The Conference of Europe and Palestine
1-3 October 1998
Ramallah - Palestine

Speech of Dr. Nabil Sha 'ath
Minister of Planning and International Cooperation

Dear Colleagues,
Ladies and Gentlemen both on the table and here in the conference.

Again I salute you with all the friendly and deep rooted belief in me about the European Palestinian and the European Middle Eastern and the European Mediterranean relationships of strategic nature that tie our country with your continent.

I have considered myself a Europeanist for a very long time and this is in no way to diminish my assessment of the importance of the American relation nor certainly the importance of the Arab National Bonds that tie us with our Arab Brothers. But Europe has emerged gradually as our very important partner of troth. And I think that this is based on our needs and also our estimations that we can play an important role in your needs and in your own strategic plans, clearly explained .in your Barcelona approach, of an encompassing relationship of peace, security, political stability, economic prosperity and cultural growth and development. And I think it is this encompassing strategic long term relations that are based on your and our security needs, economic needs, futuristic cultural and educational and technological needs, particularly emerging as a result of the end of the cold war and the end of the Soviet Union as we all knew it and of the emergence of the new visions of a new world order or disorder as many people would like to think of it that needs restructuring. And we feel that you are an island of strength and security for us, a very big island, but in all our calculations, both as Palestine and as part of this region, this calculation of the relationship with Europe counts most particularly in its global strategic long term visions and not only in its tactical needs of a day to day dealing with a very difficult political process with its combatant risks of return of confrontation -and its day to day problems of trade and investments.

It is in that sense that I would also look at Palestine within the regional context. The regional context was a very important one for all those who thought of and dealt with and participated in the peace process. Obviously Palestine and the Palestine problem has a very important primacy, almost centrality, in the regional approach of all countries looking at us as a region in this new world of blocks, I mean the European Block, the American Block, the Pacific Block and the possible emerging new Russian Block. Unfortunately the Arab block has really never been able to act in this new world in a way tl1at would make it a block of the same proportions. But all visions of the peace process, including the expansion of that emphasis of the centrality of the Palestine problem, include an approach to the whole region. And .the question or a region in peace versus a region before peace basically involved Israel. I mean the region as we talked about it before peace with Israel was basically an Arab region. And Palestine participated in that Arab region also as a very central part of the political economic social and cultural aspirations of our region. When that region was expanded, it included on and off some non-- Arab participants such as Iran, Turkey and the Ethiopian South. And then we talked about the Middle East before peace that definitely excluded Israel. And therefore whatever shape we look at, an Arab Natiot1al shape or a Middle Eastern geographical shape, the difference of the pre-peace and the post peace arrangement really meant a role of Israel in that new region m which Palestine is also to play an important role despite of its almost insignificant size in the total economic calculations of that region. Somehow I think Palestine was thought to have leverage far beyond its immediate economic size and immediate political influence. And that leverage emanated partly from the centrality of the political problem of the Palestinian Israeli conflict within the overall Palestinian Arab Israeli
Conflict. But it also has to do with the way Palestinians developed both Particularly in their Diaspora and their expatriate ,status. For a while Palestinians held economic and political posts in most of the emerging independent Arab countries around them, in Jordan, in Lebanon) in the Gulf States in particular and partially in Iraq and Libya. And that presence of the Palestinian entrepreneurial expatriate produced Palestinian interest in trade, investment, even public enterprise development and political developments. Palestinians represented Saudi Arabia, Kuwait, Jordan, in the United Nations for quite a while including also Libya at a certain time and Palestinian diplomats were a major force in many of these Arab Countries as they emerged into independence. It was also the influence Palestine had directly over the Arab masses and Arab political opinion and also to some extent the business communities in the Arab world, and that really produced for Palestine a leverage in .the area that was rarely practiced by a country that has not yet emerged into full independence without any of the requisites of sovereignty at a time.

I also tl1ink that Palestine has been endowed with a particularly strong leadership that has been able to create direct personal relations to exert direct political and economic influence far beyond the reaches of Palestine, the like of which we have not seen in many similar emerging countries, but we have seen in people like Mandella, for example, and the leadership of the ANC. I think the particular influence of President Arafat and the Leadership of the PLO has been quite a plus in terms of the
Palestinian leverage in its relationship with the Arab world and also with a much wider area of influence in central Asia, in Latin America, in the -heart of Africa and the South of Africa and in the far East, particularly in the Muslim areas such as Malasia and Indonesia.

