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U.S. Department of State
95/07/25: Joan Spero on the Amman Economic Summit
Office of the Coordinator for Business Affairs


                                 INTERVIEW OF
                   UNDER SECRETARY OF STATE JOAN SPERO
            FOR BUSINESS, ECONOMIC AND AGRICULTURAL AFFAIRS
                       ON USIA'S WORLDNET TV PROGRAM
            AND AUDIENCES IN AMMAN, CAIRO, KUWAIT, AND RIYADH
                                 JULY 25, 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 Amman, Cairo, Kuwait and Riyadh, our subject is
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 once again to have as
our special guest Joan Spero.  She is the undersecretary of state
for economic, business, and agricultural affairs.  Mrs. Spero,
welcome back to our show.  It's a pleasure to have you with us.

MS. SPERO:  Thank you, it's a pleasure to be here.

MR. FOUCHEUX:  I understand you have some opening comments?

MS. SPERO:  Yes, if I may, I'll just take a minute or two to talk
a bit about the Amman economic summit.  Let me start, Rick, by
saying I'm delighted to be here and to have this chance to talk
to all of you out in the region about the Middle East-North
Africa economic summit.  As I believe you know, it is going to be
scheduled for October 29 through 31st in Amman, Jordan.

As a co-sponsor of the Amman summit, we in the United States are
welcoming this opportunity to share views about the summit's
potential to advance regional economic development, and to
explain why we are encouraging government leaders and business
people alike to attend.

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 recent history.  The progress made by the parties
over the last year is really remarkable.  On all fronts there is
a clear sense of momentum.  Peace and security are essential for
the economic development of the region.  As you know, the
recently approved bill providing full debt relief for Jordan
signifies our commitment in the United States to support those
who take risks for peace.  We know that peace cannot last without
concrete benefits for the people of the region -- benefits that
are only possible through increased trade, investment, and
entrepreneurship.  As you know, the Middle East and North Africa
are rich in 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 by liberalizing trade policies,
reducing regulation, privatizing industry, and improving the
investment climate.

As a former executive in the private sector myself, I know that
the primary concern of business people is good investments.  And
that's why the summit organizers are laying the groundwork for
business and economic development opportunities at the summit. 
And let me describe what they're doing.

First of all, moving forward on regional institutions:  a
development bank, a business council, and a tourism board, all
with regional governmental and private sector partnership. 
Second, encouraging regional states to liberalize economies and
to develop a free-market approach to development. Third,
deepening contacts both between 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
one country in the region.

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 very successful Casablanca summit
of last fall.  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 nine
key sectors will provide opportunities for business people and as
government decision-makers to exchange experiences, pursue
opportunities, and follow up on deals.

Both President Clinton and Secretary of State Christopher are
personally committed to the success of the summit.  Secretary
Christopher will lead the delegation, and it will include
Secretary of Commerce Brown and other senior U.S. government
officials.

We in the United States have no illusions that prosperity will
come quickly or easily to the region.  The road to economic
development is always a difficult one.  But the Amman summit 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 in the economic development more
broadly in the region.

Well, I've spoken enough.  I look forward now to answering your
questions and hearing your points of view.  Thank you.

MR. FOUCHEUX:  Thank you, Ms. Spero.  All right, let's get to the
questions and comments from overseas.  We begin with questions
from Amman. Please go ahead in Amman.

Q:  Well, thank you very much.  My name is Thabet Taher. I am the
chairman of the executive committee of the private sector in
Jordan.  Before giving any question, I would like to thank you
very much, Ms. Spero, for your opening comments, and at the same
time I would like to express our thanks to the United States
administration for the efforts they are exerting to contribute to
the success of the conference.  And on this occasion allow me to
extend a warm welcome to you and to all the friends who will
participate in this conference.

This topic of our dialogue today, Dr. Spero, is the Amman
economic summit, agenda for peace.  And in your opening comments
you stress the importance of peace and security.  When we talk
about peace, our real concern is to make certain that we are
building a sustainable peace.  In that connection, I have the
following question:  So far the American administration plays a
major role in making peace between governments in the Middle
East, yet building peace between peoples in the area is still far
from becoming a reality.  One, among other reasons for that, is
that the -- (inaudible) -- of peace are not yet felt.  Given the
fact that Jordan's resources are so limited, and support is badly
needed for take off, what role can the United States
administration play to support the serious efforts of the
Jordanian private sector in developing an economy which will make
peace sustainable?

And since the Amman summit is expected to be a venue for private
investment contacts, what will the U.S. administration do to
encourage the private sector, and the U.S. to participate in the
Amman summit, and to cooperate with our private sector in the
development efforts in the region? And certainly we would very
much appreciate getting in advance the names of the American
companies that will participate in the conference, so that we can
try to arrange ahead of time meetings for those companies with
their counterparts here in Jordan, so that we can really
establish good contact and make use of the time available during
the conference.  Thank you.

MS. SPERO:  Well, thank you, Mr. Taher.  If -- if you may, I'd
like to adopt your concept of sustainable peace.  I think it
really captures the idea that I tried to convey about
underpinning the political side of the peace with the very clear
need to have the economic development and to have real benefits
for the people.  So I am going to adopt that term, if you permit
me.

