From the diplomatic to the economic, in comes an announcement by the EU and the Palestinian Authority of an all-inclusive €28.3 million investment package aimed at rejuvenating the business ecosystem in Palestine, giving it impetus and much-needed capital in hard times.
The flagship initiative today was announced in connection with the 7th meeting of the EU-Palestine Investment Platform as an act of strategic commitment toward economic empowerment and sustainable development in the occupied Palestinian territories. Organized in the Office of Palestinian Prime Minister Mohammad Mustafa, it brought together a powerful blend of Palestinian officials, European diplomats, private sector heads, and banking experts.
Under the framework of the Palestinian Financial Sustainability Initiative, this investment is composed of rather sophisticated financial instruments: the €16-million EU guarantee facility and the €12.3-million EU grant were designed hand in glove to meet the highly particular economic challenges faced by Palestinian businesses.
The main goal of this initiative is to provide critical financial lifelines to micro, small, and medium enterprises, with a focus on those located in the most economically vulnerable regions, which include the Gaza Strip and East Jerusalem, as well as the economically important Area C, which has always been subject to economic instability and very limited access to financial resources.
In a relevant sense, Alexandre Stutzmann, the ambassador of the European Union to the Palestinian Authority, stated during the announcement: “It is more than a financial intervention. It is a concrete step toward empowering the Palestinian private sector and creating pathways for economic recovery.”
Saying that, Stutzmann has a very wider perspective over the issues with respect to the world. Economic assistance is indeed synonymous with sustainable development but true actualization of sustainable development is anchored on a more complex political settlement. It was a subtle comment about how economic assistance goes hand in hand with the political challenges in the area.
The partnership of the European Union with the European Investment Bank (EIB) along with the Palestine Monetary Authority is attempting to commit all three partners over a common approach for economic development leveraging financial guarantees, grants, and partnership in order to create a more solid economic infrastructure.
This investment could be a definitive opportunity for Palestinian businesses located in mainly disadvantaged areas. The guarantee facility is expected to facilitate access to credit, whereas the grant component could directly support business creation, infrastructure, and development strategies.
The timing of such investments is crucially important. Palestinian businesses struggle to survive through political uncertainty, paralyzing isolation, and scant resources. A EU guarantee may open up a plethora of opportunities and support to entrepreneurs or small business owners wishing to build an economic base and improve the economic outlook.
As the program transfers from announcement to implementation, eyes will be glued to all the stakeholders across the Palestinian territories. The eventual success of this investment could be a point of reference for designing and using targeted financial support to effect structural economic resilience and growth in a difficult geopolitical environment.
This package of 28.3 million euros stands testament to international commitment to economic development-that quite strategic short-financial tools could give meaning even in the direst contexts.
