- Published on Thursday, 14 June 2012 12:40
Palestinians have been striving for years to draw investments to despite struggling under Israeli occupation in order to improve economic conditions in their country and support the needs of citizens.
Most recently, Palestinian economist, official bodies, and other experts have invited regional Arab banks to open branches in the Palestinian territories in order to strengthen their economy and promote foreign investment opportunities.
The importance of such investments, according to Birzeit University economics professor Dr. Nasr Abdel Karim, lies in the need for Palestine to reintegrate with Arab economies, which he calls a "strategic choice" based on Palestinians seeing themselves as a part of the Arab world. Abdul Karim said that it is especially important for Palestinians to creature programs and funding schemes for economic projects, large or small, as not only is the country struggling with funding, but also faces the double challenge of poverty and unemployment, which average 20% and 35% respectively. Additionally, economic investment in Palestine will reduce the country's dependency on its Israeli counterpart.
According to Abdul Karim, investing in Palestine could prove to be very advantageous for banks, adding that he believed that the true influence of these banks lies in micro-investment projects and micro-finance, which have raised the proportion of lending in the banking system from 28% to 55%. The runaway success of these projects have contributed to sustainability of these institutions.
He also explained that the Monetary Authority has provided a banking environment to encourage such investments. It has also developed a system of adjustments the mechanism of electronic connections between banks, in addition to a database of credit has made every citizen a number of credit which contributed to reduce the risk to banks. This has lead to a significant increase in lending.
For his part, the governor of the Palestinian Monetary Authority, Dr. Jihad al Wazir, has said that the banking system in Palestine has achieved significant gains in recent years, and that there are 16 banks, local, Arab, and foreign, working in Palestine.
He believed that there is a possibility for the Palestinian economy to achieve growth of GDP between 13% and 14% over the next several years if the rule of the occupation is lifted, noting that there is great potential benefit to the investors in the event that Palestinian statehood is achieved.
In a statement published by a local Jerusalem newspaper, Palestinian financial analyst Basem Makhoul stated that he believes that this demonstrates the safety of investing in the Palestinian banking sector.