[Congressional Record Volume 143, Number 32 (Thursday, March 13, 1997)]
[Extensions of Remarks]
[Pages E479-E480]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           MIDDLE EAST PEACE DEPENDS ON ECONOMIC DEVELOPMENT

                                 ______
                                 

                          HON. JAMES P. MORAN

                              of virginia

                    in the house of representatives

                        Thursday, March 13, 1997

  Mr. MORAN. Mr. Speaker, I rise to express my support for more 
projects like the new Marriott Hotel to be built on the beachfront in 
Gaza. I offer the recent essay by my constituent, Mr. Ralph Nurnberger, 
from the Christian Science Monitor, as an excellent recognition of the 
need for more targeted economic aid to the West Bank and Gaza. As Mr. 
Nurnberger states, ``* * * the real test of the peace process is how it 
affects the daily lives of Israelis and Palestinians. If substantive 
and visible improvements do not result, no international agreements can 
succeed.'' He is absolutely right. Only the development of a strong 
economic infrastructure will progress and peace succeed.

           [From the Christian Science Monitor, Mar. 6, 1997]

 Not a Heartbreak Hotel--Gaza Project Shows Way to Reverse Palestinian 
                                Despair

                         (By Ralph Nurnberger)

       The day before he left for his official visit to the United 
     States, Yasser Arafat presided over the groundbreaking 
     ceremony for a Marriott Hotel to be built on the beachfront 
     in Gaza.
       This project says, symbolically, that the Middle East peace 
     process might, finally, produce tangible benefits for the 
     people in the area, especially through direct involvement of 
     the private sector. The construction and later operation of 
     this hotel will provide employment for hundreds of 
     Palestinians. It will contain a modern commercial center to 
     enable international visitors and Palestinians to conduct 
     business as it is done elsewhere in the world. The project 
     will include a self-contained telecommunications center for 
     international calls, faxes, and e-mail as well as excess 
     telephone capacity for the local market.
       This project will be the first major American private 
     sector involvement in Gaza. The total investment will be 
     approximately six times more than all other American 
     investments in Gaza--combined!
       While diplomatic achievements are essential, the real test 
     of the peace process is how it affects the daily lives of 
     Israelis and Palestinians. If substantive and visible 
     improvements do not result, no international agreements can 
     succeed. For the majority of Israelis, the key element is 
     security. Israelis must feel safe riding buses, shopping in 
     malls, and sending their children to schools. If random acts 
     of violence occur, they must be assured that the Palestinian 
     Authority will work with Israeli officials to find and 
     prosecute the terrorists.


                     peace dividend: lower incomes

       Although more Israelis have been killed through terror 
     attacks since the Sept. 13, 1993, signing than in any 
     comparable period, it appears that the Palestinians finally 
     understand their responsibility to work with Israelis to 
     enhance security concerns. The test for most Palestinians is 
     whether the peace accords will result in an improved quality 
     of life. Developing a thriving economy that provides new 
     employment opportunities will not only minimize hatreds and 
     tensions, but will also bring about the promise of a new 
     life.
       Economic divergence exacerbates political and religious 
     tensions. Since the first Rabin-Arafat signing, Israeli per 
     capita income has increased from $13,800 to over $15,000, 
     while Palestinian incomes have dropped by a third to under 
     $1,200.
       Delays and reallocations of internationally pledged 
     contributions, the reluctance of foreign investors to 
     establish projects in Gaza and the West Bank, border 
     closures, the slow pace of diplomatic negotiations, and 
     difficulties encountered in setting up a viable Palestinian 
     economy have contributed to growing frustration. Public 
     infrastructure and services, including education, health 
     care, sanitation, water, waste water disposal, and 
     electricity continue to be inadequate. Despite a minor 
     building boom, a housing shortage remains.
       While the Netanyahu government has eased some limits on 
     Palestinians seeking employment in Israel, the numbers able 
     to cross the borders are significantly below the 120,000 able 
     to find daily work in Israel in 1992.
       Rather than growing to absorb these workers, the 
     Palestinian economy has declined over the past two years. 
     Thus, workers have fewer opportunities to find employment 
     within Palestinian areas. The unemployment rate in Gaza, 
     always high, is now estimated at approximately 50 percent, 
     with the rate in the West Bank estimated at 30 percent. 
     Unemployment is highest among young, single men--the most 
     likely recruits for terror-oriented groups.


                 big aid pledges, little follow-through

       The US hosted an international meeting on Oct. 1, 1993, at 
     which $2.4 billion in assistance to the West Bank and Gaza 
     was pledged.

[[Page E480]]

     Most of these funds have not been delivered or have been 
     diverted from long-term projects to emergency programs and 
     costs of running the Palestinian Authority.
       The United States committed $500 million, of which $75 
     million annually for five years is managed by the Agency for 
     International Development (AID). The other $125 million was 
     to come from the Overseas Private Investment Corporation 
     (OPIC) to assist American investors through a combination of 
     loans, loan guarantees, and political risk insurance.
       AID has assisted a number of worthwhile projects, including 
     $12 million for construction of six housing units with 192 
     apartments in Gaza called Al Karam Towers. AID is also 
     helping to improve uses of scarce water resources and 
     assisting private sector economic growth through technical 
     assistance, training, loans to local firms, and establishment 
     of industrial parks. But AID funds have been diverted from 
     long-term projects to help in establishing Palestinian self-
     rule. For example, AID committed $2 million to support local 
     elections in the West Bank and Gaza, and to assist 
     Palestinians in promoting more responsible and accountable 
     governance.
       AID has minimized help for the agricultural sector, the one 
     area where Palestinians could immediately develop profitable 
     exports, especially under a new Free Trade Agreement with the 
     US. Allocating additional funds to farm exports would be cost 
     efficient.
       OPIC made a major effort to seek private sector projects to 
     assist or insure. But most private investors have avoided 
     Gaza, so OPIC funds committed to date have been modest.
       Mr. Arafat would be wise to stress the solving of such 
     economic problems as a prime way to reduce tensions, improve 
     the quality of life, and enhance opportunities for peace. He 
     should build on momentum from the hotel project and stress 
     the need for private sector involvement in the Palestinian 
     economy.

                          ____________________