Let’s help the Pales­tinian econ­omy to grow

This week’s Pales­tine In­vest­ment Con­fer­ence can change the face of the re­gion


THE PATH TO peace in the Mid­dle East is as rocky as it is long. Progress has been ar­du­ous, some­times non-ex­is­tent, and it is not sur­pris­ing that at times hope has fallen by the way­side. To­day, once again, we are at a fork in the road. One route leads to con­tin­ued con­flict, the other po­ten­tially to last­ing peace. For ev­ery­one in the re­gion, that would be a great prize. Af­ter decades of blood­shed and ha­tred, there is a chance of a brighter fu­ture. A po­lit­i­cal set­tle­ment is, of course, the key. The An­napo­lis ne­go­ti­a­tions helped put that back on track — how­ever shak­ily — but they also set in mo­tion a par­al­lel and equally im­por­tant eco­nomic process.

I be­lieve that a two-state so­lu­tion, with Is­rael se­cure in its own borders, can only come about if the Pales­tinian Ter­ri­to­ries can stand on their own two feet fi­nan­cially.

Gor­don Brown has an­nounced that Bri­tain is ready to un­der­pin the peace process with up to £243 mil­lion over the next three years. We have al­ready pro­vided £55 mil­lion of this in 2008. But there is a limit to the im­pact of aid. Yes, we can help tackle the hu­man­i­tar­ian cri­sis in Gaza, and we can as­sist the Pales­tinian Author­ity in try­ing to es­tab­lish stable gov­ern­ment in the ter­ri­to­ries. But aid can­not by it­self bring pros­per­ity.

That’s why I trav­elled to Beth­le­hem this week to show the UK’s sup­port for a gath­er­ing of more than 1,000 in­ter­na­tional busi­ness lead­ers. If suc­cess­ful, the Pales­tine In­vest­ment Con­fer­ence could trans­form the eco­nomic prospects of the re­gion. Two-hun­dred projects, worth up to £1 bil­lion, have been put for­ward in an at­tempt to cre­ate not just prof­its but jobs and in­fra­struc­ture.

For too long, too many Pales­tini­ans have re­lied on an in­ef­fi­cient pub­lic sec­tor for their liveli­hoods. Prime Min­is­ter Fayyad is tack­ling this through a bold re­form agenda. This con­fer­ence is an at­tempt to cre­ate the be­gin­nings of a thriv­ing com­mer­cial sec­tor, to har­ness the en­tre­pre­neur­ial spirit not just of global com­pa­nies but of the Pales­tini­ans them­selves. By show­ing that there are op­por­tu­ni­ties in an un­tapped mar­ket, we can re­verse years of eco­nomic de­cline and fos­ter new lev­els of pros­per­ity.

I have an­nounced a £3 mil­lion project to match funds raised by small firms that wish to ex­pand and to sup­port busi­ness or­gan­i­sa­tions ded­i­cated to in­creas­ing pro­duc­tiv­ity and ex­ports. Bri­tain has al­ready com­mit­ted £10 mil­lion to­wards build­ing 30,000 af­ford­able homes in the West Bank over the next five years. With oth­ers, we are work­ing to re­duce the cost of mort­gages and al­low peo­ple on lim­ited in­comes to buy their own places to live. We hope that too will act as a con­fi­dence-build­ing mea­sure to stim­u­late private-sec­tor in­vest­ment and pro­vide jobs.

Most of the in­vestors at­tracted to the Beth­le­hem con­fer­ence are from the wider Arab world, Europe and the United States. There is no rea­son why this new mar­ket should not also be at­trac­tive to Bri­tish firms which are ac­tive in the Mid­dle East.

Pros­per­ity in the Pales­tinian Ter­ri­to­ries will also ben­e­fit Is­rael. Both sides would share the eco­nomic pro­ceeds of the peace div­i­dend that an end to con­flict would bring.

But there’s the rub. The Pales­tini­ans can only pros­per if they are al­lowed free move­ment of goods and peo­ple. The Is­raelis will only con­tem­plate that if their cit­i­zens are not un­der threat of sui­cide at­tacks or be­ing tar­geted by mis­siles. That may some­times seem like an im­pos­si­ble task. But the in­ter­na­tional com­mu­nity, Tony Blair and the Quar­tet are work­ing hard with re­gional lead­ers to keep the peace process on track. It is not easy and to have any chance of suc­cess they need to know they have eco­nomic mus­cle be­hind them.

There is no short­age of in­ter­na­tional good­will. In Paris last year, donor coun­tries pledged al­most £4 bil­lion to sup­port the search for peace. We are lob­by­ing hard to en­sure that those prom­ises are matched by ac­tion.

Suc­cess is not guar­an­teed. Years of vi­o­lence have en­trenched bit­ter­ness and mis­trust on both sides. But those com­mit­ted to peace can help break down the bar­ri­ers and to­gether we can shine the light on the road ahead. Douglas Alexan­der is Sec­re­tary of State for In­ter­na­tional De­vel­op­ment

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