U.S.-Palestinian Partnership

(3:45 p.m. EST)

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UNDER SECRETARY FORE: Good afternoon. We have just arrived from a very productive meeting with Secretary Rice on the U.S.-Palestinian Partnership. Joining me today are three distinguished Americans who co-chair this initiative: Walter Isaacson, President of the Aspen Institute who has agreed to coordinate this initiative's plans; Ziad Asali, President of the American Task Force on Palestine; and Jean Case, the CEO of the Case Foundation. The Secretary joins me in thanking them for being here to discuss this very important initiative. Our other co-chairs are Lester Crown, Chairman of the Henry Crown Company; Sandy Weill, chairman emeritus of Citigroup who were unable to be with us here today.

The U.S.-Palestinian Partnership was launched on December 3^rd in 2007. It brings together the private sector, civic leaders, the United States Government and the Palestinian Authority to create educational and economic opportunities for Palestinian youth, furthering progress toward peace between Israelis and Palestinians. As one component of the initiative, the United States plans to refurbish three youth centers in Nablus, in Hebron and in Ramallah. To support this effort, USAID will work in tandem with the Ministry of Youth and Sports to build upon existing youth training and job programs. USAID is also working to support the partnership's efforts to promote economic growth and new employment. These efforts will have a direct and meaningful impact on the lives of Palestinians. This initiative is the latest in a series of successful collaborations between the United States and the private sector. In fact, in 2001, USAID has cultivated more than 600 public-private partnerships worldwide with more than 1,700 partners to leverage an additional $5.8 billion of U.S. -- from its investment of $2.1 billion in public funds.

During a recent trip to Jerusalem and the West Bank, members of this initiative identified specific needs the partnership should address. They have discussed with the Secretary ways that the United States Government, the Aspen Institute, the co-chairs of this initiative and other partners can leverage our resources to create opportunities for Palestinians. In the coming months, we look forward to working with our dedicated co-chairs, with U.S. and Palestinian business communities and others. And I encourage private sector partners to become involved and to be supportive of this very important initiative.

Before we move to questions, let me turn to Walter Isaacson to make a few remarks. Walter.

MR. ISAACSON: Thank you very much. One thing we heard from the Secretary is she is deeply committed to this. This was her idea at the very beginning. She talked to the President about it. Karen Hughes was involved. But she had met with both the economic leaders in the Palestinian territories and with Minister Tahani Abu Daqqa, who you know is the Minister of Youth in the territories, and they decided that as part of a peace process, as part of the Annapolis process, having economic and educational opportunities was key.

We all just went on over there. We met with Minister Abu Daqqa and many other ministers, as well as the Israeli leaders. We went to Bethlehem and Ramallah and Hebron and saw the various things we were going to do. We picked some of the sites where we’re going to be working with USAID, also with OPIC, where, as some of you know, we launched earlier on a small business loan fund which gives loans of $25,000 to $200,000 to Palestinian businesses in the West Bank. Those loans are now going out the door. We have six Palestinian banks as our partner. They’re going out the door to things like taxicab companies, garment manufacturers. Bill Bernhardt, who is a chairman of that initiative and was chairman of the Aspen Institute, is in Ramallah today with Rob Mosbacher, I think of OPIC and others, doing that.

So we’ve got a lot underway, and of course, with George Laudato when we traveled to the region, we saw so much about what USAID is doing in that region. So first of all, we’ll have the youth centers. We also are working on trying to get a call center developed or maybe two call centers, one in East Jerusalem and one in Ramallah. That’s a nice, easy business you can set up quite quickly. We’re hoping, too, to find ways to help with housing, maybe a mortgage guarantee fund or something like that. We’re also working very closely with Tony Blair’s group because Tony Blair is trying to work out these industrial zones. Our job would be to try to make sure American companies come into those industrial zones.

I think that it’s officially was announced at Ziad’s meeting about an hour ago – and at the moment, Salam Fayyad is upstairs meeting with the Secretary – will tell her – but you all might as well know it before she does, no, she doesn’t – that it’ll be the May 8^th and 9^th, we’re going to have our business development conference. So we’re going to try to urge -- and maybe you can, you know, describe it so that American business leaders will say, "I should go to Bethlehem. I should be part of this business development conference."

There are many other things we’re kicking around, but let me bring Jean and Ziad here. Jean has been awesome in getting the technology companies to step up to the plate and do a lot and Ziad on the trip to the region. Everybody sort of tugs their forelock in the presence of Ziad Asali so – and the Palestinians. So it’s been great working with them. And really, we should – you know, this is an informal briefing. We can talk about whatever we’re doing and anything that would be helpful to you.

