Return to: Index of "1995 Amman Economic Summit" ||
Index of "Economic and Business Issues" ||
Electronic Research Collections Index ||
U.S. Department of State
95/07/20: Joan Spero on Amman Economic Summit
Office of the Coordinator for Business Affairs
INTERVIEW OF JOAN SPERO
UNDER SECRETARY OF STATE FOR BUSINESS,
ECONOMIC, AND AGRICULTURAL AFFAIRS
ON USISíS WORLDNET TV PROGRAM
WITH BUSINESS LEADERS IN
TEL AVIV, JERUSALEM AND CASABLANCA
JULY 20, 1995
MR. FOUCHEUX: Hello, and welcome to Worldnet's "Dialogue," I'm Rick
Foucheux. Today, for our worldwide audience, and for guests standing
by in Tel Aviv, Jerusalem, and Casablanca, our subject will be the
upcoming Amman economic summit, which is being referred to as an agenda
for peace, development and investment. Joining us here in our
Washington studios, we are pleased to have as our special guest today
Joan Spero. She is the undersecretary of state for economic, business,
and agricultural affairs. Ms. Spero, welcome once again to Worldnet's
MS. SPERO: Thank you.
MR. FOUCHEUX: It's a pleasure to have you with us.
MS. SPERO: Thank you.
MR. FOUCHEUX: I understand you have some opening comments for us?
MS. SPERO: Yes. I'd like to spend a minute, if I may, Rick, talking
about the Middle East-North Africa economic summit, which is our topic
for today. I am delighted to be here, delighted to have a chance to
talk to all of you in the Middle East about this Middle East-North
Africa economic summit, which will take place on October 29 through
October 31st in Amman, Jordan.
As a co-sponsor of the Amman summit, we in the United States would like
to share views on the summit's potential and its opportunities for
advancing regional development. And I welcome this opportunity to
explain why we encourage government and business leaders to attend and
to participate in the summit.
The Amman summit is tied closely to the Middle East peace process.
Peace and security are closer to realization today than at any time in
modern history. The progress made by the parties in the region over
the past four years is quite simply remarkable. On all fronts there is
a clear sense of momentum. Peace and security are essential for the
economic development of the region. At the same time, peace cannot
last without concrete benefits for the people of the Middle East and
North Africa -- benefits that are only possible through increased
trade, investment, and entrepreneurship. As you in the audience know,
the Middle East and North Africa have a wealth of resources. The
region has a well educated population of over 100 million people, a
rich culture and history, enormous natural resources, and critical
transportation routes. Yet regional conflicts, as well as statist and
protectionist economic policies, have prevented the region from
realizing its economic potential.
The Amman summit can serve as an impetus for economic change. The
summit will gather senior government and business representatives from
nearly 60 countries dedicated to advancing business development. The
concept for the summit is public-private partnership. The private
sector must provide the entrepreneurial talent, investment capital, and
technical expertise for development. The public sector, for its part,
must improve the economic environment for liberalizing trade policies,
reducing regulation, privatizing industry, and improving the investment
I am a former executive myself from the private sector, and I know that
the primary concern of business people is to make sound and profitable
investments. That's why the summit organizers are laying the
groundwork for business and economic development opportunities at the
summit. Let me tell you their goals.
First, moving forward on regional institutions: a development bank for
financing regional and private sector development, a business council
and a tourism board, all with regional governmental and private sector
Secondly, encouraging regional states to liberalize their economies and
to develop a free-market approach to development.
Third, deepening contacts between both government and the private
sector, and within the private sector itself.
And, finally, preparing actual development projects in the region. We
expect that there will be an emphasis on projects involving more than
Now, to achieve these goals, the parties have decided that the Amman
summit should be smaller, more focused, and more oriented toward the
private sector than was the Casablanca summit. Plenary sessions will
focus on the four major themes of the summit: trade and industry,
infrastructure, investment and finance, and the economic environment.
Project briefings, roundtables, and industry-specific workshops in the
nine key sectors will provide opportunities for business people, as
well as government decision-makers, to exchange experiences, pursue
opportunities, and follow up on projects.
Both President Clinton and Secretary of State Christopher are
personally committed to the success of the summit. Secretary
Christopher will lead the U.S. delegation, which will include our
Commerce Secretary Ron Brown, and other senior U.S. government
We in the United States have no illusions that prosperity will come
quickly or easily to the region. The road to development and regional
cooperation is a difficult one. However, Amman will provide
opportunities and incentives to start the process. We encourage you to
join the efforts. We want your participation in and support for the
summit, and for the economic development of the entire region.
I think I've spoken enough. What I'd welcome now is an opportunity to
take your questions and to hear your views. So thank you.
MR. FOUCHEUX: All right. Let's get to the questions and comments from
overseas. We begin first with a question from Tel Aviv. Go ahead
please in Tel Aviv.
QUESTION: Good afternoon from Tel Aviv. My name is Dan Gilamon (sp).
