“YOU CAN DO BUSINESS IN PALESTINE” WWW.PIC-PALESTINE.PS

PIC-Pal e s t in e 2008 In the news

IN THIS ISSUE

PAGE 1LETTER FROM THE CEO AND PROGRESS REPORTDr. Hasan Abu-Libdeh speaks of conference developments, from road shows to invitees and project development.

PAGE 2 SECTORS AT A GLANCEThis issue of the PIC-Palestine 2008 newsletter highlights two of the most promising sectors in the Palestinian economy: ICT and tourism. Learn why these two sectors have investors interested.

PAGE 3SAFEGUARDING YOUR INVESTMENTSSee how investments are being guaranteed in Palestine.

PIC-PALESTINE NEWSLETTER ISSUE N. 2 MAY 3 2008

PIC-PALESTINE 2008 “Partners for Change”

Letter from the CEO

Partners for Change in Palestine Dear Investors:

The Palestine Investment Conference continues to work towards making the first investment conference of this magnitude in Palestine a success. Already PIC-Palestine has garnered considerable international, regional, and local support, and has made impressive progress on many fronts.

In April we took PIC-Palestine on the road. We met 230 Jordanian business leaders in Amman on 5 April. Jordanian Minister of Trade and Industry, HE Amer Al-Hadidi, offered his full support for PIC-Palestine, while many prominent Jordanian business leaders learned of investment

opportunities in Palestine. An April 15 road show in Abu Dhabi presented PIC-Palestine to the UAE business community. In attendance were HE Tony Blair, Middle East Envoy to the Quartet, UAE Foreign Minister Abdullah bin Zayed Al Nahyan, UAE Minister of Foreign Trade Lubna Al Qasimi and Palestinian Tourism Minister Kholoud Daebis. Foreign Minister Nahyan offered the full support of the UAE government and private sector to the Conference.

This process has reflected well on the invitations process. We have invited over 1 5 0 0 b u s i n e s s l e a d e r s f r o m t h e international and regional community to date. Almost 600 business leaders spanning four continents have registered, the majority from Jordan, the Gulf States, Europe, and North America.

Finally, we have received exceptional applications for local business projects and are now in the process of selecting those that will be presented at the conference.

As the Conference approaches, we are more and more confident that it will be a historic success, inaugurating a process of increased international and regional investment in Palestine.

Warm Regards,

Dr. Hasan Abu-Libdeh

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24%

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Jordan GulfEurope North AmericaOthers

PIC-Palestine OfficeJaffa Street, al-Kharraz Building

Ramallah, Palestine

Tel: +970 or 972 (2) 295.8418Fax: +970 or 972 (2) 295.8419

“YOU CAN DO BUSINESS IN PALESTINE” WWW.PIC-PALESTINE.PS

Connecting

Digital Bridge to the FutureINFORMATION AND COMMUNICATION TECHNOLOGY

The ICT sector is a prime example of a Palestinian private-sector success story. ICT finally had the chance to develop with the establishment of the Palestinian National Authority (PNA) in 1994. The sector is now growing rapidly; since 2000, it has maintained an annual growth rate of 25-30%.

This impressive growth rate stems from demand for ICT products and services, and the private-sector has responded to fill this niche. The ICT sector in Palestine was 100% privatized in the late nineties with the establishment of the Palestine Telecommunications Company (PALTEL). Its subsidiary, Jawwal, made telecommunications services readily available for residents of Palestine.

Increased access to telecommunications services led to even greater demand. The number of telephone lines in Palestine more than doubled to 321,999 between 1998 and 2006, and Jawwal boosted its subscribers from 22,500 in 1999 to 821,800 in 2006. The Palestinian Central Bureau for Statistics (PCBS) reports that in 2006, more than half of all households in Palestine had a fixed telephone line, and more than 80% of these households had at least one person with a mobile phone.

Internet services are also increasing in availability and demand. PCBS reports that 32.8% of households in Palestine own a computer, and 15.9% have an internet connection at home. In March 2000, Palestine succeeded in obtaining its own country-code Top-Level-Domain “ps,” allowing the PNA to regulate the operation of the domain, making websites such as www.pic-palestine.ps a reality.

