94/10/30</a> The Casablanca Summit: "Building the Structures of Peace and Prosperity in the New Middle East" (Royal Palace -- Casablanca, Morocco)  Return to: Index of 1994 Secretary of State's Speeches/Testimonies || Electronic Research Collections Index || ERC Homepage

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Office of the Spokesman 
October 30, 1994

As Prepared for Delivery

                        The Casablanca Summit:
                "Building the Structures of Peace and
                  Prosperity in the New Middle East"

                 Royal Palace -- Casablanca, Morocco
                          October 30, 1994

Excellencies, Ladies and Gentlemen:  On behalf of President 
Clinton and the American people, I am delighted to attend this 
historic Middle East/North Africa Economic Summit.  We all owe 
King Hassan our deepest gratitude for hosting this unique 
event. Building on his vision of Middle East peace, the King 
has brought us together to remove walls and build bridges 
between the peoples of the Middle East and the world.

President Clinton and the United States are pleased to be co-
sponsoring this summit together with President Yeltsin and the 
Russian Federation.  Let me express our appreciation to Les 
Gelb and the Council on Foreign Relations and to Klaus Schwab 
and the World Economic Forum for their outstanding efforts to 
structure and organize this important gathering.

This summit convenes at an extraordinary time.  I have just 
accompanied President Clinton on his recent trip to the Middle 
East.  Let me share with you our assessment:  The Middle East 
is undergoing a remarkable transformation:

--  Jordan and Israel have signed a peace treaty;
--  The Israeli-PLO Declaration is being implemented;
--  Morocco and Tunisia have established ties with Israel;
--  Israel and Syria are engaged in serious negotiations;
--  and Arab nations are taking steps to end the boycott of 

These monumental events mean that the Arab-Israeli conflict 
is coming to an end.  The forces of the future can, they 
must, they will succeed.  The peacemakers will prevail.

Securing the future is what brings us here today.  Our 
mission is clear:  We must transform the peace being made 
between governments into a peace between peoples.  
Governments can make the peace.  Governments can create the 
climate for economic growth.  But only the people of the 
private sector can marshall the resources necessary for 
sustained growth and development.  Only the private sector 
can produce a peace that will endure.

Three years ago to the day, nations gathered in Madrid for a 
conference whose significance grows with each passing month.  
As we realize now, Madrid opened the pathway to peace.  Here, 
this week, let us declare that the Casablanca conference will 
open the pathway to economic ties and growth.  Madrid shattered 
taboos on political contacts between Israel and its Arab 
neighbors.  Let us ensure that Casablanca shatters taboos on 
private sector cooperation.

Let this summit send a message to the world:  The Middle East
and North Africa are now open for business.

Over the course of the twentieth century, the world has learned 
a powerful lesson:  Peace cannot be sustained when there is 
widespread suffering and misery.  Following World War II, wise 
leaders applied this lesson to the reconstruction and 
integration of Western Europe.  They built structures of 
cooperation, beginning with economic ties, to lessen the 
likelihood of conflict among nations.  Our purpose in 
Casablanca is to apply that same lesson to this region, as we 
work to create a more peaceful and secure Middle East.

On Wednesday night in Jordan, President Clinton became the 
first American President to address an Arab parliament.  There, 
he underscored the importance of generating the economic 
benefits of peace.  As he said:  "If people do not feel these 
benefits, if poverty persists, breeding despair and killing 
hope, then the purveyors of fear will find fertile ground. Our 
goal must be to spread prosperity and security to all."

