World Bank Group to Facilitate Investment into West Bank and Gaza
WASHINGTON, DC, November 5, 2008—The World Bank Group today announced the launch of a new trust fund to encourage investors to increase investment in the West Bank and Gaza. The fund is co-sponsored by the European Investment Bank, the Government of Japan, and the Palestinian Authority, and will be administered by the Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group.
Merza Hasan, Executive Director for Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Maldives, Oman, Qatar, Syria, United Arab Emirates, and Yemen, is heading the World Bank Group delegation to the launch. The delegation also includes James Bond, Acting Executive Vice President and Chief Operating Officer of MIGA, and Daniela Gressani, the Bank’s Regional Vice President for the Middle East and North Africa region.
“Encouraging greater integration of Arab countries with the global economy—critical for creating jobs and opportunities for the people of the region—is an important initiative of the World Bank Group,” said Merza Hassan. “The Bank’s work in West Bank and Gaza is consistent with its Arab World Initiative and aims to support economic recovery and development as an underpinning to the peace process in the Palestinian Territories.”
During the first quarter of 2008, unemployment in the West Bank rose from 17.7% in 2007 to 19%, while unemployment in Gaza increased slightly from 29.7% to 29.8%.
“Investment is key to creating jobs and reducing unemployment,” said Daniela Gressani. “But the security situation in the area, and especially movement and access restrictions, presents grave obstacles to investment.”
The West Bank and Gaza Investment Guarantee Trust Fund will address these challenges by helping MIGA to issue guarantees that will allow investors to recoup their investment if the security situation deteriorates to the point where they cannot operate. MIGA’s guarantees will cover investments from both foreign and domestic sources for new projects, as well as expansions and privatizations of existing projects in the area.
“The private sector generates wealth, creates opportunities and employs more people than any other sector. Supporting them is particularly important, given the high unemployment rates in the West Bank and Gaza,” said James Bond. “We hope that MIGA’s participation will give many private investors the confidence to go ahead with investments in the region,” he added.
MIGA’s guarantee program helps reduce the noncommercial risks to an investment, providing investors with the support they need to open shop in a developing country. The agency’s presence usually signals to the private sector that the investor’s rights will be respected, an advantage inherent in the agency’s organization as an association of 173 countries, and as a member of the World Bank Group.