
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, March 30, 1991                   TAG: 9103300190
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-14   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE: TUNIS, TUNISIA                                LENGTH: Medium

PLO PAYING FOR PRO-IRAQ STAND

Faced with an 80 percent drop in funding after the Persian Gulf war, the Palestine Liberation Organization has been forced to close diplomatic missions, shut down propaganda newspapers, lay off workers and slash travel expenses, PLO leader Yasser Arafat said Friday.

Arafat, whose leadership is threatened by the financial crisis inside his organization, said the PLO's annual revenues have dropped from $300 million to about $40 million, mainly because of funding cuts by gulf states angered by his stridently pro-Iraq position during the war.

So far, Arafat said, the PLO has not had to cut key social programs - such as aid to families of slain PLO fighters or its extensive educational and medical programs - that are considered key to maintaining the organization's political strength in the Israeli-occupied West Bank and Gaza Strip.

But the strain of the economic pressures are obvious here at the PLO's headquarters, where representatives are struggling to find new sources of funds.

"We still believe that all the Arab states will come back to the PLO," said PLO economist Ahmed Kureah. "But if some prince doesn't pay us, we will go to other friends and ask for money."

Kureah, a former banker in Saudi Arabia who is Arafat's chief economic adviser, said the PLO has sought to save money by closing more than 20 of its 92 diplomatic missions around the world, shutting down PLO newspapers and magazines, laying off employees and imposing travel restrictions, including a ban on expensive hotels.

Saudi Arabia and Kuwait have made it clear they will not renew funding, nor reimpose an old 5 percent PLO "withholding tax" on Palestinians living in their territories, unless the PLO changes its leadership. According to Kureah, the "liberation tax" has provided the PLO with $62.5 million in annual revenue.

In addition, direct funding from gulf country governments exceeded $110 million, including $85 million from Saudi Arabia, before the gulf crisis began.

Despite the pressures, Arafat clings gamely to the job he has held for more than 30 years, insisting that as the elected leader of the PLO - technically, the chairman of its executive committee - he does not have the right to leave the organization.

by CNB