The Palestinian Central Bureau of Statistics and the Palestinian Monetary Authority announced in a joint report published Sept. 29 an increase in Palestinian investment abroad while foreign investment in Palestine remained stable.

The report said that the net difference between external assets and foreign liabilities for Palestine at the end of the second quarter was $1.9 billion, an increase of 11% over the previous quarter, showing "that the Palestinian economy’s investments outside Palestine outweigh investments in Palestine from abroad." The external assets for the Palestinian economy were $7.26 billion at the end of the second quarter, while foreign investment in Palestine totaled $5.33 billion.

This has stirred questions about why there has been an apparent drain of Palestinian investment capital outside the Palestinian territories. Does this mean that the Palestinian environment has become anathema for these investments? What are the countries where Palestinians are investing? Are they investing in real estate, commerce or finance? What are the countries investing in Palestine, and what are the West Bank and Gaza’s shares of these investments?

A Palestinian official at the Ministry of Economy, who spoke on condition of anonymity, told Al-Monitor that the increase in Palestinian investment abroad is normal amid the instability of the Palestinian political and security situation. “This is despite the incentives offered to investors such as tax exemption and administrative facilities. The political circumstances remain beyond our control. The Palestinian investor fears losing his money in the event of major security developments. This drives him to invest in a safer environment. This is sad but true. Palestinians ought to invest in their homeland and not abroad.”