$4bn plan to boost West Bank economy

Mahmoud Abbas, president of the Palestinian Authority, and the US Secretary of State Senator John Kerry at the conference. Salah Malkawi for The National

AMMAN // The United States yesterday launched a $4 billion development fund aimed at transforming the economy of the West Bank and restarting the Israel-Palestinian peace process.

Private-sector money will be invested to boost the Palestinian economy, increasing growth, employment, agriculture, tourism and home building, the US secretary of state John Kerry announced at the World Economic Forum at the Dead Sea resort in Jordan. He did not specify the source of the funds.

Tony Blair, the former British prime minister and now representative of the Middle East Quartet of nations involved in the peace process, will co-ordinate a team of voluntary advisers to direct the investment process.

Mr Kerry said the team would include "corporate executives, renowned investors and business analysts" who had already predicted that the results would be "stunning", with dramatic increases in economic growth and jobs.

The plan was presented at the final session of the WEF conference under the label "breaking the impasse", which also unveiled an Israeli-Palestinian business coalition designed to jump-start talks for a negotiated two-state settlement.

The initiative won the cautious backing of Mahmoud Abbas, president of the Palestinian Authority, and Shimon Peres, president of Israel, who also attended the forum.

Mr Kerry said: "We need an understanding on the role economics can play in the peace process. A nation finds pride by growing an economy that stands on its own two feet. There is the potential here for a self-sufficient Palestinian Authority."

He also held out the prospect of Israel, Palestine and Jordan as an international financial centre "in a place where few people want to come now".

Mr Kerry said that if the plan were successful it could be a new model for economic development. "If we prove it works here, it can be a model that can work elsewhere."

Mr Abbas said he was "pleased businessmen had realised that the key to a peace deal is a two-state solution. The current situation is unbearable." But he was critical of lack of progress on Israeli settlements and the rights of refugees and prisoners.

"The Palestinian people will not accept an economic solution while neglecting a political solution," he said.

Mr Peres said the plan was "imaginative", but should not be allowed to replace the political plan. "It can be a future of peace, let's do it," he said.

Mr Kerry's initiative came after 300 Israeli and Palestinian business executives formed an alliance to urge their leaders to re-start serious peace talks.

Two billionaire businessmen - the high-tech entrepreneur Yossi Vardi from Israel and Munib Masri, head of a Palestinian conglomerate - began the "breaking the impasse" initiative a year ago at another WEF gathering in Istanbul.

Mr Vardi said: "The conflict has gone on too long, has been too painful and there have been too many tears. We want education, productivity and social justice, not war."

Mr Masri said he would urge political leaders to start a "serious and expedited peace process," but warned against "any joint economic or business schemes that would legitimise the Israeli occupation."