Summary of Co-Sponsors at the Conference to Support Middle East Peace

Even before the signing of the 13 September Israel-PLO agreement, it was obvious to all parties that its implementation will require vast sums of money to help the economy of the Gaza Strip and Jericho. This meant foreign aid for the reconstruction of the economies of these areas, and also the mobilization of private investments. For this purpose, the U.S. government invited representatives of 50 nations end international organizations to make their contributions for school reconstruction, hospital renovation, highway building and housing, to name some of the most urgent needs. The meeting was held in Washington and was addressed by Vice-President Gore, Secretary of State Christopher, Treasury Secretary Bentsen, and Belgian Foreign Minister Claes. At the meeting it was announced that $600 Million were pledged and $2 billion were committed over five years, short of the $2.4 billion that the World Bank estimated was required for the coming five years. Following is the summary of the co-sponsors at the conclusion of the conference:

1. "The Conference to Support Middle East Peace" was held on October 1 in Washington. The Conference was jointly sponsored by the Russian Federation and the United States. With Russian co-chairs were Foreign Minister Kozyrev and Finance Minister Fedorev. The American co-chairs were Secretary of State Christopher and Treasury Secretary Bentsen.
2. The Conference brought together several overlapping circles of parties: members of the Multilateral Steering Group, a body that has overseen the multilateral track of the peace process; the gavel-holders of the working groups established under the Madrid process, namely the European Community, Japan, Canada, and the U.S.; the G-7 countries, which were invited in the Palestinian- Israeli Declaration of Principles to play a role in fostering economic development in the region; Norway; major donors from around the world; Israel and Arab representatives, including the GCC; and the World Bank and the United Nations. All participants gathered, first and foremost, to show support for a comprehensive settlement in the Middle East and for the Israel- Palestinian Declaration of Principles, which is an important step toward that end. Given the pressing economic and developmental needs in Gaza and the West Bank, the Conference set as its major objective the marshalling of substantial resources to meet immediate and longer-term needs.
3. The Palestinians and Israelis reported to the Conference on steps they are taking to implement and consolidate the Declaration of Principles signed on September 13. The Palestinians emphasized their intention to organize mechanisms to promote economic development and make effective use of external assistance. The Palestinians and Israelis made clear their intention to cooperate in fostering economic development in the West Bank and Gaza as foreseen in the Declaration of Principles.
4. The participants at the Conference agreed to support the historic political breakthrough in the Middle East through a broad-based multilateral effort to mobilize resources to promote reconstruction and development in the West Bank and Gaza. They acknowledged [that] the formidable challenges on implementing the September 13 Declaration of Principles will generate a broad range of assistance needs.
5. Participants shared the view that these needs require both immediate and longer-term action. The twin goals are to have near-term impact on economic prospects and living standards and to ensure that longer-term assistance lays the basis for launching sustained growth.
6. For the critical first phase of the effort, participants announced pledges totalling in excess of $600 million for the first year and $1 billion for the first two years. For the five-year period corresponding to the peace agreement, there were formal indications of planned support approaching $2 billion. Additional indications are expected in the future. Anticipating the continuation of donor efforts on the level announced for the first year, we are confident that the $2.4 billion of five-year external assistance needs identified by the World Bank will be met.
7. The donor community agreed to support urgent relief efforts, and to endeavor to meet other short-term needs including rehabilitation of existing infrastructure. It is recognized that an appropriate legal framework should be established on the recipient side in order to enable a smooth implementation of external assistance. Participants recognized that the United Nations Relief and Works Agency is already active in these areas. UNRWA, nongovernmental organizations, the EC, and other bilateral donors are prepared to move at a rapid pace.
8. Urgent and ongoing efforts must be directed at building the capacity of the Palestinians to organize and manage their own political, economic, and social affairs in the context of implementation of the September 13 Palestinian-Israeli Declaration of Principles. An important priority will be the development of effective revenue-sharing and revenue-collection arrangements. Participants resolved to initiate an extensive program of technical assistance to build institutions and to train personnel. The World Bank will establish and manage a Trust Fund to finance this kind of technical assistance, training, and feasibility studies over the next 12-18 months. Moreover, UN agencies including UNDP, along with other multilateral and bilateral programs and agencies, will provide both technical and financial assistance to support this institution-building effort.
9. In the longer term, the Conference noted the importance of promoting public and private investment to lay the foundation for launching the West Bank and Gaza on a path of sustained growth. Participants will carry out their assistance projects within the framework of a five-year program of public investment in physical and social infrastructure and productive capacity. The World Bank, in cooperation with other international financial institutions, will take a leading role in developing and helping to mobilize programs to support public investment.
10. The private sector and private investment will play a critical part in promoting sustained growth and development. The Palestinians acknowledge the importance of establishing an environment conducive to private investment. Conference participants intend to encourage trade and private investment through export financing programs and investment incentives.
11. Conference participants stressed the need to address the development of the West Bank and Gaza in its regional context. The World Bank has begun to identify regional infrastructure projects that would facilitate economic integration of the West Bank and Gaza with its neighbors. Participants emphasized that freer trade among the economies of the region would be beneficial. The four relevant working groups created under the Madrid process should continue their work on issues of regional economic development, water, environment, and refugees.
12. There was a shared concern, in a time of budget constraint and scarce resources, that this assistance effort be managed efficiently with maximum benefit for recipients. Donors and regional financial institutions will work closely with the World Bank to achieve this goal.
13. Participants recognized that many obstacles must be overcome on the road to peace, security, and economic development in the region. They expressed confidence in the ability of the Israeli and Palestinian people to sustain the hard labor of peace. Participants urged the Palestinian and Israeli representatives to move forward rapidly to implement the Declaration of Principles and pledged their support for the peace process, both politically and financially.

Source: Israeli Ministry of Foreign Affairs