Yes.

QUESTION: I wonder if you’re getting any –

MR. ISAACSON: We have to say goodbye to wonderful Henrietta who has the excuse of saying the White House is calling. (Laughter.)

UNDER SECRETARY FORE: Yes, but I leave in my place George Laudato from USAID who can answer any questions from USAID.

MR. ISAACSON: And we also have Rob Danin here, so if ask any policy questions, we don’t go there. (Laughter.)

QUESTION: As you talk to American businesses, potential American partners for this, are you getting any pushback or consternation about the whole Gaza situation that, you know, this is not getting better, the Egyptian border crossing, as any sort of reason that they might be holding back on participating?

MR. ISAACSON: No, I never heard that.

MODERATOR: You want to go to the microphone.

MR. ISAACSON: Yeah, we have had some pushback on some, you know, trying to figure out movement and access issues in the West Bank, but nobody’s ever mentioned the Gaza situation, just to be honest with you.

QUESTION: Are you getting much interest – I mean just candidly – you know, I – some of us were at the thing in December and are you really getting any nibbles or any significant interest on the part of American companies in terms of investing there?

MS. CASE: Sure. I’ll speak to that. The first sector that we’re really looking at is the ITC – ICT sector. And I must tell you, there’s been great –

MR. ISAACSON: Tell people what that is because it took me about a week to figure it out.

MS. CASE: Information communication technologies. You know, tech companies is what we would call them in the U.S. And we’ve seen a great appetite by the companies we’ve talked to since we returned from our trip, a strong willingness to play a role and help out here, so quite the opposite.

QUESTION: Like who?

MS. CASE: We’re not really talking about names. We expect an announcement to be forthcoming later in the spring as we put these partnerships together, but the good news is we’re working actively with them now in trying to put together some great commitments.

MR. ISAACSON: But it’s not like we’re dodging that. They’re names you would have heard of, and we have announcements coming out.

MS. CASE: Oh, yeah. I would say the usual players. If you look who the players are in the Middle East and have been at the table, they’re the same players that we’re talking to now. But we want to provide them the courtesy of finalizing commitments before they’re announced.

QUESTION: Maybe Ziad, maybe you can take this one. It’s obviously very focused on the West Bank and those areas because that’s where the U.S. is working with the Palestinians. But I mean, do you think that there’s a problem with eliminating Gaza wholesale from this equation? I mean, obviously not only the humanitarian situation in Gaza is terrible, but it’s kind of like going to be a two-tiered system now where you’re going to see a lot of development in the West Bank and a lot of people feel that Gaza might be left behind.

MR. ASALI: You know, I don’t think we can get into the politics of this. It’s not at all our mandate. What is our mandate is to get businesses set up and to have interest on the ground and globally in developing the Palestinian economy and institutions. And what is available to us at this point in time is what we can do in the West Bank and East Jerusalem.

QUESTION: Do you hope to expand the program to Gaza if the political situation –

MR. ASALI: No question about it. Yeah. You know, this is – you know, this is the goal or objective. I don’t think there’s any question about it that in the long run, you want to expand it everywhere. But as a practical matter, this is what is happening now.

QUESTION: Can you tell us how many youth you expect to impact with your centers and how much money you’re talking about in dollar figures?

MR. ISAACSON: George? I don’t know the numbers. I mean, here’s – let me just give the overview. USAID is going to build the centers and we’re going to get all sorts of amazing NGOs and corporations to staff them, put in information technology, put in tech learning centers, put in basketball, you know, learning centers, put in English language learning centers. And then we’re not – and then George -- wherever he is -- is sort of in charge of the budget of how much will be spent by USAID. We’ve been to some of the buildings. Some of the buildings are already there, so we’re talking about things that are going to happen real fast, where they can be expanded or done. George, you want to –

MR. LAUDATO: We’ve set aside $7 million at this point to launch this effort with the youth centers. The outreach, we don’t – we haven’t done any analysis on how many youth that will be, but – I mean, these are – these will be large, multipurpose youth centers with lots of different types of programming and programming at a lot of different levels, starting from small children up to the 25 to 35 age bracket.

So we’re expecting the outreach to be fairly substantial. We visited these three youth centers about three or four weeks ago and we stopped and took the time to talk to some of the young men and women and it was really powerful, particularly in Hebron, to hear these young people speak about the impact of isolation on their lives. And we’re hoping that these youth centers will be a way of at least, in part, moving from a sense of complete isolation to being able to reach out and hopefully, with the use of modern technology, to bring some of these young people in communication with their counterparts in other parts of the world.

MR. ISAACSON: And also one of their satellites.

