Palestinian PM says willing to resign over economic protests

RAMALLAH Thu Sep 6, 2012 5:31pm EDT

Palestinian Prime Minister Salam Fayyad addresses a news conference after talks with Germany's Foreign Minister Guido Westerwelle in Berlin March 28, 2012. REUTERS/Tobias Schwarz

Palestinian Prime Minister Salam Fayyad addresses a news conference after talks with Germany's Foreign Minister Guido Westerwelle in Berlin March 28, 2012.

Credit: Reuters/Tobias Schwarz

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RAMALLAH (Reuters) - Palestinian Prime Minister Salam Fayyad said on Thursday he was willing to resign if the public demanded, after three days of street protests against high living costs across the occupied West Bank, but did not say that he was going to do so.

A fuel price increase of about 5 percent sparked the demonstrations in the Palestinian cities of Ramallah, Jenin and Hebron, where protesters burned an effigy of Fayyad, who presided over economic policy as finance minister until he was replaced in that role in May.

"If there is a real public demand that I resign, and if it would solve the economic problems, then I would not hesitate to step down, nor would I delay it," Fayyad told reporters in Ramallah.

Echoing slogans chanted in Arab Spring demonstrations, the crowds called for Fayyad to "Get out," and accused the former IMF official of corruption and of leading policies harmful to the poor.

The aid-dependent Palestinian economy in the West Bank is facing a deepening financial crisis due to a drop in assistance from Western and wealthy Gulf backers, as well as Israeli restrictions on trade.

The Palestinian Authority (PA) is grappling with a recurring deficit and external debt, both of about one billion dollars, or nearly a fifth of gross domestic product, and a fifth of the West Bank's 2.5 million Palestinians are unemployed.

The PA's cash crisis delayed salary payments for some 153,000 civil servants several times this year. Fayyad said he did not know when the money would be available to pay last month's salary.

Poor planning and continued, rigid Israeli controls have led to boom time Palestinian growth rates of 9 percent in 2010 to fall by half. A recent Palestinian poll found 72 percent of West Bank respondents thought the PA institutions were corrupt.

Palestinian President Mahmoud Abbas said on Wednesday the "Palestinian Spring has begun" and that the protesters' demands to reduce costs were "right and fair." He did not voice support for Fayyad in his remarks.

Fayyad has been widely credited by the West for introducing transparency to the Palestinian economy and for his efforts to ready Palestinian institutions for future statehood.

"Despite the fact that some of the (protesters') slogans hurt me deeply, freedom of expression is guaranteed," Fayyad said.

(Writing by Noah Browning; Editing by Jon Hemming)

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