Investing in Palestine’s TreasuresTOURISM

The tourism sector in Palestine is teeming with potential. Being central to the three Abrahamic religions, Palestine contains many of the most important religious and archeological sites in the world. The Dome of the Rock and the Church of the Holy Sepulcher in Jerusalem, the Nativity Church and Rachel’s Tomb in Bethlehem, the Tomb of the Patriarchs in Hebron, and the oldest city in the world, Jericho, are only a few of the world-renowned tourist destinations in Palestine.

Investment is key to unlocking the potential of the tourism industry in Palestine. For example, the millennium celebration in Bethlehem was a milestone for the tourism industry. The restoration of tourism services and infrastructure through PNA, private sector, and donor investment in Bethlehem made the project a success, with political and religious leaders and thousands of pilgrims from around the globe attending the celebration.

Palestine not only has the potential to attract tourists from the West, should relations improve with neighboring Arab countries, Muslim pilgrims will have the opportunity to visit holy shrines in Jerusalem and Hebron during the annual pilgrimage to Mecca. With a comparably mild climate for the region, Arab and Palestinian workers in Jordan and the Gulf can also be expected to spend the summer months vacationing in Palestine.

The tourism sector in Palestine has attracted support from major world figures such as Quartet Envoy HE Tony Blair. During a press conference in November last year, Blair encouraged tourists to visit Bethlehem, assuring that it is a “safe and good place to come.” The sector’s contribution to GDP is expected to increase substantially as the political climate improves.

Sources: MAS Investment Guide 2008, www.pita.ps, PCBS

SECTORS AT A GLANCE

Each issue of the PIC-Palestine 2008 newsletter will draw

attention to one of the many core sectors in the Palestinian

economy, from agri-business and manufacturing,

to construction and finance. This edition will highlight in

detail two promising sectors in the Palestinian economy:

information and communication technologies (ICT) and

tourism. For more details and resources see our website at

www.pic-palestine.ps.

PIC-PALESTINE NEWSLETTER ISSUE N. 2 PAGE 2 MAY 3 2008

“YOU CAN DO BUSINESS IN PALESTINE” WWW.PIC-PALESTINE.PS

SAFEGUARDING YOUR INVESTMENTS

Every inves tment comes wi th calculated risk. It is no great secret that obstacles to investment exist in the Palestinian Territory. What is less known is that many p r o g r a m s s p e c i f i c a l l y i n s u r e foreign direct investment in this emerging market.

The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, was created in 1988 to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders, covering risks such as expropriation, breach of contract, currency transfer restriction, and war and civil disturbance.

I n 1 9 9 8 , M I G A b e c a m e t h e admin i s t ra to r o f a t r u s t f und established to encourage the flow of foreign direct investment into the West Bank and Gaza. The fund—the West Bank and Gaza Investment Guarantee Trust Fund—was sponsored by the European Investment Bank, the Government of Japan, and the Palestinian Authority.

MIGA and the donors recently held discussions on expanding the trust fund’s reach and applicability to make it more effective. The newly defined trust fund is expected to be launched in June 2008.

“By redefining the fund and making it more relevant to current conditions, MIGA will be able to facilitate new foreign direct investment into the Palestinian Territories,” said Nabil Fawaz, Operations Team Manager at MIGA. Foreign direct investors can play a critical role in reducing poverty—by building roads, providing clean water and electricity, and above all, creating jobs. But foreign direct investment into developing countries is often inhibited by concerns about political risks. This is where MIGA plays an important role. With the weight of the World Bank Group behind it, MIGA is able to encourage foreign investors to go into countries where they normally would not go and help their economies grow.

Since its inception, MIGA has supported nearly 600 projects in 96 developing countries, totaling $18.5 billion in coverage. MIGA’s gross exposure stands at $6.4 billion. Thanks to the trust fund, investors from any one of MIGA’s 172 member countries can now apply for guarantees from the agency to protect new cross-border investments destined for West Bank and Gaza.

MIGA’s trust fund is but one example of investment guarantee initiatives in the Palestinian Territory. As investment opportunities in the region increase, so do the activities of those who aim to secure those investments, bringing benefits to all.

*Dome of the Rock photos courtesy of Benoit Faiveley

PIC-PALESTINE NEWSLETTER ISSUE N. 2 PAGE 3 MAY 3 2008

PIC-PALESTINE 2008

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