I am chairman of the Israeli Chamber of Commerce, and I am a veteran of
the Casablanca economic summit, as well as many other economic summits
and conferences. And what I would like to share with you is some
skepticism we private sector businessmen have developed over the recent
months about the efficiency and practicality of these summits. There
seems to be a lot of talk and a tremendous amount of good will, but at
the end of the day very little substance. And what I feel very
strongly is that we should all make a real effort for Amman to be Amman
I, rather than Casablanca II. Casablanca served its purpose as far as
staging a very historic opportunity for Israel and its neighbors to
legitimize economic conduct and business discussions. But it did not
focus enough on the private sector or on business. And I believe that
in order for Amman to be a real business success, much more effort
should be paid to preparing it properly, match-making the potential
partners, identifying real projects -- including small ones, rather
than mega-projects and government projects -- and networking, so that
when we get there we will really meet the people with whom we can
ultimately do business. And what I was really wondering is that seeing
that there are still some difficulties in discussing real business
ventures between Israeli and Arab businessmen directly, how can the
U.S. facilitate, and even package, such projects and discussions, and
prepare them so that when we get there we can really talk business and
do business? Thank you.
MS. SPERO: Let me thank you. Those are really excellent comments, and
I have to say those are exactly the kinds of comments that I have
heard, that Secretary Christopher and others have heard, as we have
consulted the U.S. private sector. We have been talking to them a lot
about what would be useful for them. I come from business -- I know
about total quality management -- you're supposed to ask the customer,
and that's what we have been doing. We have heard exactly what you
What others have said to us is that Casablanca was important in the
sense that the meeting itself was the message, but that in Amman we
really have to go beyond that and to make it user friendly for
business. Let me tell you some of the things we're trying to do.
First of all, we heard that there were too many government speeches in
Casablanca -- not that it wasn't important, but that in Amman they want
more opportunity for networking, for small meetings, focus on
particular sectors, focus on particular countries and the opportunities
in those countries. So the agenda itself is organized in a very
Secondly, in Casablanca there was a large crowd. And, again, for that
meeting it was very useful. Here the participation will be much
smaller. It will be more selective -- business people from industries
who have real interest in doing business in the Middle East. So there
will be more focus, there will be a more business-oriented agenda,
there will be a smaller group. And, finally, there will be, if you
will, more capacity to serve the business customer. For example -- I
don't know if you are familiar with the Davos World Economic Forum,
which is hosting the Amman summit, and also hosted its annual meeting
in January, late January in Switzerland. They're going to be using
some of the techniques that they used in Switzerland: an e-mail system
so that the business people can set up appointments with each other;
small rooms and free time for conferences. So the promoters and the
organizers of the event have taken on board the comments that you are
making, and I think are working very hard to make it business friendly
Perhaps I could also try to answer your second question, which was what
is the U.S. government doing, in particular what are we doing to try to
promote dialogue between Arabs and Israelis. As I mentioned before, we
have been actively consulting our private business sector, and we have
formed a group that consists of our Commerce Department and of our
State Department and private sector people, to try to see where they
see the business opportunities, and what role government might be able
to play in facilitating those business opportunities. So we are
starting with our own private sector, and trying to encourage them to
get involved, and trying to see that whether through our embassies,
through our trade facilitation programs, through our own ability to
network, we can promote business interests. So we're on the case.
MR. FOUCHEUX: Thank you very much, Tel Aviv. We'll be getting back to
you soon. Jerusalem is standing by now with their first question. Go
ahead please in Jerusalem.
QUESTION: (Off mike, technical difficulties.)
MR. FOUCHEUX: Jerusalem, here's a note from our studio in Washington.
We're having a hard time picking you up on the microphone there in
Jerusalem. I believe my producer is telling me you're on the wrong
microphone. Is there any way that you could move over to another
microphone in the room, just so we could hear you a bit better here in
QUESTION: Good afternoon from Jerusalem -- (technical difficulties).
MR. FOUCHEUX: All right, Jerusalem, we're having a bit of a problem
hearing you still in our Washington studios, so we are going to move
along to our next post in Casablanca for their first question.
Casablanca, are you up and running and ready to come in with your first
comment or question for us?
QUESTION: Yes, good morning. It seems to be that there are high
expectations, but also at the end of the day there hasn't much been
done. In our eyes as observers since the Casablanca summit, there are
-- there cannot be peace -- this cannot be achieved without any
economic interests. As you know, there are no permanent enemies.
There are no permanent allies. There are only permanent interests.
And for the upcoming Amman summit, I would like to make a concrete
proposition. Coming from the business, you well know, Ms. Spero, that
concrete suggestions count much.
I would like to propose that the Amman summit studies and takes into
consideration the current proposition, which is that the World Bank or
the U.S. government or other governments concerned, finance with low --
very low interest rates, and low interest rates and good facilities, to
any joint venture between Israeli and Arab businessmen, but --
(inaudible) -- specifically small business? Because it seems to me
that in Casablanca it was more of a big business affair than a small
business affair, and I think small business would contribute a lot to
the development of the area. I am sorry, I have not introduced myself.
This is -- (inaudible) -- chief executive officer of -- (inaudible).
