Peace and prosperity in Palestine via private investment

Peace and prosperity in Palestine via private investment

World leaders seek to promote $4 billion in private investment in Palestine – an effort which if successful, could boost GDP by 50% and sink unemployment.

The World Economic Forum (WEF) held its Middle East North Africa regional meeting at the Dead Sea in Jordan last week. Figures from the public and private sectors gathered to tackle the most pressing concerns facing the region and uncover opportunities for growth. Experts have for some time identified the lack of financial stimulus as a roadblock to advancement and expansion in the region. The idea of a Marshall Plan for the Arab world has long been bandied about without any concrete steps being taken. But an initiative unveiled at this WEF meeting attempts to address that very issue in the form of a stimulus package for the West Bank and Gaza.

In an address at the Forum, U.S. Secretary of State John Kerry announced an initiative (spearheaded by former U.K. Prime Minister Tony Blair) to secure $4 billion of private investment in the Palestinian territories. Kerry specified that the plan had already been discussed with leaders from the international business community. The plan provides for a range of projects in tourism, light manufacturing, agriculture, construction, energy, and technology. Reports named Coco-Cola’s Muhtar Kent as one of the figures involved. As part of the plan, Blair has said he will work to promote investment in the West Bank and Gaza. Kerry cited experts who, contingent upon the plan’s successful implementation, ambitiously envisioned a 50 percent jump in GDP in the coming three years and forecast a drop in unemployment from 21 percent to 8 percent.

The initiative’s announcement was accompanied by a joint statement by Breaking the Impasse, a group of prominent Israeli and Palestinian business leaders who have taken a united stand in favor of shared prosperity and peace, encouraging political leaders to pursue peace at a time when continued antagonism makes the possibility of achieving a two-state solution seem increasingly unlikely. Led by Munib al-Masri, chairman of the Palestinian Padico holding group, and Yossi Vardi, an Israeli high-tech mogul, the group has said they represent the will of the “silent majority” from among the Palestinian and Israeli peoples. Although the group has met with top politicians, including Israeli Prime Minister Benjamin Netanyahu and Palestinian National Authority President Mahmoud Abbas, its objectives have yet to be cemented.

In light of these seemingly promising developments, how likely are the initiatives to succeed? The end goal of both Blair’s investment plan and Breaking the Impasse is to achieve a peaceful and prosperous future for both Palestinians and Israelis. To be clear, Kerry stated that the stimulus package is meant to work alongside the peace process, not in lieu of it. Critics would insist that improved economic conditions not negate political demands. With that concern in mind, the intended objective of Blair’s plan is to create a viable Palestinian state that could thrive in the event of a two-state solution being achieved, not instead of it.

Laying this foundation is certainly an important step. In South Africa the business community played an important role in helping establish the conditions for the transition away from Apartheid. However, these gestures in and of themselves are unlikely to lead to prosperity or peace, unless accompanied by true commitment from the political sphere. In other words, we should not expect the Palestinian territories to become a thriving place for business unless the political peace process is moving alongside the financial stimulus initiative.

Perhaps the most evident obstacle is the difficulty of actually obtaining the buy-in of international investors and firms given the instability of the circumstances. Threats to political stability and physical safety make attracting investment a challenge. Meanwhile, the Palestinian territories’ underdeveloped infrastructure— including obstacles to transportation and limited access to natural resources such as water—could further deter business ventures.

A much-needed remedy for this lack of stability is political commitment to peace from both sides. Although both Abbas and Israeli President Shimon Peres have recognised the potential value of Breaking the Impasse, the two camps do not seem to be any closer to the negotiating table. Only if Kerry can succeed in bringing Netanyahu and Abbas together to talk will he attain the necessary political muscle to buttress the stimulus package. Kerry recently stated a willingness to return to Israel and the Palestinian territories to propel the peace process forward, though he did not set a timetable and noted that there was no specifically ‘American plan’ in the works.

Ultimately judgment must be reserved on the viability of the business ventures envisioned in the Blair plan until more tangible details are available. It remains unclear where the funding will come from or what the specific projects envisioned entail. But if those specifications take shape at the same time as politicians sit down at the negotiating table, there is a chance for a rejuvenated economy and more sustainable growth.

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