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Kushner reveals economic blueprint of Trump’s ‘deal of the century’ regarding plan’s division of labour - Daily News Egypt

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Kushner reveals economic blueprint of Trump’s ‘deal of the century’ regarding plan’s division of labour

“If applied, will end all previous Arab Peace Initiatives, will also end ‘right of return,’ other related causes,” says Cairo University professor


Trump’s Middle East peace plan publicly known as the ‘deal of the century’ will include $50bn in investments in the Palestinian Territories, Egypt, Jordan, and Lebanon in its first phase, said Donald Trump’s senior advisor and son-in-law, Jared Kushner, on Saturday.

Out of the total amount, $13.38bn would be grants, $25.689bn would be subsidised loans, and $11.6bn would be private investments.

Kushner will present the plan at the conference in Bahrain on June 25 to 26. The blueprint envisions a global investment fund to lift the Palestinian and neighbouring Arab economies, and is part of broader efforts to revive the Israeli-Palestinian peace process.

“I would say that the political side and the economic side are two very robust efforts. To digest both of them at one time would be very, very hard so it was necessary to break them up, so the question is–which one do you put first? Our thought was that it was better to put the economic plan first. It is less controversial. Let us allow people to study it, and give feedback. Let us try to finalise-if we can all agree-on what that could look like in the event of a peace agreement,” said Kushner.

Several other Arab countries announced their intention to participate in the Bahrain economic conference, including Egypt, Saudi Arabia, and the United Arab Emirates (UAE), while Iraq and Lebanon announced they would not participate.

On Saturday, Palestinian Authority President Mahmoud Abbas said that the deal will not pass because it ends the Palestinian cause.

In May Abbas stressed that the ‘Deal of the Century’ can “go to hell.”

 

“In Bahrain we’ll discuss an opportunity that’s never been presented before. W/ [sic] a peace agreement, it could unlock an incredibly prosperous future for the Palestinian ppl. It’d be a shame if those who prosper under the status quo squandered the opportunity,” Trump’s Mideast envoy Jason Greenblatt tweeted.

Greenblatt had previously denied media speculations that the ‘deal of the century’ includes giving any lands of Sinai to Gaza.

“False! Please don’t believe everything you read. Surprising and sad to see how people who don’t know what’s in the plan make up and spread fake stories,” he said.

Political Science Professor at Cairo University, Tarek Fahmy, told Daily News Egypt that boycotting the conference will not be of any effect even if the official Palestinian side is refusing. He also added that there is an unofficial delegation from Palestinian businessmen who have common interests and projects with Israeli settlers.

 

Fahmy, however, said that the Manama initiative is not brand new and was introduced in other meetings. He added that considering this initiative as the first and last is not correct, as there are other steps that might be taken. Hence, Fahmy sees that the United States administration is now focusing only on the economic solution and not a political solution, as the Trump administration will be occupied with the presidential elections as of the beginning of next year.

 

 

Palestine gets the lion’s share of the plan

“The plan would invest about $50bn in the region. It would create a million jobs in the West Bank and Gaza. It would take their unemployment rate from about 30% to the single digits. It would reduce their poverty rate by half, if it’s implemented correctly. It’s a ten-year plan. It would double their GDP.  We’ve had it peer-reviewed now by about a dozen economists in a dozen countries and we’re very excited to put it forward and share it now with a lot of leading business leaders, a lot of leading investing institutions, and then also the public,” Kushner told Reuters on Saturday.

 

However, the plan was denounced by the Palestinian Finance Minister, Shukri Bishara, who said, on Sunday, that they don’t need the Bahraini meeting to build their country, what they need is peace.

“Economic revival followed by peace is unrealistic and an illusion,” Bishara said during a meeting at the Arab League headquarters in Cairo.

According to the economic part of the ‘deal of the century’ detailed in a document released by the White House, the Palestinian territories to get the lion’s share of the $50bn designated for the plan.

Out of the total amount, $27.81bn would be for the Gaza Strip and the West Bank, of which 24% would be for transportation and mobility projects ($6.562bn); 12% for governance ($3.33bn); 10% for the Palestinian tech sector ($2.625bn); 9% for power projects ($2.539bn); 8% for water projects ($2.322bn); 7% for education ($1.895bn); 15% for tourism, natural resources management, and health care (5% each); and 15% distributed between agriculture, manufacturing, home ownership, business development, quality of life, and workforce development.

The plan would stretch across a 10-year period, over the course of a period that the document claims that such investments would bring Palestinian GDP from the current $14.6bn to $16bn in the first year (9.8% GDP growth), and to reach $22.4bn by the fifth year, and $33.1bn by the end of year 10.