MS. SPERO: Thank you. I think that is a very important point and a
very good suggestion, both in terms of the financing and in terms of
the small- and medium-sized businesses. I think that you are right in
saying that in many cases big business needs support in the form of
financing or in an Amman-type summit less than the small- and medium-
sized businesses do. They have less capacity to network
internationally, they have less access perhaps to finance, and
certainly there are massive opportunities. We also know, in the U.S.
and elsewhere, that it's small- and medium-sized business that provides
much of the employment, and that is a major issue in the Middle East.
So I very much agree with your emphasis on the small- and medium-sized
Let me make a comment about your financing point, if I may. One of the
institutions that we are working on now, and that we hope to have
completed in -- and to be able to reach a political commitment for by
the time of the Amman summit, is this Middle East and North Africa
Development Bank. Let me take a moment to comment about that bank,
because it very much addresses the issue that you are raising.
The Middle East, in order to develop, is going to need capital. It is
going to need financing. That financing cannot come solely or
exclusively, or even primarily, from the government. But what the
government can do, along with the multilateral institutions, is to
prime the pump. Government can provide financing for projects that do
not lend themselves to private sector development; and government,
operating through multilateral institutions, can also try to act, if
you will, as an investment banker, mobilizing private and public sector
funds. And that is the idea behind the Middle East and North Africa
The thought here is not to create another development bank like those
that already exist in Asia, in Africa, and in Latin America; but to
create a new and modern type of development bank. What it would do is
to have a relatively small level of capitalization -- we're talking
roughly $5 billion, with maybe a billion and a quarter of paid-in
capital. But what that bank could do would be to mobilize the funding
that is available through the World Bank, through the European
Investment Bank, through various Arab and Gulf funds -- to package it,
and to act as a merchant banker. In addition, what we believe this
bank can do is to foster, just as you suggested, regional projects.
While national projects would not be excluded, the real emphasis would
be on projects that would benefit more than one country. And then
finally, and I think this is really what would make this bank
different, is it would have a heavy emphasis on the private sector --
not sort of try to reproduce the state-owned enterprises or state-led
projects, as you suggested, but to encourage a flourishing private
sector in the Middle East.
So we are very much looking at that issue. I won't see that the Middle
East Bank has been agreed yet or decided on yet; but it is a real
possibility. So I think that that could well be responsive to the type
of need -- the very real need that you are suggesting.
MR. FOUCHEUX: Thank you very much, Casablanca. Let's return now to
Jerusalem for their first question in this series. Jerusalem, go ahead
QUESTION: Good afternoon from Jerusalem. This is Ibrahim Matir (ph)
from Aneira (ph), an American PVO that funds development projects
through U.S. aid. From our experience with businessmen and what we
learn on the ground, that the real issue is really deregulation. The
most important subject for them is the freedom of movement of goods and
people. This is we feel is the main hindrance to real economic
development and trade and investment for the Palestinians in the West
Bank and Gaza. Therefore, we would appreciate if the issues of
deregulation and issues of free movement of goods will come up for
discussion at the conference in Amman. And thank you.
MS. SPERO: Well, first of all, I am glad that the mike is working,
because you've raised a very important point, and I am glad Jerusalem
was able to plug in. And, once again, you are raising a very critical
point. One of the goals of Amman is to try to foster greater commitment
to deregulation, privatization, liberalization -- both at home and in
international economic policies.
You know, for too long the Middle East countries have been focused
exclusively on national development. They have not focused on export-
led development, have not heavily focused on international markets.
And to the extent that they've looked for international markets, those
markets have largely been in Europe or the United States and outside
the region. Well, there has been a revolution in the world in thinking
about development, and that revolution has to do with market-oriented
policies. Countries throughout the world are looking at where the
success stories have come, and those success stories have been to a
great extent in countries in Asia and in Latin America that have opened
up their economies and have created a very positive environment for
private sector development, for export promotion.
So the Middle East is on the verge -- I would say in stage one by and
large of that revolution. Many of the countries still have large
state-owned industries, but Egypt, for example, and Israel for example,
are moving toward private sector. Many of the countries have had
protected domestic markets. They are learning that those markets are
too small, and they must look abroad. So trade policies are gradually
being liberalized. And Amman of course is not going to make decisions
for national governments, but what Amman can do is to put the private
sector people together with the government people, so that the
government people can understand how they can adopt policies,
deregulatory policies, that will support foreign investment, domestic
investment, and trade across borders. So I hope that the private
sector people coming to Amman will bring that message to the
governments -- not only to their own governments -- I think that is
taking place -- but also to governments throughout the region.
You know, the region has a long entrepreneurial tradition. It has
capital that has by and large flowed abroad instead of staying in the
region. And this is an opportunity to take the talents of those Middle
East entrepreneurs, to take the capital that has fled abroad, and bring
it back with the appropriate government policy so that the region can
flourish. I hope that that will be -- it certainly is planned that it
will be a major theme in Amman, and I hope those coming will reinforce
that message that you are giving us today.
MR. FOUCHEUX: Thank you, Jerusalem. We'll be returning to you later
in the program. Let's go back once again now to Tel Aviv for another
round of questions. Tel Aviv, go ahead please.
