Sir Ronald’s plan for peace
The prominent venture capitalist and backer of Gordon Brown urges economic support the Palestinians as a route to stability
PROMINENT GORDON Brown supporter Sir Ronald Cohen has no intention of following in the footsteps of Lord Levy, Prime Minister Tony Blair’s envoy to the Middle East and a major Labour Party fundraiser.
“I’m not interested in having an official position,” Sir Ronald told the JC on Sunday. “I’m not trying to be an envoy.”
Sir Ronald, the former chairman of Apax, one of the world’s leading private equity investment groups, was in Jerusalem to deliver a lecture on the role of economic initiatives in peacemaking. Describing himself as “a social entrepreneur”, Sir Ronald said that he did not “view myself as trying to take on the same type of challenge as Michael Levy did.
“I’m trying to use my business knowledge and access to capital markets in order to help resolve the IsraeliPalestinian conflict… Business must make its voice heard. When politics gets stuck, business can help get politicians back together,” he said.
In his lecture to the Israel Council on Foreign Relations, Sir Ronald said that it was clear that politics alone would not bring Israeli-Palestinian peace, and that economic drivers were needed to push the two sides forward.
“The importance of economics in conflict resolution is that it sets aside the question of motive, grievance, of historical rights and wrongs, and focuses instead on the question of the economic opportunity… The business community has the power to influence the process and can remove some of the most serious economic grievances.”
Israel and the Palestinians could learn from the experience of Northern Ireland where, he said, private-sector economic measures, particularly in reducing Catholic unemployment, were a major factor behind mitigating political violence and advancing the cause of peace.
Sir Ronald, the chairman of the Portland Trust, said that Israel needed to have twin objectives: it had to ensure the security of its citizens while at the same time allow the Palestinian economy to develop by providing freedom of movement for Palestinian workers and products.
The aim, he said, should be for the Palestinian economy to grow by an annual 10 per cent for 10 years.
“Prime Minister Olmert buys the economic argument,” Sir Ronald said. “The Prime Minister is open to this approach and I’ve had a number of conversations with him. The question is how you deal with the security issue” in terms of reducing the number of checkpoints in the West Bank.
In 2003, the Portland Trust conducted a study of the Palestinian economy at the request of the UK government. “The Palestinians could surprise us all in terms of their economic ability,” Sir Ronald said, noting that Palestinian society had a very high literacy rate and that two-thirds of the population were employed in the private sector.
“Business people,” he continued, “want to put the conflict behind them. Nothing will come from a painful stalemate… Private-sector employees do not have job security, unlike government workers.
“It therefore makes sense to develop the Palestinian private sector so as to make people less likely to want terror.”
Noting that Palestinian banks lent only 20 per cent of their funds to the private sector due to the risks involved, the Portland Trust has worked with EU and American institutions to provide more than £100 million of loan guarantees to Palestinian banks so that they will extend their credit to small and medium-sized businesses in the Palestinian territories. The Portland Trust is also developing a microfinance sector for loans under £3,000 for very small businesses.
In introducing Sir Ronald’s lecture, Israel’s Vice Premier Shimon Peres noted that “in the Middle East, there was too much diplomacy and strategy and not enough economy”. He pointed out that China changed “not because it had been invaded by an army but because it decided on the free market.
“We have to move on a double-track policy, one political with the Palestinians, which I’m not sure how far it will go,” said Mr Peres, “and a social, economic track, independent of the political one.”
Sir Ronald Cohen addressing the Israeli Council on Foreign Relations