Speech by Deputy Minister of Foreign Affairs Nawaf Massalha to the Conference of Donor States

Tokyo, October 15, 1999

Distinguished Colleagues, Chairman, Foreign Ministers of Japan and Norway, Chairman Arafat, Representatives of the Donor States, Ladies and Gentlemen,

The peoples of the Middle East, Arabs and Israelis alike, have experienced acute suffering and hardship. Over recent decades, relations between the inhabitants of our region have been marked by painful and bloody armed conflict.

Nevertheless, slowly but surely, the peoples of the region and their leaders have begun to recognize that it is incumbent upon us to break this vicious circle which has held us back, and to adopt a new approach which will lead us on a more hopeful path.

This recognition led to the convening of the Madrid Conference eight years ago, and the launching of the Middle East peace process, which has resulted up until now in the Oslo accords and the peace treaty with Jordan.

The Government of Israel, as well as the Israeli people, are determined in their commitment to bring the negotiations with our neighbors to a successful conclusion. The actions of the present Israeli Government speak for themselves: at the beginning of September, the Israeli Government signed the Sharm El-Sheikh Memorandum. This presents, amongst other things, detailed timetables for the implementation of agreements which have been signed with our Palestinian neighbors, including the Wye Memorandum (next week will mark the first anniversary of its signing). The Government’s implementation to the letter of the Sharm Memorandum constitutes clear proof of our determination; we are not interested in carrying out negotiations for the sake of it but, rather, in practical steps which will end the conflict in our region.

The Government of Israel is marching on the road to peace with its eyes wide open. We are well aware of the great mission before us: the completion of the framework agreement by mid-February 2000, and the completion of the final status talks by September 2000. We are also aware of the enormous opportunities inherent in the process for us and our Palestinian partners.

Those who view the peace process in terms of one-dimensional political negotiations are mistaken. Israeli governments, since the launch of the peace process, have attached special importance to the economic dimension, in general, and, particularly, to the economic aspects of the Palestinian track. As we approach the twenty-first century, it is unthinkable that the peoples of our region will be unable to benefit from those same opportunities available to those living in Europe, Latin America, Asia and North America.

Distinguished Chairman,

The Government of Israel views the improvement of the economic situation in the Palestinian Authority as a strategic objective, and it sees the Donor States framework as a central means to accomplishing this aim. The Donor framework is a tangible expression of the readiness of the international community to mobilize, in order to bring about a definite improvement in the economic situation, having immediate positive implications for the atmosphere surrounding the peace process and for the peoples of the region themselves.

There was a purpose behind the reference of the parties to the international donor community in the Sharm El-Sheikh Memorandum. There was also a purpose behind our references to the expectations of the Israeli Government at this Conference, during the opening ceremony of the final-status talks on September 13.

In view of the great importance attached to the donor framework by all those attending this Conference, we must make a great effort to implement the financial commitments.

Israel has openly demonstrated its readiness to take calculated risks in order to advance our economic relations with the Palestinian Authority. I am also convinced that our Palestinian partners are clearly aware of the inseparable connection between the economic and security domains, as well as the fact that we cannot compromise on the security issue.

Having examined these last five years, we have come to the definite conclusion that those periods in which there was a calm security situation also saw growth in the Palestinian economy. A consistent and determined effort by the Palestinian Authority to fight terror and the terrorism infrastructure makes it easier for Israel and other parties to continue taking measures, which have been among the factors in the improvement of the economic situation in the Palestinian Authority during 1999.

Ladies and Gentlemen,

I would like briefly to point to a number of important steps which Israel has taken to improve the economic situation in the Palestinian Authority:

First, the governments of Israel have been acting on an ongoing basis with a view to increasing the number of the Palestinians working in Israel with a permit. Today, this number stands at 60,000, leading to a significant drop in unemployment in the Palestinian Authority, and to a rise in productivity there. We call upon the Palestinian Authority to work with us to reduce the number of Palestinians working in Israel without a permit.

Second, we are working to strengthen the private sector in the Palestinian Authority. In this framework, Israel is encouraging investment in the Palestinian Authority, and is making a determined effort to resolve the problem concerning the movement of people and goods, amongst other things, by easing the movement of Palestinian businessmen between Israel and the Palestinian Authority. The number of businessmen moving between these areas stands today at 31,000.