QUESTION: Good afternoon. My name is -- (inaudible) -- and I am a
correspondent for international affairs -- (inaudible) -- the Israeli
business newspaper. And my question is this: The private sector
already said that the money is ready to invest in the area. It was --
(inaudible) -- three months ago something like this. The only
precondition that the private sector had was a unified framework of
regulations and laws. This is a concern especially to the JRV projects
between Jordan and Israel. They have said that they are not ready to
start investing or financing projects unless they know exactly what are
the regulations. Is there any progress concerning this matter?
MS. SPERO: Well, again, it is a very important point. Business has a
number of prerequisites for productive investment. One of course is
peace and security. Business is going to feel much better about moving
into the region as peace spreads and as the region stabilizes. In
addition, as you point out, there has to be predictability. Business
likes as much predictability as possible, so they need to know what the
investment laws will be, they need to know what the regulatory regime
will be. But, beyond that, they are going to want to know things like
pricing policies: What are the pricing policies going to be for
electricity and for water and for other natural resources?
So there are several ways to approach this. One of course is at the
national level. And many of the governments in the region are moving
to modernize their laws about foreign investment -- their tax laws.
Jordan is one example. There is legislation now being discussed now in
Jordan that would open up foreign investment, that would modernize the
tax regime, and basically make Jordan much more user friendly for
foreign and private investment. So things can be done at the national
In addition, there is the possibility of cooperation across national
boundaries. And this is exactly as you mention, the Jordan Rift Valley
dialogue that is going on between Jordan and Israel right now. And
that will be a major theme at the summit. There are incredible
possibilities in that area that range from tourism and parks in the
Dead Sea, to electricity, water facilities, possible airports and
transportation facilities at Eilat and Aqaba for example. And there
has been a recent suggestion that all that could be facilitated by
developing a common regime, common rules of the road, for investment,
for taxation, for cooperation. So that would be another way to promote
Let me mention one final area where there might be cross-border
cooperation to promote business. Another idea that has been discussed
is the development of industrial zones between Israel and the
Palestinian Administration. Those have a great appeal, because they
could promote investment, they could encourage employment, which is a
major issue in Gaza and the West Bank, and they would provide for
cooperation between Israel and the Palestinians. Again, that would be
an example of a cross-border regime, where you would have tax rules,
infrastructure development and regulations. So that is yet another way
to promote investment. I think it is a very exciting possibility. And
I think, again, it will be a possibility that should and will be
discussed in Amman. We should be doing everything we can to promote
appropriate national policy changes, and what I would call government
joint ventures, wherever possible.
QUESTION: My name is David Lipkin (ph), and I am from -- (inaudible) -
- newspaper. You have mentioned the Gulf countries' money, that you
want them to participate in a bank. But there are rumors that they are
not on the way to coming to participating in the Amman conference.
What are you doing to have them participate in the Amman conference?
My second question is about the Middle East bank. As we know, the
Europeans are opposing the bank -- mostly Germans. And now this --
(inaudible) -- meeting in Moscow a working committee. What are the
chances of you changing the European's attitudes toward the bank?
MS. SPERO: Well, again, two good questions. Let me comment first on
the Gulf. The United States has been encouraging the Gulf states to
come -- not only have the business people come, but to have the
government leaders come. In addition, Jordan is taking initiatives
vis-a-vis the Gulf states to encourage them to come. I know that the
foreign minister visited Saudi Arabia recently; I gather that meeting
went quite well. I gather there is the talk about improving diplomatic
relations. And that political initiative, which really is an adjunct,
a corollary if you will to the peace process, I think will create a
more favorable environment for business transactions. So a number of
us are in dialogue with the Gulf states -- both people from the region
and from outside the region, in encouraging their participation. So I
am optimistic. There was representation in Casablanca, both of the
business sector and of government officials of the Gulf, and we are
very hopeful that they will also come to Amman. We have to recognize
that there have been sensitivities in those relationships since the
Gulf War, but we should look at Amman as an opportunity. It is an
opportunity to reestablish an important government and business sector
dialogue between Jordan and the countries of the Gulf. So I am
optimistic about that.
Now, you also asked about sort of where are we in the Middle East
Development Bank. And you are very well informed: there is a meeting
going on, even as we speak, in Moscow. It began today, and will go on
tomorrow. We really made a lot of progress in the concept of a Middle
East Development Bank. I want to emphasize that this was an idea that
came from the region. It came from the Palestinians, Egyptians,
Jordanians and Israelis. And that is one of the reasons that the U.S.
has been very supportive and very responsive. It isn't -- it hasn't
been quite often in recent history that those four parties have gotten
together, developed a plan, and said, "Please support us" -- it's often
been the other way around.
So we have been working very actively with the other supporters of the
concept of the bank, and you are right to say that a number of the
European countries have been skeptical. They have argued that what we
really need is what we call a Middle East-North Africa financing
mechanism and maybe we don't need a bank. We have been coming closer
and closer. The Europeans I think are recognizing that a bank could
provide important opportunities for financing, for mobilizing the
private sector, that a bank does not need to be a large institution
with marble corridors and huge bureaucracies, but that it can be lean
and mean, it can do co-financing. And so I think increasingly they --
not all of them, but many of them are becoming more responsive to the
concept of the bank.