Your question was really what are we in the United States doing
to try to support this sustainable peace, particularly in regard
to Jordan.  And let me just tick off a couple of things. First of
all, as I mentioned in my opening comments, our Congress has now,
with the very strong urging and very strong, active pressure from
our President, passed a bill that contains significant debt
relief for Jordan.  We have believed that one of the best things
we in the United States can do is to try to help ease the fairly
significant debt burden that Jordan has.  Really debt relief in
many ways goes further than new flows of funds in order to free
up domestic funding and to relieve the burden of having to repay
foreign debt.  So we are very, very pleased about that.  It's
been -- this is the second step in Jordan debt relief that we
have taken, and we think this will go a very long way to
relieving significant burdens on Jordan.  We've also urged other
developed countries, and tried to show them the way by our debt
relief, and we hope that this will perhaps set a pattern for some
of the other developed countries.

Now, more specifically, on supporting the private sector, let me
just mention three things.  First of all, of course, the Amman
summit:  That is the whole idea of the Amman summit -- to show
that Jordan and the rest of the region is open for business.  It
will be an opportunity for Jordan, and indeed for all the
countries of the region, to showcase the strengths of their
domestic economies -- what resources you have, what policies you
are pursuing.  And so it's a chance for the government, if you
will, to show off. It's also a chance for the private sector to
make contacts.  You know I come from the private sector myself,
and I know particularly for smaller- and medium-sized companies
that don't have the international reach that some of the
multinational companies do, these kinds of meetings and
encounters, if they are structured properly -- and we believe
this one will be -- provide plenty of opportunity and time and
facilities for the private sector to meet counterparts both from
around the region as well as from abroad.  In the end, you know,
we have an expression in the United States:  You can lead a horse
to water, but you can't make it drink.  The private sector is
going to have to do the drinking in this case, but we can do a
lot of weeding, and we can try to make the water as sweet as
possible.

Now, the final point that I'd like to make is on the Middle East
Development Bank.  The Middle East Development Bank was an idea
that came from the parties in the region, including Jordan, along
with Egypt, the Palestinians, and Israel.  And it is now under
active discussion among about 30 countries who are participating
in an experts negotiating group.  We hope that by the time of the
Amman summit there will be political agreement to launch a Middle
East Development Bank.  That bank, you should know, will be
heavily oriented towards the private sector.  We see it as being
a new and unique kind of bank.  It will focus on regional
development, on facilitating cooperation among the parties in the
region, but heavily on the private sector.  So there is another
opportunity for the private sector.

And then finally you asked about what we in the United States are
doing with our own private sector, and it's a good question.  We
are working very aggressively with our private sector to educate
them to the realities of the Amman summit and to the
opportunities.  We are offering to work with them to try to
remove any impediments or problems in various projects that they
are now thinking of or actively engaged in negotiating in the
Middle East.  So we are working hand in glove with our private
sector -- not only to get them there, but also to get them
excited and to try to facilitate the development of projects.  So
I think we're on the case.

Q:   Thank you very much.  My name is Ummaya Touqan. I am the
director general of the stock exchange in Jordan.  And I am also
the coordinator of the Amman summit.  Of course together with the
private sector we are trying to hopefully come to a successful
conference.  May I first join Mr. - (inaudible) -- in extending
our deep gratitude to the U.S. Administration for their efforts
in making -- or in preparing the ground for a successful summit. 
We really appreciate the efforts of the State Department, the
Department of Commerce, and you, Dr. Spero.  Of course we
appreciate very much your efforts, including your appearance
today.  So thank you very much for all you're trying to do.

I'd really like to just hear from you -- how do you view the role
of other countries, other than the U.S.?  Of course the U.S. is
the main co-sponsor, and a chief co-sponsor, is doing a lot.  But
how do you view the role of the European Union, Japan, and others
major industrial countries in the preparation for the summit? 
And the second point really:  There are some concerns, at least
with the Jordanian private sector, that most of the projects
during the summit will be mega-projects and only multinational
big companies will get involved.  So how do we allay the fears --
that smaller companies will also have an equally important role
in the summit?  Thank you.

MS. SPERO:  Well, Mr. Touqan, may I return the compliment, and
say that you have a very big responsibility on your shoulders. 
You are doing a superb job.  And we know that really with the
leadership of Jordan -- and, after all, Jordan is the host --
there will be a successful summit.  So we really see you as the
boss, and we are working with you.

Two questions then.  First of all, how do we see the role of
other countries?  You mentioned particularly developed countries,
but I would add the countries of the region as well.  Actually, I
feel that many of the long-term knowledge of the region on the
part of business resides heavily in the European countries:  they
are much more proximate to the Middle East and to North Africa,
they have had a lot of experience.  And while our companies
certainly know the region -- particularly the large companies,
the natural resources companies -- that there is a great depth
and historical experience in Europe for example in dealing with
the region.  So we have been working with our European colleagues
-- even yesterday Secretary Christopher had a meeting with
Foreign Minister Solana of Spain and with Sir Leon Brittan. Spain
is now in the presidency of the EU, and Sir Leon Brittan is the
vice president of the European Community.  He urged them to be
active and to provide leadership for the business community in
Europe in support of the Amman summit and the Middle East
Development Bank.  So we are actively urging our compatriots in
Japan, in Europe, and elsewhere, to participate and really to get
their businesses involved.  I think that is really the key thing.
And, again, we're trying to play a bit of the role model here.