So a variety of factors, the political importance of the Palestine issue, the direct involvement of the Palestinian expatriates and the particular political influence of the Palestinian leadership over Arab masses and other populations and the direct effect of that relationship on the relations with the rest of the world, created for Palestine a particular leverage in the  region that we are talking about that really gave Palestine a particular advantage in addressing the problems of that region. Therefore the peace process between Israel and Palestine is really what created the whole interest in the four of five basic approaches to the area as a region
including Israel after the peace process. I mean the multilateral process, particularly REDWG, the US Casablanca process, and I call it that because that's what it is, the Barcelona process and a variety of other processes involved in the region with particular centrality of Palestine but also the particular centrality of Israel.

And I am going to talk about that other leverage because it is rea11y the combinations of these two leverages and the particular emphasis laid on one or the other. that have shaped a lot of the approaches made to the region and therefore the role of Palestine in that region. Because as I have explained about the particular leverage of Palestine in the area, obviously Israel had a very significant leverage on Europe, on the United States in particular as well as many countries far away. The leverage was based partially on historical relationships particularly the very important factor that characterized Jewish European and Jewish American relationships over a long time. Both factors made Israel an inheritor of an important Jewish influence in the Judea-Christian development and the Judea-Christian culture in the West and also the very important inheritant of one
of the world's most horrible crimes not only of the century but of many centuries before it and that is the holocaust and. the effect that holocaust created in terms of western approaches to Israel as the inheritor of the population that suffered from that holocaust. And the importance it stil1 has of a very important Israeli leverage on Europe as well as on the United States, is sometimes utilized particularly to protect Israel and give it an opportunity to have more advantages than it deserves in any particular situation. And sometimes have been used as a particular influence visa vi the Palestinian rights and Palestinian requisites on a global relationship with our region. Also the historical and important relations that Jewish expatriates and Jewish nationals have had in the economies of Europe and the United States are similar in a way to the Palestinian leverage on the. Arab countries but of course magnified because of the long term importance of the Jewish factor in Western civilizations and western cultures and western business development and economic development and of course the Israeli long term relationships with Europe and the United States which both influenced from within and from without are far greater of course in its impact than the influence Palestinians have had on their regional context

I wanted to say that at the outset because it is important in understanding what leverage can Europe have in this Regional Middle Eastern context in the peace process. I think there is a lot that can be done but one has to really look into what has been attempted and I don 't think any of those attempts have succeeded so far because of the centrality of the political problem. The approach to the region whether economic, security ,scientific, technological, or educational was based primarily on the inclusion of Israel as a result of the Palestinian-Israeli peace, and any development that does not take that into consideration will fail. The Palestinian Israeli political peace has to succeed if the region including Israel is to succeed in making relationships with the rest of the world.
Without that there can be absolutely no proper understanding of what made Casablanca US fail or many of the other forms fail. Because they did not anticipate nor were they able to create modalities nor were they able to cope with the political problems and the political dimensions of approaching the region with Israel rather than sans Israel in the economic social and security context of relationship with the region.

Obviously the roots of these regional relationship with Israel start with the Oslo declaration. The Oslo declaration of principles itself has an extensive annex (2) that has expanded on the possibility of Israel and Palestine acting as regional partners in this whole Middle Eastern Arab, now Israel being in, region that will emerge as a result of the peace process. By the way this has never happened as a result of the Camp David approach. There is absolutely no result of the Egyptian Israeli peace relationship on any expansion of the Israeli membership in the region. Never. And there has never been any attempt to translate the. Camp David relationship into a regional relationship of economic cooperation with Israel. This has neither taken place as a direct result of the global Madrid meeting, although the Multi laterals were created as a result of Madrid but they faced many serious problems. Syria and Lebanon never joined in the first place and it was rea1ly a crippled attempt at creating a regional approach. The first real push in that regard came as a result of the Palestinian Israeli accord, and therefore one has to look into that accord to see the beginning of the regional approach with Palestine and Israel at the center in its relationship with the rest of the
world. The Oslo Declaration was to a great extent dictated by the Israelis. It was not rea11y negotiated then, to be very honest and fair, it was a result of what 1 really would call properly the Shimon Peres vision and Shimon Peres dreams. Shimon Peres thought of the peace process really in global terms and therefore in regional tem1S. G1obalization and . regional block formation are two twins of the new world order and therefore Mr. Peres thought of the regional vision as part of his global vision for Israel. And therefore the model that was included in the Oslo version was based on that model. Certainly it had some visionary aspects and no doubt it had to include the Palestinians in the Israeli vision for that partnership in a regional context. But it was basically based on Israeli needs. Israeli needs of the 21 st century basically and particularly as result of 50 years of Arab boycott of Israel. The Israeli economy has been totally redirected from its regional context into its global context. And Shimon Peres was trying to see what aspects of regionalism Israel can benefit from in redirecting its economic relationship to the region as a result of peace and end of boycott.

