Supporting the Palestinian Business Sector: The Middle East Investment Initiative

".…in consultation with our partners in the Quartet — the European Union, Russia, and the United Nations — the United States is taking a series of steps to strengthen the forces of moderation and peace among the Palestinian people.”

– President George W. Bush

The Middle East Investment Initiative (MEII) will provide $228 million in loans to Palestinian small and medium-sized businesses to create jobs and economic growth, and catalyze private sector development and expansion. The Initiative was launched in Ramallah, the West Bank, on July 25, 2007, by Under Secretary of State Karen Hughes; President of the Overseas Private Investment Corporation (OPIC) Robert Mosbacher, Jr.; Berl Bernhard, Chairman of the Aspen Institute's MEII Board; and Palestinian President Mahmoud Abbas and Prime Minister Salam Fayyad.

Presidential Announcement

President George W. Bush announced his approval for the OPIC loan program on July 16, reiterating American support for the Palestinian people and outlining overall 2007 U.S. Government assistance that also includes $144 million to the United Nations Relief and Works Agency (UNRWA), $50 million through USAID for Palestinian basic human needs, food aid, and democracy, civil society and private sector development, $10 million in P.L. 480 Food Aid, and $80 million to help reform the security services of the Palestinian Authority. This is in addition to nearly $130 million in already planned USAID programs.

The President noted that the Middle East Investment Initiative would complement efforts by the Palestinian Authority “to improve the economy and unleash the natural enterprise of the Palestinian people.”

Initiative Funding

The MEII loan fund will use resources from OPIC and the Palestine Investment Fund (PIF) to leverage the $228 million in loan money. MEII, which was under development with the Aspen Institute for 2 years, will administer the program and has designated CHF International as its coordinating agent, working directly with local banks. The Norwegian Government has contributed $5 million toward overall operating expenses.

Palestinian Recipients

The Initiative will provide affordable, longer-term loans to small and family-owned Palestinian businesses that would otherwise not have access to them. These might include an olive grower who wants to expand operations, a young person with a small information technology company, or someone who wants to hire neighbors to produce and export Palestinian embroidery.

Loan Administrators

The loans will be administered by participating Palestinian Private Financial Institutions (PFIs) and guaranteed by OPIC and the Palestine Investment Fund. PFIs will include commercial banks, microfinance institutions, and non-governmental organizations.