Now, I would also add that it is not just going to be businesses
from Europe and Japan and the G-7 countries.  Really we need the
active participation of businesses in the region. If the
Europeans know the Middle East well, those from the Middle East
know the Middle East even better.  And I think we need, Mr.
Touqan, to actively work, as we are already doing, to make sure
that we get very good representation from the region, from
throughout the region.  I think that is what is going to provide
sort of the fertile opportunity for cooperation.

Now, finally, and that leads me to the last point, and the last
question you asked, which is about smaller companies.  You are
absolutely right:  the big companies -- we welcome them of course
in Amman, and there will be some large projects we hope that will
come to fruition or will be developed in Amman.  But the real key
in the long term is going to be getting the small- and
medium-sized enterprises active in bringing their capital to the
region, in working across borders, and creating development.

We know in the United States, for example, and throughout the
developed world, that employment is really created largely in
small- and medium-sized enterprises; not in very large, heavily
capital-intensive enterprises.  And one of the real needs of the
region is for employment.  So we in the United States have been
working heavily with smaller companies, smaller entrepreneurs,
with investment bankers and merchant bankers who know the region
well -- many of them who originally came from the region -- to
try to encourage them.  And I think, Mr. Touqan, what is going to
be very important is that as the invitations go out -- because
this conference will not be as massive in size as was Casablanca
-- it is going to be much more focused -- as we -- we must make
sure that the whole spectrum of industry is invited, and we are
going to have to focus heavily -- and I give you that challenge
-- on making sure that the smaller companies do participate --
it's very critical, you are absolutely right.

Q:  Well, I want to ask just another question, if you don't mind,
Ms. Spero.  In that case I would refer to the remarks which you 
mentioned about writing off the debts of Jordan. In fact, the
American decision to write off Jordan's debt towards the U.S.
government was received with a great sense of appreciation in
Jordan.  It is perceived as a step toward building a sustainable
peace in the area.  Nevertheless, Jordanians have high
expectations with respect to increasing the U.S. economic
support.  Given the fact that the Israelis are still the
recipients of the largest amount of foreign aid from the U.S. per
capita.  And the fact that the Israelis enjoy the highest
standards of living among their immediate neighbors, and that per
capita income is Israel is more than tenfold of that Jordan, do
you see any possibility of providing whatever volume of foreign
aid the Americans would want to extend in the future in a manner
that would augment a sustainable peace and address this
imbalance?

MS. SPERO:  Well, there is no doubt that our aid resources in the
Middle East are heavily focused on sustaining the peace, as you
so correctly put it. But let me be very honest with you:  aid
budgets in the United States are going down; they are not going
up.  As you know probably very well, it was only through the very
strong leadership of President Clinton that we were able to
achieve this debt forgiveness for Jordan.  We are in a
budget-cutting environment in the United States.  We are cutting
for domestic programs, and we are cutting for international
programs.  And I would be dishonest with you if I didn't tell you
that I don't see massive flows of aid.  I think many of us wish
that were possible, but we are realistic and we know that in the
current environment, while we will give aid, while we do give aid
-- we give economic aid, we give military assistance -- we give
all kinds of support -- that I don't think that the region should
be expecting massive flows of public assistance.  It's just not
in the cards.  And that is one of the reasons that we are looking
to a variety of ways to mobilize capital for the region.  So
that's my first point.

My second point is the following:  One of the things we've
learned over the years about economic development is that
governments can't make economic development.  That is what has
been learned by the failure of statist policies, whether those
policies are in Russia or those policies are in Africa, or those
policies, quite frankly, are in the Middle East.  What the
economist and everyone else knows today is that the route to
development is encouraging the private sector.  If you look at
those countries that have really achieved a take-off, it's been
those countries where the government has created and played a
role by creating a very favorable environment for the private
sector.  Take a look at many of the fast-growing countries in
Asia.  So in a way this idea of massive public assistance, even
if it were possible, isn't the answer.  And what we need to do
today is to figure out how to bring other forms of capital to the
region.  The Middle East is a capital-exporting area.  Large
amounts of capital flow from the Middle East to other parts of
the world.  They sit in banks around the world, because the
owners of that capital do not feel there are productive
opportunities, or do not feel that they have the safety and
security of their money if they keep it in the region.  We need
to change that.  And it is when you bring the private capital
back, the regional private capital, leverage that with public
funds from the United States, from the World Bank, from various
other funds - - from the European Investment Bank, or the various
Gulf funds -- that is when the region will begin to blossom.  And
that is really truly the long-term answer.

MR. FOUCHEUX:  Thank you very much, Amman.  Cairo is next with
questions or comments for Joan Spero.  Go ahead please in Cairo.