The Madrid conference of 1991 started us on the way.  It not 
only launched a series of bilateral negotiations to resolve the 
region's political disputes.  It also created a framework of 
meaningful multilateral talks among some 40 nations to promote 
Arab-Israeli cooperation on a region-wide scale.  Joint 
projects are already underway to check the spread of the 
desert, to quench the region's thirst for water, and to protect 
the environment from oil spills.  Under the leadership of the 
European Union, the working group on economic development has 
drawn up a list identifying priority sectors for economic 

Israel, Jordan, and the United States are working together to 
create opportunities for private sector investment in areas 
that were unthinkable only months ago.  An ambitious master 
plan for the development of the Jordan Rift Valley has been 
completed. Joint efforts to promote tourism in the Red Sea 
ports of Aqaba and Eilat are already attracting millions of 
dollars of investment in hotels, infrastructure, and tourist 

Progress toward Arab-Israeli peace has opened the door to 
economic cooperation in support of peace.  Now, together, we 
must take a bold step through that door.  We must form a public 
sector-private sector partnership for government and business 
to bring their political and economic power jointly to bear.

I have seen the situation from both sides -- from the private
sector, where I have spent most of my career, and from the 
public sector during my three tours in government.  I have also 
been heavily involved in the affairs of the Middle East for the 
past two years.  Let me offer a challenge and a prediction:  If 
the forces of peace prevail and if governments here adopt free 
market reforms, the Middle East and North Africa will enjoy an 
era of economic growth that exceeds anything they have seen in 
this century.  There is no reason why the economic miracles 
that are transforming parts of Asia, Eastern Europe, and Latin 
America cannot also transform this region.  I can foresee a day 
when the 300 million people of the Middle East and North 
Africa, so long held back by strife and hatred, can finally 
join the mainstream of international commerce.

The presence here in Casablanca of almost 1,000 of the world's 
business leaders is proof that you understand the vast 
potential of this region.  I salute your vision.  But I also 
know that you are hard-nosed realists.  The new Middle East 
holds no monopoly on attracting your attention or your capital.

That is why the Middle East, even a Middle East at peace, 
cannot be complacent; it must compete.  The world must know 
that the Middle East is not only at peace but committed to 
long-term reform if world-class companies are to invest in this 

Almost 150 American firms are here in Casablanca.  They are 
well-poised to take advantage of the opportunities this region 
presents.  American companies don't fear risk, they thrive on 
it.  But like serious companies everywhere, they need 
confidence -- confidence in a business environment that makes 
it possible to do business.

To create a climate for economic growth and development, we 
need commitment and action by governments inside the region as 
well as those outside.  For decades, governments dominated 
economic development here, building infrastructure and national 
industries.  In the process, they incurred massive foreign 
debts.  Since 1970, the countries of the Middle East have 
borrowed more than $90 billion from abroad.  Over 90 percent of 
this borrowing was absorbed by the public sector, where it was 
too often steered toward the military or inefficient state 

Not surprisingly, private capital and the private entrepreneurs 
that went with it fled the region.  In the last 20 years, 
capital outflows from the Middle East and North Africa have 
exceeded $180 billion.  This capital flight has had enormous 
practical consequences.

We must work to reverse this destructive trend.  It is time for 
the region's private sectors to invest in their nations, in 
their peoples, and in their futures.  They must bring their 
capital home.  But if they are to do so, governments must take 
steps to create a favorable economic environment.  How can you 
expect foreigners to invest here when citizens of the Middle 
East do not invest?

Governments here must undertake serious economic reform. 
Morocco has begun that process.  Privatization is proceeding, 
stock market capitalization is rising, foreign investment is 
expanding, and growth is taking off.  Other countries in the 
region, such as Tunisia, Israel, Egypt, and Jordan have also 
begun to take similar steps.

But more must be done.  Governments need to end trade 
restrictions and overcome other barriers to trade and 
investment.  They must reform and modernize their tax systems 
and commercial dispute mechanisms.  They need to ensure 
predictable, transparent, and fair legal systems and business 
practices.  They need private financial markets.  And they must 
lift the heavy hand of government regulation that stifles 

An important political step to make the region's environment 
more attractive to global companies must be taken as well.  The 
last remnants of the boycott aimed against Israel must be 
eliminated.  Last month, Saudi Arabia and its partners in the 
Gulf Cooperation Council announced an end to the secondary and 
tertiary boycotts.  This means enormous opportunities for 
investment and trade.  Now it is time for other Arab leaders to 
follow the GCC's example.  Indeed, it is time for the Arab 
League to dismantle the boycott entirely.