Peres's visions . start basically with energy, water and land. These are the basic Israeli needs in the 21 st century . The electricity grid, the natural gas pipeline system and grid are two very important components of that vision because all of Israeli power stations have to be replaced in the next 3 to 5 years at most. And Israel doesn't think it is going to have nuclear alternatives except maybe 50 years hence. And therefore Israel needs energy either in gas form or direct electricity form in the next 35 years and these have to come from the region. And therefore a very important part of the Israeli vision included in the Oslo declaration was the energy requirements of the Israeli economy. As you know, all power companies and power stations in Israel are fueled by Cole today) most of it coming from South Africa and Australia. They are inefficient and have to be replaced with a more environmentally sane, clean :and economic and , efficient gas. Until that takes place, which is going to cost a lot of money, direct importation of electricity from the Arab electricity grid is considered


Water is another requirement for Israel and possibly it thinks of it as coming directly from Egypt, from the Nile, or indirectly from Turkey. Its first vision was to get water from Turkey via Syria and now the Turks are going to export it to Israel via Cyprus with water pipelines ~t the bottom of the Ocean going through Cyprus and then going south east towards Israe1. Mr. Demerel promised also some drops of water to Palestinian economy coming from these pipelines! ! !

Thirdly transportation grids, which are important if you are going to connect these markets somehow with the Israeli market and the global market.

Fourthly tourism projects, and Peres always really advocated that a million tourists are a much better protection for Israel than hundred thousand soldiers, because tourism brings with it peace and security .
-And finally mega projects, and as you'll see many of these mega projects also have to do with water and energy . Witness the dead med and the red med and the dead and god knows med med! !! all of these were mega projects that Peres dreamt of. They produce basically water and electricity and they also involve Peres vision of what Israel can best do in the Arab world, that is be a major contractor of big projects of mega projects in the Arab world. As you'll see it is really very difficult to see how the Israeli economy could have reoriented itself drastically to suit exports of consumer products, let's say. to the Arab world given the long process in which the Israeli economy was shaped basically around exports to Europe, the United States and lately the Far East.

Therefore you'll see that this vision is contradicted totally by Mr.Netanyaho. Mr. Netanyaho does not share that vision and does not even care. He thinks that the Israeli economy is really basically part of the European economy and the global economy and that Israel has to concentrate on what it can .do best rather than go into adventures in an Arab world that still harbors a 1ot of doubts and a lot of possibly anxieties of a political nature and also lots of economic structure and economic institutional problems that doesn't make it easy for Israel to achieve a11 what it requires. Therefore really part of what has happened in the
political peace process is il1at the political decision making authority in Israel also had alternate economic dreams and not only alternate political dreams. Whatever expansive Mr. Peres's dreams were- and however Israeli centric they were, which they had to be, they still harbored important feed back onto the politica1 process. They contributed,   favorably to Israeli attempts at the labor government's helm to produce as quickly as possible a political process. Whereas Mr. Netanyaho's economic visions coupled with his political visions and his political ideology make it equally difficult to see how Israel can become part of a regiona1 economy. And therefore why would Israel seek the kind of peace that Shimon Peres sought in the interest of Israel as Mr .Netanyaho redefines the economic interest of Israel as much as he bas redefined the political interest of Israel.