According to the White House document, over the decade, 1.326m jobs are to be created, and the total GDP growth would be 126.7% (year one over year 10), with an average annual GDP growth rate of 8.5%, and the unemployment to decline to 12.4%, down from the current 30.9%.

 

Integrating Gaza and the West Bank

The document highlight is a $5bn transportation network connecting Gaza to the West Bank, which could fundamentally change the Palestinian economy. Features could include an interurban rail line linking many of the major cities of Gaza and the West Bank for rapid urban transport, mass transport stations near urban centres, and connections to regional railways, such as the Jordan railway project. This connection will occur over several stages, with an interim solution planned for implementation within two years.

The plan also includes other roads and railway projects through improving and repairing the existing West Bank and Gaza roads, as well as the construction of new roads to allow for the movement of people and commerce.

Furthermore, the document cites plans to develop border crossings, which would be done through developing the essential necessary infrastructure to reduce the costs of trade and sustain economic development in the West Bank and Gaza, including upgraded scanners and new technological solutions to support rapid and secure transit of goods and people. Furthermore, there is also the expansion of roads at key crossing points, including the Allenby crossing between the West Bank and Jordan, and examining the creation of new crossing points to create additional trade capacity.

 

Ending power and water supply shortages

Power shortages have been part of everyday life of Palestinians, particularly in Gaza. The plan aims to bring the Gaza electricity crisis to a swift end—ensuring that Palestinians in Gaza receive at least 16 hours of electricity per day within a year of the project implementation.

This objective will be accomplished through investments in grid upgrades, the Gaza power plant, and new renewable energy facilities. Additionally, increasing the power supply from Egypt to Gaza by upgrading transmission lines to support a total capacity of 50MW in the first phase then 100MW in the second phase.

Furthermore, the document cites a plan to expand the Gaza power plant by constructing additional natural gas turbines with $500m investments, and constructing two gas fire power plants in Hebron and Jenin with $600m each to provide the West Bank with electricity.

In the water sector, the projects include water treatment, waste water management, and water distribution network improvements. “This project has the potential to double the amount of potable water available to Palestinians, per capita, within five years. Additional funding will support the development of new wastewater treatment facilities in the West Bank and Gaza, putting an end to the ongoing public-health risk posed by untreated wastewater. This treated water will be reused, creating vast supplies of affordable water for agricultural and industrial use.”

 

Technological and digital services

The plan includes $2.625bn for the Palestinian internet infrastructure, and providing scholarships to boost the success of Palestinian graduates in the ICT sector.

The document indicates that to upgrade Palestinian internet capabilities, this initiative would take a phased approach to lay the groundwork for the introduction of advanced spectrum services (5G) for the West Bank and Gaza, by constructing smart terminals in the West Bank and Gaza that provide high-speed Wi-Fi, device charging, access to city services, maps, and directions. These capabilities would support related economic activity in fields like software development and telecom services.

 

Private sector growth to play a major part in Trump’s plan

According to the plan, unleashing the Palestinian economic potential would be done by promoting private sector growth, especially in the agriculture, tourism, manufacturing, and natural resources sectors.

The tourism sector alone is to receive $1.45bn to be distributed between different projects. The first of these projects is the tourism lending facility rehabilitation to fully develop the Palestinian tourism industry as new investments are needed to improve accommodations and attractions close to popular tourist sites.

This project will provide hoteliers and tourism companies with access to low-interest loans through a new lending facility managed in conjunction with Palestinian banks. Up to $375m of loan capacity will be available for the five-year life of the programme, ensuring Palestinians have access to the capital required to quickly develop this sector. After five years, this facility could be extended and expanded for an additional five years. Separately, an additional $200m in grant funding will support the rehabilitation and development of potential tourism sites.

Regarding agriculture, the plan includes $400m to develop a public-private partnership to support a FinTech solution that can support farmers with financial products, such as crop insurance, micro-loans, and mobile savings accounts. Additionally, $200m will be for irrigation projects in the West Bank and Gaza to boost yields and increase the capacity of farmers to grow high-value crops, and $150m for land rehabilitation.

The housing sector is to receive $1bn, $400m of which are to create a mortgage-lending facility to support Palestinian borrowers and jump start the Palestinian mortgage market, decrease the housing affordability gap, and $600m would be to extend stage one of the programmes.

On the other hand, manufacturing projects included in the plan vary between industrial parks, trucking fleets, warehouses, and a cement factory, with a total of $875m.

Finally, $1.45bn would be for natural resources’ exploration, $1bn of which would be for the development of the Gaza Marine gas field.

