of 2005's net profits of the funds to aid the Palestinian population," said Jasem al Manai, the managing director of the Arab Monetary Fund (AMF).
The AMF and four other Arab funds wrapped up a two-day annual meeting in the Moroccan city of Rabat with the decision to participate in an Arab drive to bail out the Palestinians hit by a Western aid cut over the radical Hamas group's rejection of peace deals with Israel.
The Hamas-led Palestinian government inherited $1.3 billion in debt. Israel has cut off $55 million in monthly tax transfers while the United States and the European Union have cut aid to the government unless it recognises Israel and disbands its military wing.
Banks are refusing to deal with the Palestinian Authority, fearing lawsuits by Washington which has prohibited any commercial dealings with Hamas government.
The funds was set up by Arab states to promote trade, investment and other economic cooperation within the Arab world in the hope of building a common market sometime in the future.