Top US Diplomat Unveils $4bn Economic Peace Plan for Palestine

Last Updated: 28, May 2013

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U.S. Secretary of State John Kerry on Sunday outlined a $4 billion private investment plan to spur growth in the West Bank, saying it could transform the lives of people, but acknowledged the benefits could not fully materialise unless supported by a moment towards peace between Israel and the Palestinians.

The economic initiative, formulated and possibly led by former U.K. Prime Minister Tony Blair with a group of corporate executives and investors, would generate money for projects involving tourism, energy, agriculture, construction and high-tech industries in the West Bank and Gaza Strip, Kerry said during a meeting of the World Economic Forum in Jordan.

Preliminary estimates show that Palestinian gross domestic product could be increased by 50 percent over three years under the economic plan. In the “most optimistic estimates,” the plan would create enough new jobs to cut unemployment to 8 percent from 21 percent and increase the median wage by 40 percent, Kerry said.

Currently, 40 percent of the Palestinian economy is supplied by donor aid.

Israeli Prime minister Benjamin Netanyahu has long advocated the idea of “economic peace”, believing that improving the living conditions of the Palestinians would make them more disposed to wider peace deal.

Israeli President Shimon Peres, who spoke at the forum, endorsed the initiative and called on Palestinian leader Mahmud Abbas to “return to negotiations as soon as possible and bring peace”.

“President Abbas, you are our partner and we are yours,” the Nobel Peace laureate said, adding that the gaps between the two sides could be bridged.

But Palestinian leadership warned on Monday that it would not “offer political concessions in exchange for economic benefits,” according to a statement from Mohammad Mustafa, president of the Palestinian Investment Fund and economic adviser to Abbas.

“We will not accept that the economy is the primary and sole component,” the statement read.

Despite deep scepticism in the region, Kerry insisted his vision of an economic revival was not a substitute for key peace negotiations that have been on hold for more than two years. “Is this a fantasy? I don’t think so, because there are already great examples of investment and entrepreneurship that are working in the West Bank,” he said.

“We know it can be done, but we’ve never experienced the kind of concentrated effort that this group is talking about bringing to the table,” he said. “It is a plan for the Palestinian economy that is bigger, bolder, and more ambitious than anything proposed since Oslo 20 years ago.”

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