At the same time, we in the United States, Japan, Canada, others who
have supported this concept, recognize that you can't start a bank
overnight, and that what you might want to do is to start very quickly
with some kind of financing institution or financing mechanism that
could do feasibility studies, pre-feasibility studies, technical
assistance as you run up to a bank.
So what I see happening is that the two concepts are gradually merging;
and I won't say that we are there yet, but what the negotiators are
talking about, and the experts are talking about in Moscow, is whether
or not it is possible to merge these two efforts. We'll see. The
United States really believes that we want to go ahead, if we can come
up with a plan that suits our interests -- and that is making sure it
is financially sound, that it is responsive to the private sector, et
cetera, et cetera -- then we're prepared to go ahead with those
countries that are prepared, and those that don't want to go ahead
obviously won't go ahead.
So I remain an optimist. We have really come a long way, but I will
not pretend that we have bridged all the gaps yet.
QUESTION: Good afternoon again, Ms. Undersecretary. It's Dan Gilamon
(sp) again, chairman of the Israeli Chamber of Commerce. First of all,
I would like to express to you my appreciation for our own personal
effort and interest in the region. I had the opportunity of listening
to you present the Casablanca summit in Davos last January, and in
Casablanca itself, and I value your input very, very much.
I would like to take this opportunity to address a comment made by the
gentleman from Jerusalem, our Palestinian colleague. And I would like
to tell him that we at the Israeli Chamber of Commerce, and the Israeli
private sector and business community as a whole, are very conscious of
the need to do away with as many regulatory and other obstacles as
possible in order to facilitate trade, joint ventures, and a normal
business activity between ourselves and the Palestinians. I think it
is in both our joint interests to see the standard of living and the
quality of life in the Palestinian Authority rise as quickly as
possible, because I also believe the higher the standard of living the
lower the level of violence. And therefore I would like to offer the
Palestinians to engage with us as quickly as possible in an ongoing
dialogue where they will address to us the problems that they are
facing today so that we can try and address our own government and
other bodies in order to make it easier, more accessible, and more
pleasant to do business together. We have had a very, very important
meeting in Cyprus with Palestinian business leaders and businessmen two
weeks ago, where some of the problems were addressed, and we would like
to continue this dialogue in order to improve the conditions for
business so that we come to Amman as partners with feasible business
ventures discussed between us.
And the other point I would like to make -- my Palestinian colleague
did not mention it -- be we know it's in the air, and I would like to
make it clear. There was some sense -- and there is some apprehension
I think in the Palestinian world, and maybe in the Arab world, of what
is termed Israeli economic domination and the fear of Israeli economic
domination. And I welcome the chance and the opportunity to state
unequivocally at this satellite dialogue that not only doesn't Israel
have any aspirations or any willingness or any capacity of dominating
anyone; we know how important it is to manifest and demonstrate that
there is no such intention. And, therefore, we would be very happy in
any joint venture discussed to include any foreign partner and even to
take a minority share just in order to make it happen and to alleviate
any fear or suspicion that may arise. Thank you.
MS. SPERO: That is a very welcomed comment, and I appreciate your
frankness in all of this. It has been a bit of an undercurrent, as you
said, as to whether regional cooperation isn't somehow going to mean
that the Israelis will either have all the advantages or be dominant.
And I think the more that you can take exactly that message that you
have just given to your colleagues and to your potential partners --
not only the Palestinians -- the Jordanians, the Egyptians, Moroccans
and others -- I think the more successful Amman will be. So can I
encourage you to take that message quite broadly? I know there is no
intent, but I know that there has been this undercurrent. I don't know
if our Jerusalem colleague would like to comment on that or not.
MR. FOUCHEUX: Well, our Jerusalem post is next. Thank you, Tel Aviv,
for those questions and comments. We move now back to Jerusalem for
another series of questions and comments from our participants there.
Please go ahead in Jerusalem.
QUESTION: Good afternoon. My name is -- (inaudible) -- I am a
Palestinian -- (inaudible). And I have two questions -- one for Dr.
Spero and one from my good friend Mr. Dan Gilamon (sp) from Tel Aviv.
The first question. Ms. Spero, you are talking about free trade and
liberal policies for economic development by encouraging investment of
the private sector. But we see here in Palestine the economic stakes
are against us, by having more constraints and closures, and thus
adding more difficulties for us, which discourages investment in our
country, and increases unemployment, therefore adding up to more
tension and despair. How can the international community help to ease
such constraints in order to help our trade and economic development?
MS. SPERO: Well, I know this is a very big concern. And here the
problem we are facing is the question of security and the Israeli's
natural, and valid, and important concern about acts of terrorism, and
their very important need to ass much as possible protect their
citizens from those kinds of acts of violence. So how do we address
that problem? Well, several ways. One is of course the more that the
Palestinian administration can assure that acts of violence do not
originate in Gaza or the West Bank, the more that we can improve the
security and the peace situation, of course that is the fundamental way
to improve the flow of people and of goods.