Q:  Good afternoon, Ms. Undersecretary.  This is Inas Nour,
diplomatic correspondent of the daily Al-Ahram newspaper.  My
first question going to you, I am very much appreciating it if
you can answer.  Now we are hearing about different mechanisms to
finance the future projects in the framework mentioned today. 
Would it be an investment bank?  Would it be a fund to finance a
kind of feasibility studies?  I learned that there are some
differences between the European side, some Arab Gulf countries,
and the states.  I know Egypt is favoring setting up the
investment bank, through your contacts recently with the European
side, with the Arab countries participating in this meeting.  Can
you elaborate about this point?

MS. SPERO:  Yes.  Ms. Nour, you are very well informed I think
about the kinds of discussions that have been talking place in
this experts group working toward a Middle East Development Bank. 
As I mentioned earlier, the four parties of the region, including
Egypt, really originated this idea, and early on the United
States said that if a -- the proper structure of a bank could be
developed that we would be supportive of such a bank.  We weren't
going to sign a blank check, obviously, but the experts have been
working for some time in the direction -- a very positive
direction, we believe -- to create a bank that would not be --
that would be very modern -- as I said, that would encourage
regional cooperation, very heavily regional projects, the private
sector.  It would be relatively small, and it would be sort of a
catalyst.  And, coming from the private sector, I see it almost
as a merchant bank that could put together deals bringing
together both private and public sector capital that exists
around the world.

So the United States is very happy with the direction that these
negotiations are going, and we are very optimistic that in Amman
there will be the announcement of the creation of a bank.

Now, some of the European countries in particular have been a
little bit more skeptical.  They have said, well, before we jump
in with a bank, perhaps we need to talk about a fund that could
do feasibility studies or pre-feasibility studies.  Now, what I
see happening is that gradually these two ideas are coming
together.  We have not yet bridged the gap, so I don't want to
say that there is an agreement; there is a lot more work to be
done.  But what we from our side are recognizing is that you
can't create a bank overnight.  It will take a little bit of
time.  So that while we are developing the capacity, the funding,
the structure for a bank, it would be a good idea to have
something that could get up and running quite quickly.  So maybe
this idea of a fund could be merged with the idea of a bank, with
a fund being phase one, if you will, and a bank being phase two. 
So these are the kinds of ideas that are being discussed.  I
don't want to say that everyone has signed on to this idea, but I
think there is a narrowing of differences.  There was a meeting
in Moscow last week -- as you know, the Russians are the
co-sponsors of the overall Madrid process -- they hosted a very
good meeting -- and the experts are making a lot of progress.  So
that is sort of a photograph of where we are today.  I think in
the end the United States, again assuming we can get the right
structure for a bank -- we have to be able to persuade the
American people and the American Congress that this is really
justified.  But assuming that we get the right structure for a
bank, we will be prepared to go ahead, even if everyone else is
not prepared to go ahead.  So I am always an optimist.

Q:  Thank you.  This is -- (inaudible) -- I am a partner with the
international law firm of Baker & McKenzie, and a member of the
Egypt -- (inaudible).  I attended the Casablanca meeting, and I
felt that it was a very successful meeting.  It certainly brought
people together, and I certainly look forward to Amman, and I
hope it will be equally successfully, and certainly get into more
details of methods of cooperation.

My question to you reflects to a certain extent some of the views
of the private sector.  As you know, the private sector needs to
feel comfortable about doing business in the region.  We need to
create a system of predictability, transparency and consistency,
when we talk about the actual doing business aspects.  In
addition, I feel we need to create a system of incentives.  We
have to be able to convince the private sector that it is to
their benefit to work together, and actually more benefit to work
together within the region than within outside the region, which
as you very well know has been traditionally the case.  So my
question is:  Are there any concrete proposals that are being
looked at this point in time that will be discussed in Amman that
will facilitate the movement of investment, goods and services,
as well as people, that would make it more advantageous for the
people in the region to work together, rather than working
outside the region?  And I basically -- specifically look to
certain issues such as, for example, when we talk about movement
of goods -- are there any discussions or proposals to make a
tariff special incentives on tariff issues for example? Of course
this could be a way toward more integration in the region -- but
that's not really what I am talking about now.  I am talking
about some sort of initial tariff arrangement to make for example
goods flow easier.  Are there any proposals in this regard?

MS. SPERO:  Well, you've raised a really very critical point,
because, as you say, the orientation of business in the region
has either been inward-looking, in sort of protected economies
with very heavily state-dominated industries, or outward -- to
Europe or to the United States, and not across borders.  And
that's not going to be solved overnight.  But I think Amman can
take some steps.  But Amman is only a landmark along the way. 
Amman will have to be followed up, as I think your question
inferred.

The peace process is the essential first step, because unless
there is peace and security in the region the private sector is
not going to feel comfortable investing outside its country,
unless it's taking its money to invest in the developed world. 
So the peace process is really the sine qua non.  But the peace
process is not enough.  As you well know, there has been peace
between Egypt and Israel for many years, and yet the trans-border
business environment has not been conducive.  And that leads me
to a second point.  I think national governments can play a role
here in saying, you know, it's okay -- it's acceptable -- we will
not look with disfavor if you do activities with your colleagues
across borders, whether they are in Jordan or Israel or the Gulf,
or Algeria or wherever.  So I think that there needs to be almost
-- and you probably understand this better than I do -- there
needs to be the political signal I think, and I think governments
can play a role there.