I know that the REDWG attempt was really a much more international attempt at looking at the region and projects that the rest of the world can do in the region. Truly REDWG was lead by Europe and it has a very important European influence, but certainly after a while I think Europe discovered that REDWG is a dead end. And therefore maybe that had helped Europe to go into the Barcelona process and in a way abandon a process that was not producing much results because of the political context and the effect of the partial boycott by some of the important - Arab countries involved in the process. Another reason is the 1ack of full support of the American side which went into its own process, the Casablanca, Amman, Cairo process which was finally buried in Doha Qatar. But it was rea11y a process that attempted to carry American interests in its approach to the region with a very important emphasis at giving primacy to Israel which is becoming a very important center of gravity of the whole process. Casablanca is an Israe1i-centric process. As much as it has also developed broader regional exercises such as the regional bank which never saw the light, the "MEMTT A tourist agreement which I don't know if any body has seen it, the business council and the MENA secretariat which probably produced some business for the Davos organization b\\t produced very little implementation!!! (Anyway, Davos has a European base 1 And it's a beautiful country anyway) economic visions coupled with his political visions and his political ideology make it equally difficult to see how Israel can become part of a regiona1 economy. And therefore why would Israel seek the kind of peace that Shimon Peres sought in the interest of Israel as Mr .Netanyaho redefines the economic interest of Israel as much as he bas redefined the political interest of Israel.

And then comes the Bacelona process. The Barcelona process is really a global process and it is European in its approach, strategic in its nature, comprehensive in its content, and most of all it attempted not to be Israeli-centric. But of course it is very difficult. to make any regional approach succeed without tackling that problem, so what do you do? What do you do if the political process is not moving? Can you really insulate the economic process? Can you insulate the security immigration, drug control, cultural, scientific, technology transfer? There is a lot of real good will efforts at thinking that they could be isolated. But they could not. - Witness the Ma1ta conference. Oh My God, the Malta conference really went into shambles basically because of the goodwill of a very good friend of mine. I mean two good friends of mine, Van Milro, and Miguel Moratinos who really thought that, maybe they could out of that meeting an opportunity to produce a European achievement on the political process that would galvanize the conference and give it an opportunity to address the economic and other processes. And we spent the whole period of Malta just trying to get David Levi and Yaser Arafat together in a room where they could really talk, in fact not ta1k, just pose for a photo opportunity ! So that the rest of the conference can succeed. As a result the rest of the conference was not even able to put together a resolution lU1til much later after the Malta meeting.

The issue was touched again in Palermo. Palermo was a much better meeting of course. Maybe because all of us learned a lesson as how to deal with this issue. But 1 think Palermo opened a very interesting question for Europe. We all understand, and I don't have to reiterate to you what I have probably said many many times before. Obviously a real comprehensive peace in this area would be to the advantage of . everybody. And a real comprehensive peace will have to start with a political and go over from the political to the economic to cultural, scientific, security . Nobody wants to preach the preached. Obviously this is what we would like to see happen. To bring prosperity, security, sovereignty, independence, freedom, harmony, neighborliness. All of these are values of a global approach to peace making. But the question that was raised in Malta was: what do you do if you can't achieve that political process because of the procrastination of the Israeli partner who is the occupier of Palestine. What do you do? If I would call the Casablanca process Israeli centric, I would can the Barcelona process Israeli Palestinian centric. Israel and Palestine together played a very important role in the architecture of the Barcelona process. Not
exclusively of - course. But they played a very important part. The question that was raised in Palermo: does it have to be ihat way? Couldn't we have regional projects under Palermo without Israel? Could we for example have a Palestinian) Jordanian, Egyptian Italian, Spanish projects. The answer was: of course: But really if you look at how the Palermo funds of regional nature were used, very sparsely, and I think particularly because Barcelona was looking for projects in which Israel is also a partner, not only Palestine and the rest of the Arab countries. And if we are really going to make Barcelona succeed, obviously Barcelona will have to succeed completely when there is complete peace and I really urge Europe not to abandon Barcelona because of the procrastination of Bibi   Netanyaho.

The Barcelona is an excellent social innovation and political innovation and political innovation and economic innovation and it responds to a lot of the dreams of all of this area. And it theoretically at least answers questions relating to both European interests and the Mediterranean interests including Palestine and Israel and the rest of the Arab world. But within the context of the serious problems we are facing in making political peace with Israel, ending its occupation and creating Palestinian sovereignty that can create harmonious relationship with Israel and the rest of the world, what can Barcelona do in approaching this region? And I think Barcelona will have to accept projects in which Israel is not necessarily a participating center. Israel has to stop being that in Barcelona, if Barcelona is to succeed. Without Barcelona abaJ1doning of course its goal of eventually bringing in Israel, in peace and harmony with its neighbor after ending its occupation of the territories of Palestine, Syria and Lebanon, after really i11rning from an occupier into a partner in bringing on a global peace in this area. Palestine, a very small country with very little natural resources, cannot develop without a regional context and a global context.

