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Remarks by Dr. Tatsuo Arima,
Special Envoy of the Government of Japan,
Session: "Providing Hope for the Palestinian Economy",
World Economic Forum on the Middle East
On May 21, 2006

As we discuss how best to provide hope for the Palestinian economy, we recognize anew how essential it is to reinvigorate the peace-process, eliminating the scenes and images of violence. Violence dims any hope for economic dynamism. Along with the relevant UN Security Council resolutions, the Madrid and the Oslo accords, there stands the Arab Initiative as adopted by the Arab Summit in Beirut in March 2002 followed by the Road Map as agreed to by the former Prime Minister Sharon and the then Prime Minister Abbas. True, the Road Map seems to be in a precarious state. But there is no other alternative to the two-state solution therein envisaged, if a just, comprehensive and lasting peace is to be achieved in the Middle East.

Given the political reality in either Palestine or in Israel that a significant majority supports the peace-process, it is incumbent upon their political leaders to resurrect their joint pursuit of peace. We look forward to the early resumption of the direct dialogue between President Abbas and Prime Minister Olmert. And it is our sincere hope that the new Palestinian Authority under Hamas will support the President's commitment to peace. It is the deeply felt expectation of the Japanese that the new Palestinian Authority, recognizing its democratically endowed responsibility for governance, will follow a path of peaceful co-existence and co-prosperity with Israel.

Let me also state here that the government of Japan strongly hopes that the government of Israel will refrain from taking measures that would prejudice what should be agreed to in the final status negotiations. Japan would also like to encourage Israel to transfer where it is due the tax revenues it has withheld, to alleviate the Palestinians' predicament. The government of Japan was encouraged by Vice Prime Minister Livni's recent statement that the Israeli government might consider the possibility of defreezing the tax revenue fund for humanitarian purposes. Such a move would be conducive to enhancing the confidence between the Israelis and the Palestinians, an essential ingredient for promoting the peace process.

Since 1993 Japan has contributed 840 million US dollars to the Palestinians, bilaterally second only to the United States, assuming from the outset that the solution to achieve a peace would be eventually sought in the creation of a viable Palestinian state, and also from the outset desiring that we might be able to help the Palestinians, a gifted people, make a true effective economic take-off once peace comes.

Let me be specific with recent examples. January last year soon after President Abbas was elected, the then Foreign Minister Machimura called on him and expressed our readiness to provide 60 million US dollars to help the Palestinians. In March we disbursed it: 30 million dollars to help the PA budget through the World Bank and 30 million dollars through UNDP and UNRWA for such projects as the rehabilitation of the sewage networks and other municipal infrastructure in Beit Hanoun and Rafah, the restoration of the destroyed agrarian sector in northern Gaza, paving the roads connecting rural communities, construction of schools or their expansion, improving the water supply networks in some rural areas. Altogether the projects, each lasting five to ten months, created job opportunities for about 2,600 Palestinians a day.

Last May, we invited President Abbas to visit Japan. On that occasion, Prime Minister Koizumi offered 100 million additional dollars to help the President deal with the post unilateral withdrawal problems in Gaza and in parts of the West Bank. We have disbursed nearly 75% of it, again through international organizations, for various projects. They are all on-going and include rehabilitation of the Salah Addin Road in Gaza, construction of a waste water treatment plant in Khan Yunis, rebuilding the refugees' shelters in Gaza, expanding the water supply system in the northern West Bank, building a court house in Jenin, constructing the President's office building in Ramallah, and technical and other support to strengthen the management capacities of the office of the President. Earlier, Japan helped the restoration of the Gaza airport. In addition to these projects, last March Japan disbursed 6 million dollars for emergency food supply for the poor and the refugees through the WFP and the UNRWA.

Another example would be that in 2003 and 2004, my government with the intent to promote the peace-process hosted non-official meetings titled "Conference for Confidence-building between the Palestinians and the Israelis", inviting several distinguished people from each side, all with rich experiences in peace negotiations. The conference in 2003 is said to have helped pave the way to the so-called Geneva Initiative.

Above all, we are carrying out wide-ranging human resources development programs mostly managed by the well-known JICA training a large number of Palestinians in Palestine, Japan and sometimes in Egypt or in Jordan in the areas of public, fiscal and welfare administration, business management and others. Such joint efforts empower the Palestinian people to achieve a self-sustaining economy.

The government of Japan will continue to extend humanitarian assistance to the Palestinians. As for other new assistance, we will examine each case weighing carefully whether the Palestinian Authority make positive efforts for advancing the peace process through peaceful means.

Lasting peace can only be achieved by the efforts of the two parties. Once a peace is finally realized in this region, so richly endowed with the historical legacies and with the gifted peoples, there will be a flood of people, capital and services coming in in search of economic opportunities and of sharing in the sights and sounds of their great past. The Japanese will continue to do our utmost to support every effort by the Israelis and the Palestinians to achieve co-existence and co-prosperity.