Third, I think that governments need to move in the direction, as
you suggest, of opening trade and opening their markets
generally.  Amman is not going to be a trade negotiation.  But I
mentioned as one of the goals of Amman is to push forward this
agenda of liberalization, if you will -- liberalization,
privatization, and reducing trade barriers.  And I think,
unfortunately, a lot of the thought about reducing trade barriers
-- and I don't say this is wrong, but it's not enough -- has been
vis-a-vis let's say Europe, or vis-a-vis the United States.  We
have a free-trade agreement -- a very long-standing free-trade
agreement with Israel.  There has been talk of extending that to
the Palestinian-administered territories.  The Egyptians have
talked to us about what prospects there would be for free-trade
agreements. Egypt and Morocco and others are talking to Europe,
as part of your Mediterranean strategy, about negotiating
free-trade agreements.  And all that's excellent.

But what you're really raising is that how can we encourage free
trade within the region and among the members of the region
itself.  That is beginning to happen between Israel and the
Palestinians, between Jordan and Israel.  We need to push that
further.  And I think, Mr. Touqan, if you are still listening,
this is something we need to think about -- how we can explicitly
endorse, push, promote, prod in Amman.  So I would like to take
that as a suggestion.

Now, finally, one point that I should make is that for all of
this to happen, and for there to be flourishing trade, the Arab
boycott is going to have to end.  That is one of the major
impediments to the region.  Gradually the boycott is withering
away or declining.  But I think elimination of that boycott would
be a very powerful signal that the region really means it about
free trade.

Q:  Mrs. Undersecretary, this is again Inas Nour.  Concretely
spoken, what is the United States undertaking and conducting for
the time being, and before the Amman summit, to ease the Arab
fears raised by the idea to have this Middle Eastern market?  And
we notice that still the Syrian party is not participating in
this function.  Did you have any contacts lately with Damascus to
convince them to participate?

And I might add another point which is of interest.  What are the
plans to convene the next (tranche ?) of meeting for the joint
presidential council, the American --

MS. SPERO:  The Gore-Mubarak?  Is that the one you mean?  Yes. 
Well, first of all, about the fears, we are not going to change
the psychology of the region overnight -- and the U.S. can't
solve that; that is something that the region has to do.  In
fact, we see that the Casablanca and Amman summits, as well as
the hoped for Middle East Development Bank, can provide for a, if
you will, confidence-building.  You know we have this term on the
political side -- it's getting parties together, getting them to
understand that they maybe can work together.  This certainly
worked with the Israelis and the Palestinians, with the
facilitation at Norway, and leading to the Declaration of
Principles.  It is something that has been going on through the
Middle East peace process, the Madrid process, by working
together in the so-called REDWG, the Regional Economic
Development Working Group, working on water projects, working on
electricity.

Really I think we need to see Casablanca, Amman, and the Middle
East Bank as part of this confidence-building process.  Now,
Casablanca was important because it took place.  I mean, it was
so unique that representatives from throughout the region and the
developed countries actually sat down -- I saw them -- they
exchanged business cards, they took addresses, they talked about
things.  We need to move that a step further in Amman, and try to
nurture actual outcomes; as I said, actual projects, private
sector deals, et cetera.  And so we are working very hard.

But you also in the region need to work hard.  The U.S. can't
wave a magic wand and make this happen.  So we need your support
in trying to encourage participants from the region -- not just
the governments, but the private sectors -- to come.  Now
obviously we are doing that through -- we are doing that through
our embassies.  I know that Jordan is working very actively. 
Their foreign minister has traveled, for example in the Gulf area
-- encouraged participation.  We welcome all to come.

So I think that we just -- and, frankly, our dialogue today is
part of that effort, to say this is really important -- let's pay
attention.  It's important for our economy and it's important for
the peace process.  So whatever way we can get the message out,
we're doing it.  And I myself will be traveling to the region
before the conference, in September.  I hope to visit several of
the capitals, and continue to take the message.  So we hope you
will provide some support for that.

Now, as far as the private sector or the presidential advisory
group, some of you may know that this was set up -- there is a
commission between President Mubarak and President Clinton.  Vice
President Gore has taken active leadership in that commission,
and I myself have been working with the Vice President on that. 
A very critical part of that commission, which is
inter-governmental, is this presidential group, which consists of
private sector representatives -- we have one sitting there in
Egypt today -- from the Egyptian private sector and from the
American private sector.  They've already been working together,
talking about how in very practical ways we can work together to
promote economic development in Egypt.  To me that's one part of
this larger process of promoting private sector help to the
government -- it's not just the government helping the private
sector; it's private sector telling the government, "Here's what
you can do for us -- here's how you can get out of our way --
here's how you can allow us to flourish."  So to me that is
really a building block for the larger effort.

We don't, as far as I know -- but I may be corrected by Mr. Helmy
-- have a date set for the next meeting. I am going to be meeting
I believe in two weeks with the U.S. head of the private sector
group, who is from AT&T. He's going to give me a report on your
recent meetings, and we're hoping that the Vice President will be
able to convene the full commission in -- I guess in Egypt --
this fall.  So we are working away, and we're very, very excited
about this process.  And, as I say, the private sector is part of
it.  It is sitting there with the government, advising the
government.