I understand that yesterday a lot of time was spent on the difficulties that Israel created in our path for developing a proper bilateral relationship, Israeli-Palestinian relationship within a regional and global context. Not only the Paris declaration with its customs envelope approach but the actual practice of Israel in the Paris declaration and its policy of enclosure, siege and restriction that makes it impossible for Palestine to outgrow its national boundaries and its difficulties. And not that we haven't tried, probably we are the only small country in the world today that has sought actively free trade relationships with the rest of tl1e world before it even became fully sovereign and independent in its territory. We have been able to negotiate and sign the interim association with Europe in three months and two days and we were able to sign similar agreements with the EFT A, we have been able to obtain free trade status with the United States and Canada and we were, able to sign billion agreements with new CIS countries, east European countries as well as with the Arab countries around us. We have established laws to
encourage foreign investments without any restrictions on foreign investment in its origin. And we have been able to go out to the world and demand free trade. We are probably the only third country in the world that does not see any problem in going into free trade. We don't have any of the specific problems that economists from the third world usually write as apologies for not going into free trade. And yet we have not been able to obtain it because of Israeli policy. I think that was clearly a matter
discussed with you yesterday. And therefore all the attempts at integrating ourselves in the region as partners with Israel first and then with the Arab countries and then of opening to ourselves opportunities of open trade and investment relationship with the rest of the world particularly your continent have all died on the vein, have all failed because of Israeli restrictions

And therefore -ladies and gentlemen, I would like to end without really too much pessimism. I know that Europe has counter leverages on both of us Palestine and Israel. I talked about Palestinian leverage and Israeli leverage on you. But you certainly have important leverages on both of us. And I emphasize both of us. With 70% of the world aid coming from you and with the most important economic association agreement made with you and with us being part of the Barcelona process and of our seeking you as political partners. in whatever form you may choose, you have very important leverage over us. No doubt. And we accept that leverage. We accept that we have to behave both in continuing our march for peace, in continuing our democratization and openness and transparency in our society , in moving properly and with -sanity in the environment issue, in moving properly in respect of technological agreements and copy rights and so on. We have no problem in all of those and we understand that your leverage points a direction for our society that is fueled by private enterprise and directed by the market economy and lead by the vision) initiative and strategies of our entrepreneurs with the help of our public enterprise and government.

We understand that you ought to continue to use your leverage to push us in this direction but you also have leverage on Israel. And I know this was raised yesterday. And I in no way look at Europe as just a spanking rod for the bottoms of Bibi Netanyaho in order to get him across and I know there are limitations as for how much Europe can utilize this spanking rod. But please avoid the two simplifications, neither are you omnipotent in this area which 1 understand, and there are severe limitations upon what you can do as leverage against Israel particularly from our American friends. But also you are not, without leverage, you should not resign yourself to the supremacy and centrality of the American presence in our area. This region looks to- you. Obviously America is a fact of life that cannot be forgotten or avoided, nor is the Arab world an-d Palestine pushing you towards a European. American confrontation because you won't do it except on your own terms and not for our benefit or our advantage. But we are asking you to employ whatever leverage you have with Israel to push Israel in the very same direction I indicate you ought to be pushing us. To push Israel towards the peace process and to end its occupation of our territory, to push Israel in the direction of allowing free trade for it and for us and for you in our region. for pushing Israel into environmental sanity and to nuclear sanity , and to protection and proper role for the private enterprise and for respect for copy rights and so on. Push Israel exactly in the-same direction you're pushing us and you have trade leverage that you can use.

Do it and do it for the sake of Palestine, for the sake of Israel, for the sake of this region but also for the sake of Europe because I see no better life for you and us than a real peace in this region producing real stability and a lot of protection from security threats, a11 of them, terrorism, drugs, etc. and a real chance of moral, cultural and spiritual upsurge. We want to think that maybe the year 2000 in Bethlehem ought to be a symbol of that but there is much more substance than symbol in what I'm talking about. In Europe's relationship with this area, with the centrality of the Palestinian Israeli conflict, Europe and all of us have a lot to gain by pushing the process forward and using .every leverage we've got to make it succeed.

Thank you very much.