But, given the current situation, let me tell you what we in the United
States have been doing. We have been talking to our counterparts in
Israel, as well as with the Palestinian administration, to see how one
could, given the controls, make them as painless as possible. And one
recognizes that there is pain and there is problems -- there are
problems created for business. So we have been talking to the Israelis
about increasing the number of checkpoints, about developing techniques
so that the checkpoints are not as cumbersome, and overall trying to
speed up the process. We have done that not only for people, but also
for goods, because I know that has been a major issue.
So how can you meet the valid security concerns of the Israelis while
minimizing the disruption, recognizing that there is disruption? In
the longer term, as I said, the real solution is going to be peace and
security. But there is, I would say, another approach, and that goes
back to the industrial zones that I talked about. One of the major
concerns, particularly in Gaza, is employment. And while the numbers
have increased quite significantly from below, in terms of workers
going from Gaza to Israel, still there is large unemployment in Gaza,
and there is a real need to find jobs for people. There are two ways
to do that. One is to do it in Gaza, and there we can think about
business projects and opportunities that will require infrastructure
development. And you probably know that the United States, Europe,
Japan and others, are spending a lot of money and a lot of time trying
to develop the infrastructure of Gaza.
And then there is this concept that I mentioned earlier of industrial
zones. Those industrial zones could be opportunities for exports.
They could be opportunities for significant employment. They won't
happen overnight. But I think it is a concept well worth exploring.
So there are multiple ways. We are engaged with the Israelis and the
Palestinians in multiple efforts. It won't be solved overnight. But
you are absolutely right: It is a problem that we must address.
QUESTION: My second question is to Mr. Dan Gilamon (sp). As you know,
Mr. Gilamon (sp), here in Palestine we need all business opportunities
and commerce and trade opportunities to add up to employment
opportunities and job creation. One of the difficulties we have with
the Israeli business community is they don't want to let go their
franchises and agencies for the West Bank and Gaza. I am very happy to
hear that the Israeli business community is interested to help us and
to cooperate with us. Why then they don't realize the new fact that
Palestine now is a new entity, that we are creating our own separate
economy, that we are after economic development not only for our own
sake, but also for the sake of the Israelis -- to have peaceful
neighbors for them, to have economic development in our countries? And
one of the most immediate jobs is to give back these franchises for the
globals and multinationals which we have been struggling for the last
two years to get it back. Why -- what do you think you can do to help
us convince our Israeli friends that for the West Bank and Gaza they
should not object to us getting these franchises and agencies back in
order to start working here and create new jobs for our unemployed
MS. SPERO: I think it was directed at Tel Aviv.
MR. FOUCHEUX: Mike, if we could switch back to Tel Aviv briefly -- the
question was for Mr. Dan Gilamon (sp), and I am sure that he was
listening in Tel Aviv, and perhaps he has an answer for our friend in
Jerusalem. Can we bring Tel Aviv --
QUESTION: Good afternoon, Danny, and I was listening very carefully,
and it's not the first time that I hear Mr. Esah (ph), my good friend
Daniel Esah (ph), mention this problem. And I share with him the
feeling that possibly the quickest and maybe easiest thing to do,
rather than set up factories or joint ventures, is to try and establish
retailing and marketing and franchising outlets for international and
multinational companies. And I think that there are really two answers
One is that ultimately the answer lies with the multinationals and the
international companies themselves. It is very much up to them who
they want to represent them in a certain region, who they want their
agent or their franchisee to be; and it is ultimately a matter for
dialogue or for negotiation between the person in Gaza or in Ramallah
or in -- (inaudible) -- or in Tel Aviv with his principal.
But beyond that, so as not to sound naive, I realize that there is a
lot of scope for discussion and cooperation between Israelis and
Palestinians also in this regard, and I believe that the answer
ultimately lies not only in deciding whether it will be a Palestinian
or an Israeli who will be the agent or the representative for the
region, but rather to try where possible -- and we are all businessmen,
and we try to achieve things that are possible and make business sense
-- to embark on joint ventures in this very sector, to try to bring
together people who either have the franchise or aspire to have it, and
to try to see whether there is a way of having a joint venture whereby
the franchise for the entire region will be jointly held by an Israeli
and a Palestinian, maybe with some kind of market segmentation. This
is something which we have suggested before. And I would very much
welcome a meeting between anyone -- and obviously Mr. Esah (ph)
himself, but others as well, and Israeli agents and representatives, to
try and see how we can reach some kind of accommodation which would be
based on understanding and cooperation rather than dispute and
competition. I think the key word ultimately will be "coop-petition" -
- cooperating while competing. Thank you.
MR. FOUCHEUX: Thank you very much, Mr. Gilamon (sp), and thank you in
Palestine. I must say it's gratifying to be part of a dialogue between
the two cities, at least technologically. Let us return once again to
Jerusalem for more questions or comments for our guest, Ms. Joan Spero.
Please go ahead once again in Jerusalem.