MR. FOUCHEUX:  Thank you, Cairo.  Now to Kuwait for their
questions.  Go ahead please there in Kuwait.

Q:  Thank you very much.  I am -- (inaudible) -- of Kuwait.  The
average man and woman in the Gulf believes that paying for peace
is much better than paying for conflict.  However, the people
here feel that it is the Gulf people who always almost bear the
financial responsibilities.  This is still good, but what is in
this forthcoming summit for the people of the Gulf?  Thank you.

MS. SPERO:  Well, first of all, let me respond to your comment
about the Gulf having the financial responsibilities.  It's very
clear that the Gulf is blessed with resources to enable it to
help its brethren throughout the region, and to participate in a
variety of international support programs. And that is welcomed,
and those who benefit from them are deeply appreciative.  But I
hope you've heard that the whole idea of the Amman summit is not
for government to be spending a lot of money.  The whole idea is
to try to mobilize existing resources in the private sector,
within the region and from abroad.  And to the extent that
government money is used, as in the Middle East Development Bank
concept, the idea would be to provide a little bit government
money for, as we say, priming the pump; that is, money that would
be available to help mobilize other sources.  So Amman is not
about fund-raising.  Amman is very much about mobilizing the
private sector.

Now, if we can mobilize the private sector for projects in the
region, and for cooperation in the region, then everybody will
benefit.  And Kuwait and the other states of the Gulf, all the
way to Morocco will benefit.  This is a region that has been
underdeveloped.  It's been underdeveloped because of the
instability in the region, it's been underdeveloped because of
the conflicts, as you very correctly point out, in the region. 
But with the coming of peace there is an opportunity for the
Middle East to flourish.  The desert will not bloom overnight,
but when the desert blooms it is a beautiful sight.  And Kuwait
and the other countries will certainly benefit from the
flourishing of business in the Middle East.  You know, we say
that trade and investment is not a zero-sum game; it is a
positive game -- it is a win-win. So if Amman can provide some
catalytic action, if Amman can provide some impetus to the
development of the Middle East -- whether that is in commercial
trade, in industry, in water, in electricity -- Kuwait and others
will benefit.  So I hope that the Kuwaiti business community will
participate actively, will provide leadership, will see where it
can do business.  And let me tell you in the end what business
people care about is profitability and making money.  And when
people see that the Middle East can provide a very healthy
environment for that, my guess is the Kuwaitis will be very happy
to be participants.

Q:  Well, that might lead me to another comment. I believe the
business community will be very happy to hear this question: 
Will there be any lateral opportunities to conduct business at
the summit?  For example, between the Arabs and Israel, or Arabs
and Americans?  Thank you.

MS. SPERO:  Absolutely.  The conference, the actual physical
organization, if you will, of the conference -- of course, Jordan
is leading it -- but the actual organization of the conference is
being done by the World Economic Forum.  Some of you may be
familiar with that organization; they run the annual meeting in
Davos.  And that annual meeting in Davos really is a model for
the kinds of things that can be done in Amman.  Let me explain. 
Davos provides small opportunities for business people to get
together.  They have an e-mail system, so if you want to contact
somebody and make an appointment, you can do it right over the
e-mail.  They provide conference rooms, they provide coffee
shops, they provide other kinds of facilities -- meeting rooms --
so there is an opportunity for encounter, there is an opportunity
for meeting.  And that's exactly the model that we are expecting
in Amman.

I know that I have done a lot of conversations with our business
people in the United States, and they have asked me the same
question. They said Casablanca was incredible, but Casablanca
didn't provide us enough opportunity to go beyond collecting the
business cards:  What we need is work beforehand, so we know who
we'll want to see in Amman -- or maybe we will have already
talked to them once or twice.  Then we need the facilities, and
we need somebody to help us get together.  So we have fed these
ideas into our Jordanian colleagues and into the World Economic
Forum, and that's exactly what they're planning.  We were told
that at Casablanca perhaps there were too many speeches by
government people.  Maybe there needs to be more down time for
business people.  So what the organizers are doing, what the
Jordanians are trying to do, is to make it as business friendly
as possible.

Q:  This is Samir Yassin from -- (inaudible) -- newspaper.  You
mentioned some highlights about the Middle East Development Bank. 
May I ask how do the Europeans feel about this bank?

MS. SPERO:  Well, I think you'll have to ask the Europeans
themselves. I will give you a perspective on it.  Just as there
is no one view about an issue in the Middle East, so it's very
hard to talk about "the Europeans."  I think there are
differences of view.  There are a number of Europeans who are
very enthusiastic about the bank, who I would say pretty much are
like the U.S., and Japan and Canada -- pretty much ready to sign
on.  There are other Europeans who are a little bit more
skeptical, and frankly I think some of the skepticism is if we
are going to put up some money for this we want to make sure that
this is an institution that is going to be needed.  So I guess to
be honest I would say that there is a spectrum of view in Europe.