MS. CASE: Yeah. In fact, I was going to say, just for points of clarity, it’s Hebron, Ramallah, and Nablus where the youth centers will be located with the idea that those would become the hub centers that would then be connected to about 45 other centers around the region.

MR. ASALI: And there was up front – I’m sorry.

QUESTION: Yes, you spoke about this conference in May – on May 8 and 9 in Bethlehem. Is it -- what kind of conference will it be and is it where you want to announce all your investments? Who will be there?

MR. ASALI: This is really a Palestinian conference. This is a conference that’s set up by Salam Fayyad government and he’s already appointed a committee, a ministerial committee and has a chairman already designated. And their purpose, of course, is to showcase Palestinian capabilities in – you know, at many levels and to attract business investment and interest and institution-building at all levels. This will involve, fundamentally, a public and private partnership and there is, of course, a Palestinian and Arab dimension to it, a European dimension, and with our involvement, which we have been coordinating very well with the Salam Fayyad group, there will be a substantive American involvement through the partnership. Clearly, there is not enough time to have – you know, things done in two months to get the results that you want to achieve, but there is an interest and I think this is a beginning of a serious annual series of such conferences that will take place in Palestine.

MR. ISAACSON: Let me just add – yeah, our role in this is to try to help U.S. businesses go there and convince them to and others. But also, Booz Allen Hamilton and Don Pressley, who is vice president there and then Ralph Shrader, who is the CEO, have been very – you know, helpful. They were at that meeting in December that you were at. And they’ve been talking – because one of the conference – I mean, you know, when I moved to the Aspen Institute from that side of the podium when I used to be in the press – I was in the conference business; it’s a complicated thing, running conferences. So I think Booz Allen is going to offer some help on the logistics of how you get name tags printed and agendas set up.

And so we just want to be helpful to Dr. Fayyad in all sorts of ways as he tries to do this conference. And one of the things I learned – I was involved with Louisiana recovery and one of the most important things we did was actually have conferences where people got to go to New Orleans and they were big business leaders and they said, “Oh, the city’s actually back. It’s – you know, we can invest in it again.” I think a lot of American business leaders have not realized that there’s a nice conference hotel in Bethlehem. You can – you know, it’s a beautiful place. You can actually do business in Bethlehem or Hebron or Ramallah or Jenin.

And so I think getting people over to this conference – that enough is going to be pretty cool too, to just say, “Hey, come see what the Palestinian territories are like.”

QUESTION: I have two, just, specific questions. You spoke about the small business loans and do you have a – forgive me if I missed it, but what is the total amount of money that you’ve dedicated for –

MR. ISAACSON: Yeah, this is an – this is – first of all, let’s give OPIC credit.

QUESTION: (Inaudible) from, sorry.

MR. ISAACSON: Yeah, Rob Mosbacher in OPIC and his predecessors at OPIC came to the Aspen Institute. We’ve been working on this for two or three years; sort of pre-dates this thing, but it fed into this thing. There is a loan guarantee fund set up with a lot of OPIC guarantees. The reason I say it that way is it’s not just money, but it’s guaranteed loans. So what we do – and to answer the question more directly, it’s approximately $250 million in loan guarantees, to give you the number. I’m not trying to skirt the number.

But what we do is we go to the banks that are our partners and we say, “We will guarantee 70 percent of the loan, so if you make a loan, you’re going to have 30 percent (inaudible) yourselves, so” – you know, people are careful about how they make loans. But it allows loans to be made in more dangerous situations. So there could be up to $300 million and while everybody from the Government of Norway to Lester Crown personally, with his own checkbook – the Portland Trust deserves a lot of credit because they’ve been helping on these things as well. But we’re all working together to make that guaranteed loan fund. Does that answer it?

Yeah.

QUESTION: Yeah, but the other question was actually for Ms. Case. Does – is there actually the bandwidth in a place like Ramallah to be able to set up a call center or is providing the bandwidth something that you need to get from some of these companies that are going to participate?

MS. CASE: Pardon the pun on bandwidth, right? So I think the exact location of the call centers has not been determined. Ramallah is being looked at and those are some of the issues that are being looked at as we determine where that will be.

QUESTION: I ask just because – you know, I’ve been to Ramallah, I’ve been to –

MS. CASE: Right.

QUESTION: -- Bethlehem and I’m just – I have no idea, genuinely, whether there is that kind of bandwidth.

MR. ISAACSON: But Paltel’s got an – you know, do you think – you’ve been there, so you know, but Paltel has got a lot going on. They have some good (inaudible) there, right?

MS. CASE: They do and part of what we hope to bring, of course, is, you know, increased access and bandwidth to the region overall through some of these technology companies and what they’ll bring in.