Governments outside the Middle East and North Africa must also 
do their part to create a climate conducive to economic growth.  
They can take steps to encourage their companies to invest in 
the joint ventures that will become the stuff of Middle East 
peace.  They can provide incentives and reduce risks for 
foreign investors.  They can encourage trade by reducing 
barriers.  They can create the financial mechanisms that will 
help mobilize capital for regional projects.

The United States is already taking concrete steps in all
these areas:

--  Through our Overseas Private Investment Corporation, we 
have established a $75 million Regional Investment Fund to 
encourage investment in regional projects like those envisaged 
in the Jordan Rift Valley development plan.

--  We have also used OPIC guarantees to help a group of 
American business leaders from the Arab and Jewish communities 
foster Palestinian economic development.  These Builders for 
Peace have already launched five OPIC-backed private sector 
projects in the West Bank and Gaza.

--  We are exploring practical means of expanding trade and 
investment opportunities, including initiatives to lessen 
barriers to trade and bilateral investment treaties.

--  And, President Clinton, in consultation with interested
governments, has decided that the U.S. will take the lead in 
supporting a Middle East and North Africa Bank for Cooperation 
and Development.

Other governments outside the region are engaged in similar 
efforts to support the involvement of their private sectors in 
the development of the Middle East and North Africa.  But we 
all need to do more.  This is the opportunity presented by the 
Casablanca Summit.  We must seize it.

Here in Casablanca, our focus must be practical.  Our work must 
not be limited to exhortation.  We must generate specific 
outcomes, with mechanisms to act on our proposals.

Specifically, in this conference the United States will call 
for the following:

First, adoption of principles leading to the free movement of 
goods, capital, ideas, and labor across the borders of the 
Middle East and North Africa.

Second, the establishment of a Middle East and the North Africa 
Bank for Cooperation and Development.  A bank, properly 
structured, can serve as a financing mechanism for viable 
regional projects.  It should be available for the private 
sector as well as the public sector, and should facilitate a 
regional economic dialogue.

Third, the creation of a regional tourism board.  Tourism is 
one of the clearest and quickest ways to generate hard currency 
revenues.  The Middle East and North Africa abound with 
incredible archeological and religious sites.  Millions of 
tourists will flock to visit as package tours across previously 
closed borders become available.

Fourth, the development of a regional business council -- a 
chamber of commerce if you will.  This entity will promote 
intraregional trade relations and commercial opportunities.

To move expeditiously on each of these proposals, this 
conference must establish two on-going bodies.  First, a 
steering committee, to meet within one month.  Second, an 
executive secretariat, located in Morocco, that will serve as a 
clearing house of information.  It will be an "address" for the 
private sector by sharing data, promoting contracts, and 
furnishing project information.

Finally, the United States will call for a follow-on conference 
in Amman in 1995.  Casablanca represents the launching of a 
process to promote regional economic development and 
cooperation.  Amman will represent the next milestone and point 
all of us to seeking very tangible accomplishments by the 1995 

In a golden age over a millennium ago, the Middle East was the 
commercial and cultural crossroads of the world.  Harkening back 
to the glorious economic and cultural history of the old Middle 
East, this summit heralds a new Middle East in the heart of the 
global economy once again.  We have the opportunity -- and the 
responsibility -- to build a more peaceful, more prosperous, and 
more integrated Middle East and world.  Working together in a 
public - private endeavor, let us dedicate ourselves to making 
that vision a reality.

If I may borrow the famous Humphrey Bogart line, this conference 
could be the beginning of a beautiful friendship.

Thank you very much.
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