But, as I said in my earlier answer, I believe that there is very
much of a coming together of the views of I would say the
majority of Europeans with I would say the majority of the
experts group, including those in the region, that this bank, if
properly structured, is a good idea.  So I guess I would say
there is a range of views.  I think there is growing support for
the concept of a bank.  But I don't want to say that every
European country has signed on to that concept, because that's
just not true yet.  I hope it will be true by Amman.

Q:  My second question is:  What kinds of financing and other
support will be available to encourage trade between the
countries involved in the summit?

MS. SPERO:  Well, obviously the bank we believe over the long
term is going to be a very critical factor.  And maybe I should
just explain that for a minute.  You know, sometimes when we
think of regional banks, like the African Bank or the Asian Bank
or the World Bank, you think of large government projects --
dams, electricity, et cetera.  Now, that will not at all be
excluded in this Middle East Bank, but we are thinking of it as a
much smaller institution.  We are thinking of it -- say,
capitalization of about $5 billion, paid-in capital of about a
billion and a quarter.  And that money would be used, as I said,
to leverage funds that do already exist in the World Bank, the
European Investment Bank, and the private sector.  So the Middle
East Bank can be a very important tool for the private sector.

Now, secondly, associated with this bank would be a regional
forum, where countries of the region could get together to talk,
and are expected really to get together to talk about regional
development.  You know, if you are going to do a water project,
you've got to talk about pricing of water, and if you are going
to do electricity grids, you have got to figure out how those can
be used, and how they feed into national systems, and what the
pricing of electricity is.  In all of those areas this is a
process and mechanism for opening up the borders.  So we see the
bank as over the long haul a key tool not just for financing --
although that's a very important effort -- but for getting the
government and the private sector to work together to break down
barriers.  Then of course there is a whole range of facilitating
trade.  Most of us in the developed world have facilities that
finance exports -- we have our Ex-Im; France has -- (inaudible). 
So there are all kinds of way of financing trade.  And then of
course there is the point that was raised by our Egyptian
colleague.  And that is if you all are going to trade in the
Middle East, you have to start to bring down your barriers.  You
have to start to reduce your trade barriers.  And I think that's
something that really needs to be talked about in Amman, and
where Amman could provide I think a very important landmark in
that area.

Q:  This is -- (inaudible) -- again.  You mentioned that you are
an optimistic, and that is very good.  I would like to see how do
you feel about the peace process and the fruits of peace for
everybody after this summit. Would this be bringing us closer a
few steps to peace, and the situation, the conditions and the
environments conducive to economic development and progress? 
Thank you.

MS. SPERO:  The simple answer is yes, I hope so.  And you're
right, I'm an optimist.  But I'm also a realist, so I don't think
I'm unrealistically optimistic. I don't think probably any of us
on this hook-up today would disagree that if there are not the
economic fruits of peace, the political peace will be very hard
to sustain.  As we said before, sustainable peace. And therefore
we really need to figure out everything we can do to promote the
development of the region.  And we are doing that in the United
States in lots of ways.  We are giving significant assistance to
the Palestinians.  We are working closely with the Europeans and
Japanese in countries of the region to promote the successful
take-off of the Palestinian administration. We are working on
mobilizing private sector support  through the Amman summit.  We
are part of a trilateral between Israel and Jordan, which is
trying to promote reduction of trade barriers and enabling
financial institutions to operate across borders.  We are doing
everything we can think of in the United States to try to support
the peace process.  But we can't do it alone.  It really needs
the people of the region.  If the people of the region do not
believe in the peace, and do not support the peace, then
everything we do will be for nought.  It is your region, it is
your economy, it is your prosperity.  And in the end it is your
people.  The peace is for you -- it's not for us.

MR. FOUCHEUX:  Thank you, Kuwait.  It's time now to turn to
Riyadh for questions or comments for our special guest,
Undersecretary Joan Spero.  Go ahead please in Riyadh.

Q:  Thank you, Dr. Spero.  My name is Abdullah Dabbagh from the
Saudi Chamber of Commerce, and I am posing this question as a
businessman, as a matter of fact.  To start with, I would like to
say that all of us here in the Middle East yearn for peace -- but
it has to be peace that is based on justice, peace where there
are no winners.  Therefore it could be a lasting peace.  Dr.
Spero, when we talk about development and investment, this is
basically  the quid pro quo for peace, the peace dividend.  But I
don't think we still have peace yet completely.  True, we have an
active peace between Israel and Jordan, we have a passive peace
between Israel and Egypt, and the Palestinians are still
struggling to get the basics.  The peace between Syria and
Israel, and -- (inaudible) -- and Israel is not in the offing
yet.  So I wonder -- I mean, what kind of momentum would that
conference carry without all the pieces in the place?

As a businessman, as you have indicated, the bottom line is
profit and money.  And unless peace is in all the areas --
because here you are not talking about bilateral conflicts, you
are talking about regional conflict -- so peace would be fragile
unless all the pieces are in place.  So I wonder if we are going
to focus on the political issues and on the economic issues in
this upcoming conference, while still many of the political
issues are outstanding.  Are we going to succeed or not?  Thank
you.

