Clinton Global Initiative Commitment to Offer Innovative Political Risk Insurance to Palestinian BusinessesMay 22, 2008
Bethlehem, West Bank — An agreement signed today will create a new type of risk insurance product to meet the needs of the Palestinian business community, encourage investment, and sustain and create jobs. The idea was born on the plenary stage at the first Annual Meeting of the Clinton Global Initiative (CGI) in September 2005, and taken to the next level at the 2007 CGI Annual Meeting.
Through the agreement, which was signed today at a Palestinian business investment conference in Bethlehem, the Palestinian Political Risk Insurance Project (PPRI) will establish a facility funded by public and private capital that will include the Overseas Private Investment Corporation (OPIC) and the Middle East Investment Initiative (MEII), an independent nonprofit organization initiated by the Aspen Institute. PPRI will provide affordable political risk insurance covering trade asset damage resulting from political violence.
Initially, OPIC will partner in the facility with MEII, to reinsure the National Insurance Company (NIC), a local Palestinian insurance company, for $5 million in political risk insurance that the NIC is providing to small businesses. MEII will provide essential technical assistance including marketing, monitoring, and underwriting guidance. Ultimately, the PPRI’s capacity is expected to grow to $20 million. When fully executed, if insured exporters grow by just 10% per year, this new type of insurance product could facilitate over $400 million in exports from the Palestinian territories.
Both MEII and NIC were active members of the PPRI steering committee, led by the Center for American Progress, along with AIG, and others.
“The Palestinian Political Risk Insurance effort is what the Clinton Global Initiative is about. We have Palestinians, Americans, Europeans, Israelis, insurance experts, business people, lawyers, financial sector specialists, regional specialists, all contributing their time, energy, and resources to meet this challenge and make a difference in this very important part of the world,” said President Bill Clinton.
“Following the announcement of the PPRI at the 2007 CGI Annual Meeting, I had the opportunity to discuss it with President Bush because I thought implementing a risk insurance program like this would make an important contribution to progress so critical to ultimately achieving reconciliation. I was pleased to hear that President Bush shared his support for this effort with key members of his economic team, including the President and CEO of the Overseas Private Investment Corporation, Robert Mosbacher, one of the signatories of today’s agreement,” President Clinton added.
Berl Bernhard, chairman of MEII who signed the agreement along with Mosbacher said, "In the Palestinian territories, risk mitigation instruments are especially important to help encourage investment, grow the economy, and create jobs. A stronger economic base is critical for social and political stability. MEII looks forward to partnering with NIC and OPIC in developing this new risk insurance coverage, to help achieve these shared objectives."
“With critical support in this next phase, MEII can build a facility that will help catalyze millions more in business investment, create many badly needed jobs, and contribute toward a more stable and secure region, and world,” said John Podesta, President and CEO of Center for American Progress.
Middle East Investment Initiative, a U.S. nonprofit organization, was formed to help revitalize economies in the region, recognizing that a strong economic base is critical for social and political stability. MEII partners with public and private organizations to develop specialized financial products in the Palestinian territories and elsewhere in the Middle East in order to stimulate economic activity, create jobs and expand home ownership.
The Center for American Progress & Middle East Progress
The Center for American Progress (CAP) is a progressive think-tank dedicated to improving the lives of Americans through ideas and action. The Center for American Progress is headed by John D. Podesta, former chief of staff to President William J. Clinton and a professor at Georgetown University Center of Law. Middle East Progress, a project of Center of American Progress, helps develop and highlight practical approaches and voices to managing – and resolving – the Arab-Israeli conflict. Middle East Progress believes such action will improve U.S., Israeli, and regional security, and America’s global standing, and reflects the will and aspirations of a vast majority of Israelis and Arabs living the conflict every day. Mara Rudman, a Senior Fellow at Center for American Progress, is the senior advisor to Middle East Progress, and served as a deputy national security advisor to President William J. Clinton.
The Clinton Global Initiative
CGI is a non-partisan project of the Clinton Foundation that brings together a community of global leaders to identify and implement innovative solutions to the world’s most pressing challenges. Since inception in 2005, CGI members have made nearly 1,000 "Commitments to Action" to address poverty alleviation, climate change, global health, education, and other pressing issues, and improve over 200 million lives in more than 100 countries.