By Sanjay Suri
GLENEAGLES, Scotland, Jul 8 2005 (IPS)

A three-billion-dollar offer to rebuild the Palestinian economy marked the strongest part of a G8 push at its summit to bring the Middle East around to its way.

British Prime Minister Tony Blair announced “a substantial package of help for the Palestinian Authority, amounting to up to three billion dollars in the years to come, so that two states, Israel and Palestine, two peoples and two religions can live side by side in peace.”

The money will be used to support plans by James Wolfensohn, special envoy for disengagement for the Quartet (the United States, the United Nations, Russia and the European Union) which has set out on a mediation role in the Middle East, to support regeneration and Palestinian governance reform, the G8 said in a statement Friday.

The decision by the Group of Eight most powerful industrialised nations is in line with demands by influential business houses trading in the Middle East.

“This is very good news for the Palestinian Authority, because there is a huge amount of infrastructure work to be done there,” James Lawday, director-general of the Middle East Association, a trade association of companies doing business in the Middle East, told IPS.

The Association had held a symposium two days before the summit where delegates gathered to send a message to the G8 that “trade can help restore stability in the region,” said Lawday. This relatively small amount of money can help build roads and both port and airport facilities, he added.

The source and the timeline for use of the money remained unclear. “We support Mr. Wolfensohn’s intention to stimulate a global financial contribution of up to three billion dollars over the coming years,” the G8 leaders said. They said they are “mobilising practical support for Mr Wolfensohn’s efforts.”

The Arab world was clear cause for concern at the G8 summit, not surprising given the volatility of the Middle East and Iraq, and uncertainty and unrest across much of the rest of it. The G8 leaders see democratisation and liberalisation as the path out of its difficulties – and the difficulties it is seen to pose for the West.

“National elections in Afghanistan, Iraq, Lebanon and in the Palestinian Authority demonstrate the values placed on the principles and institutions of democracy and that democracy is fully compatible with national and cultural identities,” the leaders said in a separate statement on “a common future with the broader Middle East and North Africa region.”

But there was enough in their recommendations for the Arab world that would be cause for concern among many Arabs. “Improving governance, strengthening the rule of law, combating corruption, promoting equality for women and liberalising the media are viewed by many in the region as critical to national development,” they said.

“We encourage further progress in these areas in their own right, but also to stimulate economic growth and opportunity, including the private investment needed to help create the millions of jobs required by the region’s youth.” For its future, for its prosperity, the G8 wants the Arab world to go in the direction it is pointing.

The G8 leaders praised Jordan, Morocco and Bahrain for working through the Forum for the Future held in Rabat, Morocco in December last year to build a partnership with the G8. None of these countries are working democracies.

The leaders of the G8 countries – United States, Canada, France, Germany, Italy, Japan, Russia and Britain – emphasised the business portion of the partnership:

“The establishment of the Network of Funds, the creation of a Private Enterprise Partnership for the Middle East and North America, the launch of an Investment Task Force, the establishment of a regional microfinance best practices centre and the continuing development of regional entrepreneurship centres all give practical meaning to our partnership.”

The G8 leaders issued a third statement on Iraq reiterating recent agreements and leaving differences out. The leaders joined in calling for more and generous debt relief for Iraq. And they called for countries who had pledged aid to actually pay up. “We encourage countries to disburse unreleased portions of their pledges from the 2003 Madrid Conference and to provide further contributions to Iraq’s reconstruction.”

But the leaders had also a warning for some countries. “We call on the states of the region to cooperate with Iraq to prevent cross-border transit and support for terrorists, and to improve regional security.”

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