MS. SPERO:  Well, as you understand, and as you have really laid
it out, peace is a process.  Peace is a step-by-step process.  I
talked before about confidence-building.  And what we need to do
is to move forward, if you will, on the political track -- and
the United States is trying its best to be an active supporter
and facilitator of that political track.  It's come a long way
since the very important signing of the DOP.  It's really only
been almost two years, and it is remarkable what has changed in
the region.  And I think if Mr. Arafat and Mr. Rabin and Mr.
Peres had not had the courage to move ahead, even though all the
pieces were in place -- if they hadn't been willing to take that
first step, we wouldn't be talking about Amman today.

So I think we have to be prepared to say let's take it one step
at a time.  Let's leave the whole process open for participation
by everybody, and in Amman everybody is invited, so that Syria,
for example, would be welcomed. The Jordanians are certainly the
hosts, and they have certainly invited the Syrians -- so they
would be welcome there, even if they have not reached an
agreement with Israel.  So that negotiation between Israel and
Syria goes on. It has its ups, it has its downs, but it is in
process.  And what we need to do is to nurture the environment
around that process.  We shouldn't let any one single piece --
and I mean P-I-E-C-E there -- stop us from moving forward.

So I see these as mutually reinforcing.  And even though we don't
have a perfect peace, I think Amman can help build the
confidence, help build the prosperity, and hopefully reinforce
that political process which we hope will reach fruition.  We're
much further today than we ever thought we'd be, and I think that
the prospect, as you say of the peace dividend, is really
important.  We want -- just as we in the United States want
prosperity for the American people, so the leaders in the Middle
East want prosperity for their people.  And they know that as
long as they have to spend money at the level they've had to on
armaments, as long as there is no possibility for regional
economy, they can't bring those fruits of peace.  So we have to
take every opportunity that we can, and Amman is a very important
opportunity -- economically as well as politically.

Q:  My name is -- (inaudible) -- from United Press International. 
Dr. Spero -- (inaudible) -- Gulf countries, although they are
opposed to the proposed Gulf-Middle East Bank.  A, are you
prepared to go ahead with that idea, regardless of the Gulf
countries' stand?  And, B, if you decide to do so, will that have
an impact on things like the proposed -- (inaudible) -- capital
for instance?  Thank you.

MS. SPERO:  Well, actually it's my understanding that the Gulf
countries have by and large not made up their minds.  We have
talked about the Europeans so far, but we really haven't talked
about the Gulf states.  The Gulf states are participating in the
experts group.  They haven't said yes, but they haven't said no. 
So I think their minds remain open.  So we'll have to see what
they want to do.  I think it will be very important to have them
there, because they are part of the Middle East, and it's very
important that the countries of the Middle East and North Africa
join this bank and indicate their strong support of the economic
development of the region.  So we look forward to their serious
consideration.  We hope they will join.  And we expect in the end
that they will look very favorably on this bank.

Let me add one footnote, if I may.  I think actually from a
financial standpoint this bank is a very good deal for the Gulf
countries because, as your colleague from Kuwait pointed out
earlier, the Gulf states in particular have provided a lot of
financing for the region, and they have done very good things for
the region.  This is an opportunity to leverage that financing.
This is an opportunity to create an institution where the U.S.,
and hopefully Europe and certainly Japan and Canada, will also be
making contributions. And it's an effort to create an institution
that can package deals and can leverage other funding.  So I
would think that the Gulf states would see this as a very
economically wise institution -- an institution that would allow
them to leverage funds into much broader projects that in the end
are going to come back and benefit them if this vision of an
open, sustainable peace is achieved.

Q:  I am -- (inaudible).  Do you think this summit -- (inaudible)
-- than the previous summit, especially from the countries in the
Middle East? And are you making more effort to make your
objectives of the summit more clear to the other countries? 
Thank you.

MS. SPERO:  Well, very clearly, this summit is going to be, as I
said, much more focused.  It's going to be much focused on the
private sector, and it will be focused on particular industries. 
For example, there will be seminars and workshops targeted at
specific sectors, so that there will be very sort of practical --
as we say, roll-up-your-sleeves-and-go-to-work sessions.  And we
think that is something that is going to be a strong interest to
the business community.  The business community has told us -- at
least in the United States -- fewer speeches, more opportunities
for real knowledge about what's going on in countries, and more
opportunities encounter potential business partners or business
colleagues.  So we think that that's going to make this much more
attractive.

The invitations to this conference will be more limited. 
Casablanca was quite massive, and as I said quite wonderful; but
here the idea is to get people who really want to do serious
business and serious work.  So because it will be focused,
because there's going to be a real effort to mobilize the private
sector by the national governments, by the World Economic Forum,
by the United States and the other participants, we hope that it
really will be much more focused and very profitable.  It's
really an evolution of the Casablanca concept.

MR. FOUCHEUX:  Thank you very much, Riyadh.  As we end today's
program, I would like to thank Undersecretary of State Joan Spero
for being with us. It's a pleasure to have you with us.

MS. SPERO:  Thank you.

MR. FOUCHEUX:  We look forward to seeing you again.  Thanks as
well to all of our friends in Amman, Cairo, Kuwait and Riyadh for
their part in an interesting discussion.  In Washington, I'm Rick
Foucheux for Worldnet's "Dialogue."

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