Bahrain hosts Peace and Prosperity conference

IMF chief Christine Lagarde said on June 26 that major economic growth was possible in the Palestinian territories if all sides showed urgency, as she took part in a US-led conference boycotted by the Palestinian leadership.

The International Monetary Fund has been warning of severe deterioration in the Palestinian economy, with tax revenue blocked in a dispute with Israel which has also imposed a crippling blockade on the Gaza Strip for more than a decade.

“If there is an economic plan, if there is urgency, it’s a question of making sure that the momentum is sustained,” said Lagarde.

The IMF chief attended a conference in Bahrain to discuss the economic aspects of a United States plan for Israeli-Palestinian peace, which has already been rejected by the Palestinians as it fails to address key political issues.

Lagarde said for the US plan to work “it will require all the goodwill in the world on the part of all parties – private sector, public sector, international organisations and the parties on the ground and their neighbours.”

Citing examples of post-conflict countries, Lagarde said that private investors needed progress in several sectors including strengthening the central bank, better managing public finance and mobilising domestic revenue.

“If anti-corruption is really one of the imperatives of the authorities – as it was in Rwanda, for instance – then things can really take off,” she said.

The plan presented by White House advisor Jared Kushner calls for $50bn of investment in the Palestinian territories and its neighbours within a decade.

The proposals for infrastructure, tourism, education and more aim to create one million Palestinian jobs.

Gross domestic product in the Gaza Strip declined by 8% last year, while there was only minor growth in the West Bank.

Kushner, opening the conference on June 25, called the plan the “Opportunity of the Century” — and said the Palestinians needed to accept it before a deal can be reached on political solutions.

The Palestinian Authority has rejected the conference, saying that the US and Israel are trying to dangle money to impose their ideas on a political settlement.

This edited article first appeared inArabian Business.