The great importance attached by Israel to the movement of goods and people is expressed also in two central projects referred to in the Sharm El-Sheikh Memorandum: Safe Passage and the Gaza Port. The ability of the two sides to reach a summing up on these two projects at the negotiating table paved the way for their implementation at the beginning of this month. These two projects should serve as an example for the two parties as to how they should conduct their affairs from now on.

Third, Israel has transferred to the Palestinian Authority, to date, tax revenues amounting to $2 billion, by dint of the Paris Agreement. This sum represents 60 per cent of the Palestinian Authority budget.

Fourth, Israel made a commitment to allot $75 million between 1993 and 1998, as assistance to the Palestinian Authority and joint projects. In addition, Israel made a commitment at the Donors Conference in Washington to allocate a further $15 million in assistance to the Palestinian Authority.

An additional issue which is of considerable importance in our economic relations with the Palestinian Authority is the industrial parks project. The unique value of this project lies in the combination of the special talents of the Israelis and Palestinians, while there is cooperation with international organizations on a commercial basis and for the benefit of the parties. The first industrial park in Karni was inaugurated in March 1999, and, today, 500 workers are employed there. I am pleased to inform you that as a result of the Wye Memorandum, the first plans have been laid for an additional industrial park in the Jenin region, with the assistance of Germany.

The Government of Israel is very interested in the involvement of Israeli investors in these industrial parks and, to this end, it has put up $50 million in risk capital for foreign trade as part of its overall contribution, in order to encourage investments.

My colleagues, the chairmen, Foreign Ministers of Norway and Japan,

In a few months time, we will all be marking the year 2000. There are no places more suitable to mark this historic occasion than Jerusalem, Bethlehem and Nazareth. We should be happy that we can welcome the new millennium after we have traveled so far in order to bring peace to the Holy Land. In the coming year, we expect to welcome millions of tourists to our country. Israel has already made intensive preparations, but we must remember that this is an enormous project, and only cooperation between Israel and its Palestinian neighbors will ensure its success.

An additional area in which we must strengthen coordination and cooperation with the Palestinian Authority is in the implementation of infrastructure projects.

Over the last 41 years, Israel has been assisting developing countries. This clearly reflects both our national experience and our humanitarian values. Within this framework, however, it is only natural that we place an emphasis on cooperation with the Palestinian Authority.

Over the last three years, we have held 25 courses on a number of subjects, on an annual basis, with the participation of 2,400 Palestinian students. Cooperation of this kind is also an important means of enhancing the mutual recognition and understanding between the two peoples.

Ladies and Gentlemen,

Israel, together with the Palestinian Authority and the Donor States, recognizes the importance of the international effort to improve the economic situation of the Palestinians. This recognition is based, first and foremost, upon our belief that it is not enough for us to rely upon official peace agreements between leaders. The peace agreements achieved by the political leaders must permeate the consciousness of the peoples, they must be able to change overall perceptions, and to create a very solid basis for peace between us and our neighbors.

Unfortunately, while direct negotiations are being carried out between the parties, a kind of diplomatic war is being launched by some of our Arab neighbors against us from every possible international forum. There are also attempts to continue the Arab boycott. This situation is damaging our efforts to gradually build confidence between the sides. I am certain that you share our belief that a "code of conduct" for negotiations will create a suitable environment for the achievement of momentum in the peace process, thus avoiding any unilateral decisions or steps which might harm the process and its outcome.

Ladies and Gentlemen, representatives of the Donor States,

Over recent years, we have all taken part in a large-scale effort intended to improve the economy of the Palestinian Authority. Israel, for its part, has done everything it can and will continue to do so, in order to enhance cooperation with the Donor States framework.

From this platform, I call upon our Palestinian partners, and representatives of the Donor States to continue strengthening the coordination between us. We will only accomplish our goals if we all speak in the same language – the language of peace. We must not repeat the mistakes of our ancestors who spoke a multitude of languages and, therefore, were unable to complete the building of the Tower of Babel.

Finally, allow me to thank my colleagues, chairmen, and foreign Ministers of Norway and Japan.

Israel is grateful to Norway for the determination and perseverance it has shown, and for the important role it has played in the historic reconciliation process in the Middle Fast.

I wish particularly to thank our Japanese hosts for their active contribution to the peace process, for hosting this important Conference and for embodying what we ourselves seek to achieve in the Middle East: peace accompanied by economic development for the benefit of all the peoples of the region. Israel views this as one of the important components of the "spirit of peace". I trust that the Palestinians and the Arab states share our perception, and that they will clarify for us their vision of the "spirit of peace" which we all long for.

Thank you very much.