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OPEC Fund for International Development
17 May 2001
OPEC FUND AND PALESTINE SIGN INVESTMENT ENCOURAGEMENT AND PROTECTION AGREEMENT
Vienna, Austria, May 17, 2001
An agreement for the encouragement and protection of investment has been signed between the OPEC Fund for International Development and the Palestinian Authority. Drawn up within the framework of the Fund’s
Private Sector Facility
, the convention was initialed by H.E. Mr. Faisal Aweidah, Ambassador of the Palestinian Mission in Austria, and by H.E. Dr. Y. Seyyid Abdulai, Director-General of the OPEC Fund.
Private Sector Facility
is a financing window, endowed with its own resources, through which the Fund channels support
to the private sector in developing countries. The objectives of the Facility are to promote economic development by encouraging the growth of productive private enterprise and supporting the development of local capital markets. Under the Facility, loans are made to financial institutions for on-lending to small, medium and micro-enterprises, as well as directly to specific projects. Equity participation in private enterprises is also undertaken, either directly or through country or regional investment funds. As a pre-condition to such investment, the Fund requires signature of a standard agreement with the country concerned for the encouragement and protection of investment. Recognized as a gesture of trust and confidence, the agreement accords the OPEC Fund the same privileges as those normally given to international development institutions in which the country holds membership.
Palestine has a population of 2.8 million people, growing at a very high rate. GNP per capita was estimated at approximately US$1,800 in 1999, owing to the large inflow of remittances from Palestinian workers outside Palestine and international aid. The degree of poverty contrasts with positive social indicators. The health level of the Palestinian people is favorable, with low infant mortality and better than average life expectancy. Literacy levels are also high, with more than 95% of all school-age children receiving formal education. The country’s private sector continues to grow, and the government has encouraged foreign private investment by providing many concessions to the domestic private sector as well as to joint ventures with foreign investors. Recent developments in the Palestinian economy have been driven by two major sets of events: the rapid emergence of public institutions, and the political and security situations, which have particularly caused severe economic disruptions