QUESTION: (Inaudible) -- Hebron Chamber of Commerce. Dr. Spero, as
Palestinian entrepreneurs since Casablanca till now, we haven't seen on
the ground any practical enterprises. When shall we see it looks like
these practical enterprises will be active on the ground. Should Amman
forum (seek ?) to overcome this problem? Second, all parties visiting
our chambers of commerce are intending to establish joint ventures --
they are assuring to us that they have political assurance to them
through us to act in their enterprises. How can we overcome this
problem? Thank you.
MS. SPERO: Well, the desert, or the Middle East, will not bloom
overnight. Developing joint ventures, developing projects, be they
small or large, will take time. And I don't think we should kid
ourselves that somehow overnight everything is going to change. The
example Mr. Gilamon (sp) gave about the lingering suspicion, that
Israel might try to dominate the region economically, is an example of
the kind of psychological concerns that continue and that are
understandable after decades of conflict in the region. In addition,
concerns about security -- I would assume that Hebron is one of the
areas where there is significant concern -- will continue to be very
much in play. So we shouldn't kid ourselves that all of a sudden by
signing a peace agreement, or by having a teleconference, or frankly
even by an Amman summit, everything is going to change overnight. So
we have to be realistic.
At the same time, there are several important things going on. As I
said, for Gaza and the West Bank, the so-called donors group -- the
United States, Europe, Japan and others -- are working very hard at
developing the infrastructure that will set the basis for development -
- working on sewage, working on roads, working on water. All of those
are prerequisites for investment. At the same time, as we move along
on that effort, we are also trying to encourage the process of private
sector development. Now, we have a saying in the United States -- I
don't know how it works in the Middle East -- which is, you can lead a
horse to water, but you can't make it drink. So we are trying to lead
the horse to water, and we can do that in a variety of ways. We can
try to develop the Middle East Development Bank, which will be for the
private sector and for regional projects. We can have the summit in
Amman, as we had the summit -- not we, but the region did, in
Casablanca -- to try to create opportunities for business people to
come together. I look at this as not only an opportunity for encounter
and for networking, as Mr. Gilamon (ph) put it, but also for marketing.
It's an opportunity for the Middle East to tell the rest of the world
that we are open for business.
So we can also find other ways to encourage the private sector. The
United States has just established a $250 million fund -- our Overseas
Private Investment Corp., which will guarantee investments in the
Middle East against political and other risks, and which will provide
certain financing for the Middle East. So that is why we are calling
Amman a public-private sector partnership. Government has a role to
play; the private sector has a role to play. We have to start the
process. But we shouldn't kid ourselves in thinking that everything is
going to change overnight. But, as we also say in the United States, a
long journey begins with one step.
MR. FOUCHEUX: Thank you very much in Jerusalem. Let's return once
again to our participants standing by in Casablanca for another round
of questions there. Please go ahead in Casablanca.
QUESTION: Hello, I am -- (inaudible) -- a weekly newspaper in
Casablanca. And I live with the experience of free trade in the Middle
East, as I publish the daily newspaper of the Casablanca conference
with an Israeli newspaper, a major one, which is Ha'aretz. So I had
the opportunity to live this experience as it was -- (inaudible). But
now I share the feeling of the president of the Chamber of Commerce of
Israel. I lived this big hope, and now I am living with a lot of
skepticism, because we also -- all the people, all the Arabs, all the
Europeans, all the Americans, all the Israelis who were in Casablanca,
saw a lot of projects, a lot of ideas raising up, and now we don't see
anything moving on. I take the political -- the politicians and the
states responsible for that, because -- and my question is to Ms. Spero
-- because a lot of states provide a lot of things, especially money.
And you know if you don't give money, if you don't put money on the
table, you won't have anything, because you have all areas in the
Middle East, and you will not have free trade if you have very poor
areas -- the Gaza Strip and the Palestinian territories. And there is
no bank. Everybody promised money for the bank, because a bank is the
main tool of free trade and development. And nothing is done. So I am
afraid that the Amman conference will be again just a conference for --
a political conference to say, Hey, we are here -- we want to do
something, so push the peace process.
My other question is for the president of the Israeli Chamber of
Commerce. I would like to know if he is convinced he can set up free
trade with the Palestinians and with Arab countries, knowing that the
Israeli economy is very strong, he is close to Europe, and Arab
territories are poor, and Jordan is poor, Egypt is poor, and their
industries are very weak. Do you think that you will build free trade
with unbalanced economies?
MS. SPERO: Shall I start first, Mr. Gilamon (sp)? I think I disagree
with you. I agree with you in your point that there was great hope
after Casablanca, and that we haven't seen many projects, we haven't
seen as much action as we would like. As I tried to describe in my
opening remarks, as well as in my comments, we in the United States and
the other sponsors of the Amman summit are trying to make it much more
business focused, business friendly, oriented toward the practical
business of doing business. And that Casablanca was a landmark, but it
was a landmark because Arabs and Israelis -- people from all over the
Middle East, government and private sector, came together. Now, as you
said very clearly, in Amman people are looking for results -- business
people want results. And we are doing our best to try to assure that
those results will come about. So I agree with you on that.
