The Palestinian Investment Fund (PIF) is a sovereign fund for the Palestinian Authority (PA) intended to manage PA investments inside and outside Palestine. The PIF was established in 2003 to satisfy the international community’s request that then President Yasser Arafat promote transparency and declare the PA’s properties and investments. At the time, it was interpreted as an attempt by donor countries to reduce Arafat’s powers, restrict his control over public money and constrain his freedom in spending funds from outside the budget. Arafat was accused of running non-registered investments to spend on military matters and misallocating some aid from donor countries intended for refugee camps in the diaspora, especially in Lebanon.

The Western demands included establishing the post of prime minister and the appointment of a finance minister to manage public money. Salam Fayyad, who comes from outside the Palestine Liberation Organization (PLO), became the first PA finance minister.

The PIF was established by a presidential decree that stipulated that the fund be placed under the supervision of the Finance Ministry. So, Fayyad assumed the presidency of the fund and he appointed Mr. Khalid Salam (Mohammad Rashid) — Arafat’s economic adviser — as the fund’s general manager. All PA property and assets at home and abroad were placed under the fund’s supervision. For example, the PA’s share in the cellular networks in Tunisia, Algeria and the Gaza Strip — from which Israel withdrew in 2005 — as well as the PA’s stakes in telecommunications, electricity, real estate and other sectors were added to the fund. A few months after Arafat’s death in November 2004, the fund’s management was passed from Salam to Fayyad, who managed the fund for a very short time.

When Hamas won the January 2006 elections and formed its government, there was a tug between Hamas and Fatah-PLO over who would control PA institutions: the government, that is, Hamas, or the presidency, that is, Fatah-PLO?