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Palestinian Investment Fund Needs Reform

The Palestinian Investment Fund, established in 2003 to bring transparency to the Palestinian Authority’s assets, may also be promoting monopolies.
A Palestinian man waits at a counter to make a withdrawal at the Housing Bank for Trade & Finance in the West Bank city of Ramallah January 22, 2013. A central bank in the making, the Palestine Monetary Authority (PMA) is a rare bright spot as the economy of the Palestinian territories struggles with Israeli sanctions. Enforcing on Palestinian banks a regimen of conservative lending that has kept bad loans minimal and guaranteed liquidity, the PMA's technocratic prowess is the pinnacle of a Palestinian driv
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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.

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