The Gaza Marine gas field is estimated to hold 1.5tn cubic feet (Scf) of natural gas, and $390m would go toward oil and gas exploration and production in the West Bank and Gaza to the extent agreed by the parties on resource rights.


 

Transport, water, tech are the focus of Jordan’s projects

Concerning Jordan’s share of the $50bn deal, the document explained that its estimated share will be $7.365bn, of which $1.703bn in grants, loans of $2.9bn, and $2.763bn will be provided by the private sector.

The White House document indicated that according to the Peace to Prosperity plan, 15 projects will be implemented in Jordan over three phases, in which the first phase will cost an estimated $740m, of which $465m are in grants, $200m are in loans, and the private sector will fund projects of $75m, only in the first phase.

The plan of the White House revealed that the first phase holds the implementation of six projects on an average period for implementation of two to four years.

Furthermore, the White House document addresses the six projects in details, explaining that the projects include a new bus system that would connect the cities of Amman and Zarqa, Jordan’s two largest cities, as well as several bus stops within each city, mentioning that this project will be funded through $150m worth of grants, taking four years for implementation.

Meanwhile, the second project is the “Red-Dead”, which will provide water supply to Israel and Jordan while also slowing the declining water levels in the Dead Sea.

The document showed that the key features of the aforementioned project are envisioned to include a desalination plant on the Red Sea to provide water to the southern areas of Jordan and Israel, the sale of Israeli water to northern Jordan, an Israeli-Palestinian agreement for the provision of additional water to the West Bank and Gaza, and brine production from the Red Sea desalination plant to be combined with sea water and sent to the Dead Sea to reverse declining water levels.

“The aforementioned project will be funded through grants, worth $145m within a time frame for implementation of two years, while the second stage for this project will be completed in the second phase of projects with total grants of $400m, taking six years for implementation,” according to the White house document.

Meanwhile, the third project will support the continued development of Jordan’s solar power generation programme with total estimated investments of $150m, in which half of them will be funded through loans while the other half will be funded by the private sector, with a time frame of three years for implementation.

Furthermore, the fourth project aims to expand the existing US Overseas Private Investment Corporation (OPIC) programme, which supports small and medium-sized enterprises (SMEs) in the region, as OPIC could create an expanded guarantee facility for loans to SMEs in Jordan.

The Jordon SMEs project will be funded through loans worth $125m with a time frame for implementation of two years.

While the fifth project aims to install a broadband, fibre-optic network in Jordan to connect public schools, hospitals, and healthcare centres, businesses, and government entities in areas including, but not limited to, Irbid, Mafraq, Jerash, and Ajloun with total grants of $100m, and it will be implemented over three years.

Furthermore, a total of $70m grants will be directed to creating a National Data Centre in a time frame of two years.

Meanwhile the second phase consists of five projects with a total cost of $1.850bn, including grants of $1.200bn, in addition to loans of $325m, and another $325m will be provided by the private sector.

The second phase includes projects for developing and upgrading the airports with total investments worth $650m, funded equally between the private sector and loans, taking six years for implementation.

Meanwhile, the second phase comprises of a project to improve the Jordan river with total grants of $250m, in addition to a project that aims to build a national cyber security capability and provide technical assistance with total grants of $500m, as well as establishing a dry port in Ma’an funded through grants worth $50m.

Concerning the third phase, the White House showed that it consists of four projects, with a total cost of $4.775bn, distributed to $38m grants, in addition to loans of $2.375bn and the private sector will fund them by $2.363bn, in which every project will take a time frame for implementation of 10 years.

The third phase includes establishing a rail line connecting Amman to Aqaba, which would decrease the cost of shipments and trade from Jordan’s major population centres, and a potential additional rail extension to the Arabian Gulf, and the project is to be funded equally by loans and the private sector with a total cost of $1.825bn.

In addition to a project for upgrading  the Jordan-West Bank interconnection by building a 400kV line, with a total estimated cost of $50m, as well as a project for the creation of a resort built on a land north of Aqaba’s coast and adjacent to the Marsa Zayed project, as well as the development of Aqaba’s Corniche District including water parks, an ecological park, beaches, and hotels, with a total estimated cost of $1.400bn equally funded by loans and the private sector.

 

Blueprint sees Lebanon getting $6.325bn for intra-regional trade, railways

While in terms of Lebanon, the White House document uncovered that Lebanon’s share from the $50bn, will be $6.325bn distributed into grants of $450m, in addition to loans worth $4.625bn, as well as $1.25bn that will be provided by the private sector.

The document further explained that the first phase embodies two projects with a total cost of $325m, distributed into loans worth $125m, and grants of $200m, in which every project will take two years for implementation.

