PALESTINIAN AUTHORITY REVEALS $600 MILLION INVESTMENTS
By Maher Abukhater
Palestinian Minister of Finance Salam Fayyad revealed February 28 that Palestinian Authority (PA) assets at home and abroad and its cash deposits amount to US$ 600 million.
Revealing the results of a 345-page report prepared by the Los Angeles, California-based Standard & Poor’s (S&P) consultants and the Democracy Council, Fayyad stressed that publication of the report “is a major step forward” on the road toward full financial reforms.
He said: “I am pleased to present this report to the Palestinian people. We promised our people to publish the findings of the international consultants. Today, as promised, we are making public the consultants’ report. This is a major step forward. This exercise will continue until the valuation of all assets included in the report is completed."
Fayyad, who formerly served as country director in the Palestinian areas for the International Monetary Fund (IMF), became finance minister last June during a Palestinian cabinet reshuffle. His appointment was considered a result of US and international pressure who demanded that the PA carry out intensive financial and other reforms. Israel has also added to the pressure when it froze millions of US dollars in PA tax revenues and refused to release any amount without financial reforms first, in addition to other conditions.
Nevertheless, Fayyad rejected in a meeting with reporters in Jerusalem to announce the publication of the report the claims that reforms were carried out as a result of pressure insisting that it was part of the PA’s reform efforts as demanded by the people.
Fayyad, from the West Bank town of Tulkarm, has concentrated his efforts since assuming office to unification of all PA accounts into one fund managed by his ministry.
The Palestine Investment Fund (PIF) was established by decree from President Yasser Arafat on October 1, 2000 but did not become effective until August 2002 as part of the Palestinian reform plan. Its aims was “to acquire/invest, and to sell/dispose off Portfolio Investments, Liquid Investments, and Temporary Investments that promote economic growth and infrastructure development in Palestine,” according to a PIF release. “PIF also seeks to stimulate private sector investment, both domestic and foreign, to achieve sustainable long-term economic prosperity for Palestine,” it added.
“Its first task was to participate in the ongoing financial reform processes in Palestine. The PIF took on the responsibility of valuing and announcing all public assets and investments held by the Palestinian Authority to provide the most independent and transparent account to date of Palestinian public financial holdings,” said the release.
Fayyad chairs the PIF’s 7-member board of directors, which includes four members from the private sector, one of whom is Palestinian businessman Munib Masri who serves as deputy chairman, in addition to Palestinian officials. The PIF director general is Muhammad Rashid (also known as Khaled Salam), who runs the Palestine Commercial Services Company (PCSC), the PA’s investment arm, which owns the majority of PA investments at home and abroad.
S&P said it was able to evaluate 11 companies out of 79 by the time of writing the report and therefore its results were initial. It said it was still proceeding with efforts to evaluate more PA investments.
The largest PA investment was with Orascom Telecom Algeria, which amounted to $90 million. Another $50 million invested with Orascom Telecom Tunisia and more than $25 million invested in buying 11 million shares of Orascom Telecom, according to S&P report. Jordan Mobile Telecommunications Company (known as Fastlink) was partially owned by the PA with more than $66 million investment, or 14.29% of the company shares.
The PA also fully owns a cement company with $54 million investment and therefore has monopoly over marketing this important product in the Palestinian areas, which has prompted some critics to accuse the PA of corruption.
The S&P report also showed that the PA has almost $74 million in cash deposits in several banks around the world. “Now we can say what investments we have and how much and put an end to all rumors and speculations,” said Fayyad, adding: “There was enough damage done already.”
Fayyad last month won a first time overwhelming majority support for a PA budget when he presented a $ 1.27 billion budget to the Palestinian Legislative Council.
He has promised then that all PA funds and financial transactions will be done openly and transparently, stressing that the money belongs to the people and therefore the people should know where it goes and where it comes from.
Fayyad’s name has also came up as a possible candidate for a new prime minister post in the PA even though he has denied these report and said he was not interested in the post.
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