ByAlex Brummer, Alex Brummer
3 min read
With the support of Britain, the European Union is preparing to roll-out an unprecedented package of financial aid to support a Middle East peace initiative led by US Secretary of State John Kerry.
A prominent group of foreign and finance ministers are now being brought together to co-ordinate a financial package under the guidance of Catherine Ashton — a British Labour politician and the EU high representative for foreign affairs and security policy.
There is now an overriding view among analysts that strong economic underpinnings are key to sustaining a stable two-state solution.
Last year, representatives from Israel, Jordan and the Palestinian Authority signed a groundbreaking water-sharing deal at the World Bank in Washington — after 11 years of negotiations.
As part of his Middle East peace initiative, Kerry is seeking £2.4 billion from private investors to boost business prospects in the West Bank.
He believes the financial injection will increase the total output of the Palestinian territories by around 50 per cent, slash unemployment and the political dissent and social unrest that comes with it.
There have long been examples of successful cross-border commercial ventures between Israelis and Palestinians. For example, Israeli carbonated drink manufacturer SodaStream, located in the West Bank, employs around 1,100 Palestinian workers.
But overseas investors have been reluctant to back such cross-border endeavours because of the anti-Israel boycott, divestment and sanctions movement (BDS).
The Co-operative Group is a case in point as the only major grocery chains to boycott produce from the disputed territories. Another case comes from the decision of Dutch pension asset management company PGGM — a multi-million pound group — to divest from five Israeli banks because they finance Jewish settlements in occupied territories.
Institutional undertakings are in place to further economic co-operation between Israel and the Palestinian territories — namely the World Bank and the Office of the Quartet, headed by Tony Blair.
However, aid that could be used to preserve the identity and status of Palestinians, has actually been expended on such institutions.
As a result, the Jerusalem-based Center for Near East Policy Research, which is dedicated to investigative research on the Israeli-Arab conflict, has launched an initiative to draw attention to the vast resources spent on preserving the status of Palestinian refugees. The United Nations Relief and Works Agency (UNWRA) was set up in the 1950s with the aim of providing aid and services to Arab refugees and their descendants.
More than 50 years later, it has become an aid behemoth and could be seen as an obstacle rather than a support for the peace process — despite operating under the slogan “Peace Starts Here”.
In the early 2000s, I travelled with Gordon Brown, the then chancellor, to a fine school in Ramallah. The school was partly funded by the British taxpayer and run by UNWRA — of which the UK was justifiably proud.
However, what is perhaps less known is the sheer scale of UNWRA activities. It is one of the largest UN agencies and employs more than 30,000 people across the region.
The organisation has a budget of just over $1 billion a year and assists around five million refugees across five territories — Jordan, Lebanon, Syria, Gaza and the West Bank.
While most foreign aid is granted to take populations away from dependence on overseas assistance until they become economically self-sufficient, the role of UNWRA differs. Uniquely, its role has been to preserve the status of refugees in the camps that the service is preserved when it comes to reaching final status accords on a two state solution.
It argues that donor nations should make their contributions dependent on a different kind of education that prepares students for a constructive and fulfilling life that extends to their economic prospects.
Assuming that a final status for the refugees can be agreed as part of the current peace talks, it ought to be possible to go further and dismantle or reform the UNWRA so that the funds it has, while continuing to support education among other things, are directed into entrepreneurship.
It is not just cross border businesses that the region needs — but an end to dependency on foreign financial aid.
American tycoons Bill and Melinda Gates, in their 2014 annual letter, predicted that by 2035 “there will be no poor countries left in the world”.
They predicted that nations will pick tips from their more productive neighbours in around 30 years — and boost their financial prospects.
That idea ought to be the core of the Kerry-Ashton plans for the Middle East.
The Palestinian territories could thereby learn from Israel’s dynamic, technologically skilled corporations, which are now leading the way across the globe.
Alex Brummer is City Editor of the Daily Mail