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U.S. DEPARTMENT OF STATE
Office of the Spokesman
October 30, 1994
As Prepared for Delivery
REMARKS BY SECRETARY OF STATE WARREN CHRISTOPHER
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
Israel.
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
cooperation.
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
facilities.
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
region.
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
enterprises.
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
entrepreneurs.
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
conference.
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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