Why wait for peace?

Berl BernhardAspen, CO Colorado

President Bush recently called for a regional peace conference this fall to be led by Secretary of State Condoleezza Rice that is to include Israel, the Palestinian Authority and neighboring Arab states with the hope of making progress on intractable issues such as borders, refugees, settlements and Jerusalem – all of which require complex negotiations and political will to resolve. But it was another announcement the president made that same day which has the potential to make an immediate difference for this tormented region and its prospects for peace.The president said that he has “authorized the Overseas Private Investment Corporation (OPIC) to join a program that will help generate $228 million in lending to Palestinian business.” The program he referenced is an unprecedented public-private partnership involving the Aspen Institute’s Middle East Investment Initiative (MEII), OPIC and the Palestinian Investment Fund (PIF).This partnership was formed to address a critical issue: access to credit for Palestinian businesses. While many Palestinian businesses would like to expand, they can’t obtain loans because of high collateral requirements (often as high as 130 percent to 200 percent of the loan amount) – a major impediment to economic growth. By creating a loan guarantee program to reduce the need for excessive collateralization, MEII and its partners will help generate $228 million in lending to small- and medium-sized Palestinian businesses. This project is unique – it involves private and government donors in the U.S., Europe, (in particular Norway), and the Arab world working together with OPIC and the PIF to substantially improve the Palestinians’ standard of living, create sustainable jobs and ultimately help to enhance security and stability.This type of initiative is precisely what King Abdullah II of Jordan recently challenged Middle East business and government leaders to develop in preparation for “the day after peace,” when the region will face critical issues such as water management, infrastructure improvement, educational reform, information technology, empowerment of women, and, crucially, jobs for the 200 million young people younger than the age of 24. But why wait for peace, especially when economic development may in fact be a catalyst – or at least create a favorable environment – for a fair and just resolution to the Israeli-Palestinian crisis?To Western ears, the words “the Middle East” spark searing images of children and young adults throwing rocks; tanks moving through crumbling refugee camps; horrific terrorist attacks creating fear and encouraging reprisal; crude rockets falling on families; errant missiles devastating lives and property. It is the Israeli-Palestinian conflict in particular that we equate with an unyielding, trans-generational hatred, so explosive that with the right spark, it just might engulf the entire region in a fiery apocalypse.This view is not entirely inaccurate, but it is incomplete. Despite the persistent cycle of violence, daily life goes on in the West Bank and Gaza – businesses operate, families struggle to survive and parents continue to hope for a better future for their children. The World Bank estimates that actual per capita GDP in the area is almost 40 percent lower than it was in 1999, and it is believed that nearly half of the Palestinian young people in their 20s and 30s would like to leave the area altogether, leading to a potential brain drain that would impede Palestinian progress for a generation. Yet despite this grim economic situation, Palestinian small- and medium-sized businesses have survived, and in some cases grown; Palestinian literacy rates continue to be among the highest in the region; according to a recent UNESCO report, “Despite often difficult circumstances, Palestinians are one of the most highly educated groups in the Middle East.”This glimmer of hope in Palestinian daily life is a real opportunity. Over the next decade, MEII will be working directly with the Palestinian business community through our partner on the ground, CHF International, which has successfully managed similar projects around the world and will focus on providing technical assistance to borrowers and lenders, ensuring the program’s utilization and preventing impropriety. This is neither charity nor a foreign-imposed solution. It will be implemented by working collaboratively with the local business community. The Palestinians are full partners in this effort, and as such will help create the jobs and growth needed to reinforce any enduring peace in the region.For almost 60 years, the Aspen Institute, a nonprofit and nonideological organization, has encouraged the study of the human condition in the light of great ideas – not as an end in itself, but as the basis for useful action. As we developed MEII over the past two years, we spoke to many development experts, businesses, banks and political leaders in the U.S., EU, Israel, the West Bank and Gaza. One Palestinian woman, Lana Abu-Hijleh, CHF International’s West Bank and Gaza country director, wrote the following to me:”We don’t only worry about the spreading humanitarian crisis, but also the short- and long-term implications on us and everyone around us when the nation’s youth, business community, and intellectuals lose hope in the future. That is why we know that reaffirmation by the international community, organizations and concerned individuals to support economic development initiatives in Palestine will have substantial positive impact on every beneficiary businessperson, worker and their families.”People who have nothing have nothing to lose. While we all pray for the “day after peace,” we don’t need to wait for an agreement between Israel and the Palestinians to take steps in a positive direction. We should advance the possibility for peace however we can – even if that means one business, one job and one family at a time.Berl Bernhard is chairman of the Middle East Investment Initiative, a trustee and past-chairman of the Aspen Institute, and a partner in the law firm DLA Piper.


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