Objective: To provide political risk insurance products/solutions to help reduce identified impediments to foreign investment in Gaza and the West Bank. This model could then serve as a template for encouraging investment in other politically sensitive emerging markets.

Commitment: The Center for American Progress, Fried, Frank, Harris, Shriver & Jacobson LLP, The Portland Trust (London) and other individuals commit to design a political risk insurance product that if available would allow companies to take advantage of commercially attractive investment opportunities in the Gaza Strip/West Bank while minimizing the threat of specific political risks unique to the region. It should be noted that currently traditional political risk insurance products may not adequately address the unique needs of foreign investors in this region.

Background: Jobs and economic opportunity are among the most important elements to establishing law, order, stability and security for Palestinians, a better future for the peoples of the region, and a more secure world. The level and nature of political violence in Gaza and the West Bank and the extent to which business development and commercial traffic has been affected by it prompted this effort. By creating and offering a new political risk insurance product we aim to reduce identified impediments to certain types of foreign direct investment. In creating such an insurance product, we seek to encourage additional investors, particularly in small and medium size enterprises in specific sectors in the Palestinian territories. With increased investor pressure, we anticipate greater responsiveness from government actors in addressing infrastructure issues that have impeded investment previously. We also see benefit in increasing the number and nature of non-governmental individuals and organizations, including those willing to put capital at risk, invested in working to resolve the Israeli-Palestinian conflict.

With its domestic and international insurance industry and regulators, the Center for American Progress and its partners, who have worked on political risk insurance efforts at OPIC and World Bank/MIGA, are well suited to manage and organize the project Moreover, the working group co-led by partner organizations Fried, Frank, Harris, Shriver & Jacobson LLP, and The Portland Trust (London) combines legal, investment banking, private equity and insurance industry reach that ensures access to the full range of expertise needed.

Update:
December 2005:
Initial discussions with Palestinian Authority officials and Palestinian business leaders about the potential for such insurance product.

March 2006:
Met with individuals developing banking loan guarantee programs, and with Overseas Private Investment Corporation (OPIC) and World Bank/Multilateral Investment Guarantee Agency(MIGA) personnel to explore private-public partnership opportunities. We are now working to finalize a blue print for how a partnership facility that would administer a special political risk insurance fund for the West Bank/Gaza would be structured. We continue discussions with Palestinian business people and outside investors to better assess market’s political risk insurance design needs. We also met with potential investors at a conference in Doha to reassess investment climate and project interest in post Palestinian legislative election climate, and readjust project goals, timetables, and objectives accordingly.

March 2006: Met with individuals developing banking loan guarantee programs, and with Overseas Private Investment Corporation (OPIC) and World Bank/Multilateral Investment Guarantee Agency(MIGA) personnel to explore private-public partnership opportunities. We are now working to finalize a blue print for how a partnership facility that would administer a special political risk insurance fund for the West Bank/Gaza would be structured. We continue discussions with Palestinian business people and outside investors to better assess market’s political risk insurance design needs. We also met with potential investors at a conference in Doha to reassess investment climate and project interest in post Palestinian legislative election climate, and readjust project goals, timetables, and objectives accordingly.