The first phase takes in a project for building Intra-regional Trade and Investments in Lebanon through supporting regional trade integration to incentivise exporters to become engaged in regional value chains to significantly reduce the cost of doing business in the region.

The cost of the aforementioned project is estimated at a total of $200m grants.

Like Jordon, OPIC could create an expanded guarantee facility for loans to SMEs in Lebanon, as the White House plan aims to expand the OPIC programme, which supports SMEs in the region, and the share of Lebanon in this project will be funded through $125m loans.

Lebanon has no projects to be implemented in the second phase of the Peace to Prosperity plan.

While the third phase includes three projects in Lebanon with total estimated investments worth $6000m, including $250m grants, in addition to $4.500 bn loans, as well as $1.250bn will be funded by the private sector.

The three projects include a project for repairing and improving Lebanese road corridors, including missing highway links primarily on the two main corridors (North-South, and East-West), which are part of the regional highway network, with total investments worth $3.300bn, funded through $2.250bn loans and the private sector with contributions worth $750m, expecting to take six years for implementation.

Meanwhile a total of $2,000bn, is directed to support the construction of a railway network within Lebanon with the potential to connect to a regional railway network, expecting to take eight years for implementation.

The above $2,000bn is distributed into grants worth $250m, in addition to loans worth $1500bn, as well as $250m will be funded by the private sector.

Meanwhile $1bn including $750m loans, and $250m from the private sector will be directed toward supporting the construction and associated logistics for the expansion of the Beirut airport and other airports, the expansion of Lebanese ports including Beirut and Tripoli, and the modernisation of border crossings, expecting to take eight years in implementing.

Commenting on the Peace to Prosperity plan, Lebanon parliament speaker, Nabih Berri, said on Sunday that Lebanon does not want investment at the expense of the Palestinian cause.

Berri added in a statement from his office, that those who think that waving billions of dollars can lure Lebanon, which is under the weight of a suffocating economic crisis, into succumbing or bartering over its principles, are mistaken.

“Lebanon’s rejection of settling Palestinian refugees, who must have the right of return, stands at the forefront of these principles,” the statement added.

 

 

‘Peace to Prosperity’ includes $9.16bn for Egypt, mainly in transport, natural gas

State-run MENA news agency said on Saturday, that an Egyptian delegation headed by a deputy finance minister will participate in a Bahrain summit. Yet, Foreign Ministry Spokesperson, Ahmed Hafez, asserted on Saturday Egypt’s keenness to achieve the aspirations for the Palestinian people, including their right to establish an independent Palestinian state on the June 4, 1967 borders with East Jerusalem as its capital, ending the Palestinian-Israeli conflict on the basis of the two-state solution, in accordance with the resolutions of international legitimacy and the Arab Peace Initiative.

Kushner explained that some of the projects would be in Egypt’s Sinai Peninsula, where investments could benefit Palestinians living in the adjacent Gaza, a crowded and impoverished coastal enclave.

According to the plan released by the White House, Egypt is to receive $9.16bn, $5bn of which will be for a new transportation infrastructure in the country to improve domestic and regional connectivity.

 

Meanwhile $2bn would be for developmental projects in Sinai, $500 for power generation projects, $500m for water infrastructure projects, $500m for roads and transport infrastructure, and $500m would be for tourism projects along the Red Sea coast.

Furthermore, $1.5bn would be provided to support Egypt’s ambition to become a regional energy trading hub, after the country achieved self-sufficiency of natural gas and started exporting Egyptian gas to international markets through the Idku, and Damietta LNG terminals liquefaction plant.

The document states that a natural gas hub in Egypt would help coordinate energy development in the eastern Mediterranean.

The eastern Mediterranean is the expanse of sea beginning off the coast of Egypt, Israel, Gaza, and Lebanon, extending northwest toward Cyprus. Various discoveries have already been made there, usually of gas but with some potential for oil as well.

Egypt holds the keys to the eastern Mediterranean’s gas future. It has the ability to proceed alone by exporting the expected gas surplus from the Zohr field via its existing exporting infrastructures, such as the two idle LNG terminals and the Arab gas pipeline, or it might decide to proceed together with Israel and Cyprus by creating a new eastern Mediterranean gas hub.

However, political analyst Fahmy sees that the Manama economic solution, if applied, will end all previous Arab peace initiatives, and will also end the ‘right of return’ and other related causes ‘like ending the occupation.’ he also said that the solution will “threaten the gains achieved by Palestinians in the last decades.”

https://cdn2.dailynewsegypt.com/2019/06/23/kushner-reveals-economic-blueprint-of-trumps-deal-of-the-century-regarding-plans-division-of-labour/
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