Let me tell you where I disagree with you. I disagree with you in what
I think was implied that somehow governments have all the answers to
this, and what governments need to do is to put a lot of money into the
Middle East. Frankly that is not going to happen, and that is not the
answer that should happen. There is significant funding going to the
Middle East now, from the United States and other developed countries.
But I think it is unrealistic to expect that we are going to be able to
persuade our legislatures, our congresses, and our people, to use
public funds for development in the Middle East and North Africa. We
will continue to try to find ways to leverage our funds; but you in the
Middle East need to understand that we have needs at home, and there is
not a feeling that we should or can provide massive new flows. Now,
that's maybe the bad news.
The good news is that what we know from the history of economic
development is that's not the way countries develop. What governments
need to do are two things. First of all, governments need to get out
of the way. Governments need to open up their markets. They need to --
and that is something that we can do. I know that Morocco for example
is now engaged in trade negotiations with Europe. You have a very
critical market in Europe, and you're talking about how to open up that
market more for your product. So that's one thing our governments can
do. Another thing your governments can do is to move toward this
deregulation, privatization; and, again, I know that it is happening in
Morocco. So governments need not to get in the way; governments need
to get out of the way.
Now, finally, the other thing that governments can do is to try to
provide finance in those areas where the private sector will not do
financing, or to try to provide incentives for the private sector to
act. That is the idea of the Middle East Development Bank. That is the
idea of our OPIC, which guarantees private sector investment against
political risk - - and there is political risk in the Middle East.
That is the whole idea of the Amman conference.
So I think you have to decide what development works. All the history
shows us, all the economic analysis shows us, that large government
projects funded by large government institutions and foreign aid, are
not what create development. And that is why the focus of the Amman
summit is on the private-public sector partnership.
QUESTION: I will try to keep my answer very short, so as to avoid the
accusation of Israeli air time domination. But I would like to say two
things. Firstly, I do believe that the answer to real economic
cooperation in the region is in creating one economic entity between
Israel, the Palestinians, and at least Jordan for totally free movement
of goods, services, manpower, and capital. It's a bit early to talk
about an economic market of the Middle East, but I think least these
three countries should enjoy totally free trade and free access. And
the other thing is that I would urge both the United States and the
European Union to try to grant the Palestinians and the Jordanians, at
least for the time being, the same market access and the same benefits
that they give Israel in its free trade agreement, and to give the same
kind of benefits to products that will come out of the industrial zones
which are being discussed. Thank you.
MR. FOUCHEUX: Thank you again, Mr. Gilamon (sp), in Tel Aviv. And we
return finally to Casablanca once again for a final question from our
participants there. Please go ahead again in Casablanca.
QUESTION: Okay, hello, I am -- (inaudible) -- economic news magazine
and Moroccan TV. I heard in the beginning you talking about the region
of prosperity -- we were talking in the presentation about the Middle
East and not Africa. You answered to my colleague, the economist in
Morocco, about negotiations which are engaged from Europe with Morocco,
and I want to have your point of view about the -- (inaudible). We
talked a lot about the Middle East-North Africa, and I think personally
that Europe has to act a lot for peace in this area, and we feel that
the U.S.A. wants to act in this way, but that Europe doesn't enough,
particularly in free trade. And Morocco is not the only country who is
concerned. I think this whole zone is concerned. And in this way we
can -- (inaudible) -- to co-prosperity area, co-prosperity zones for
peace and co-development.
MS. SPERO: You're right in saying that Europe can and should play an
important role. I must say that we have been working very closely with
the Europeans in aid to the Palestinians, and I want to be sure that we
are on the record as saying that the Europeans, both at a national
level and at an EU level, have been quite generous. So they are major
donors to the region.
As you probably know, Europe is not only negotiating a number of trade
agreements throughout the region -- they are going to begin
negotiations with Egypt, I understand. You have had ongoing
negotiations with them. So there is an opportunity for them also to
provide a market. And there are a lot of difficult issues, as you know
-- agricultural concerns, smaller manufacturing -- these are tough
issues that are going to have to be worked out. We hope that Europe
will be open for the markets, for the products of the Middle East.
And then finally I should add the European Union is looking toward a
Mediterranean policy. There will be a meeting in Barcelona later this
year -- I believe in December -- where the Europeans and people from
the Mediterranean countries, which really is the Middle East and North
Africa -- will be getting together to talk about how they can build a
more prosperous Mediterranean. So I believe that Europe is looking to
the Mediterranean. I believe that there are opportunities for trade. I
believe there has been assistance. As you know, there are long-
standing ties -- Morocco and France, for example. I note that your
colleagues seems to have a French-language publication. So there are
very close ties there, and Europe can and should -- and I must say is
playing a role already in the Middle East.
MR. FOUCHEUX: And as we end today's program I would like to thank once
again Undersecretary of State Joan Spero for being with us. Some
important issues, and we appreciate your time. And our thanks as well
to all of our friends in Tel Aviv, Jerusalem, and Casablanca, for their
part in an interesting discussion.
To the top of this page