QUESTION: And lastly, I presume, the call centers would be geared toward the Arabic-speaking market; correct?

MS. CASE: That’s correct, absolutely.

QUESTION: Thank you.

QUESTION: You said that you –

MR. ASALI: Initially and the first – the first call center that’s being considered actually is in East Jerusalem.

QUESTION: You said that you met with Israeli officials and I was wondering a couple of things. First of all, are you confident that you’re going to get the kind of freedom of movement that you’re going to need to bring so many Americans over – it’s – you know, there is a lot of restriction of movement – into the Palestinian territories? And two, Israel in itself is really very advanced in its technology and I was wondering if there was a willingness on the part of Israel to help facilitate some of the things particularly that Jean was mentioning.

MR. ISAACSON: To start with the second question, yes, very much so. People you know, like Yossi Vardi, have been, hand-in-glove, working with us at all of our meetings because the Israeli IT sector wants this to happen. We had a wonderful dinner of the Israeli and Palestinian IT sector at the American Colony Hotel when we were over there a couple of weeks ago. I’ve never seen – I mean, it was like being, with all due respect, at an AOL conference in the old days, you know, I mean, everybody handing out business cards, doing business plans together. And Idon Ofer, who is a big Israeli banker, Bank Leumi, has been a co-chairman of our Aspen group for the past few years, so he’s very involved . Yeah, Yadin Kaufmann has been.

So yes, we are trying to get the Israeli and Palestinian IT sector who already – you know, they kind of do -- there’s a Israeli-Palestinian chamber of commerce and they’re kicking that up a bit. So they’ve been making a – on the Israeli officials, particularly met with Minister Barak. Ehud Barak, I am convinced, really wants business development and economic opportunities for youth to happen in the West Bank for obvious reasons. I mean, it’s in Israel’s interest, it’s in his interest and whatever. So he has been extraordinarily helpful in finding people on his staff and appointing people. I am convinced that he wants to make this happen and he will be working hard to make sure that the issues like this are resolved.

MR. ASALI: The problem of access and movement is still central, of course, with the development of the Palestinian economy, our area of concern here, and it is a work in progress and I think it is a tough one and I think it has many implications and it is hard to visualize serious development of the Palestinian economy without making some serious movement on that issue.

MS. CASE: Yeah, I just – I wanted to underscore one of the things that Walter said. What was exciting to see when we were on the ground is that there’s also a real renewed effort between the Israelis and the Palestinians in terms of the tech sector that we can now come in and sort of dovetail into, which is very exciting. And it’s also, I think, very comforting to U.S. tech leaders who know the Israeli tech leaders to have them by our side as we look at Palestinian opportunities.

MR. ISAACSON: What Jean is saying is everybody knows Yossi and they like him. (Laughter.)

MS. CASE: Pretty much.

MR. ISAACSON: The one other thing I want to say – I forgot to even mention that. But on that point, we’re also trying to put together or at least help people put together a venture fund and there’d be a Palestinian-Israeli joint collaboration on a technology venture fund. And people there like Yadin Kaufmann in Israel and I’m blinking on his name, the CEO of Paltel –

MR. ASALI: Malik Jaber.

MR. ISAACSON: Yeah. Those two are working on finding how you could do a joint technology venture fund and, you know, we’re just trying to facilitate that.

MR. ASALI: Well, I do want to mention something that – you know, something over context of all these things. I think we have all been much happier, had we had this conference telling you this is what’s been done, this is what was done in February or done in March and that – et cetera, et cetera. But what we are telling you are things that have not yet happened. And with the (inaudible) skepticism of people over there that’s been promised so many times in the past and not much has been delivered, it is definitely the sense of this group, the serious sense of this group that this is all a very serious attempt at doing tangible things that will be delivered. And but just leaving it at that, I think this is a – it’s our promises, understood to be what they are, but they have a much higher degree of seriousness attached to them now than what we know had what happened in the past.

MR. ISAACSON: And George will say, we have the money for the youth center, so that’s really moving fast. We’ve found them. And secondly, we do have the loan fund already working and going – let me get – this woman here has been very patient with me.

QUESTION: (Laughter.) Thanks. Two questions. One is just can you tell us how you’re working together – what is your relationship with what Tony Blair is doing and the second is that I remember and I know this is Gaza, it’s not the West Bank, but I remember the generator that was bombed by the Israelis. It was an OPIC-funded generator. And I’m just wondering if you’ve got any promises that those, you know, whatever is being built is not going to be destroyed.

MR. ISAACSON: On Tony – I’ll do Tony Blair first. I was – we presented what we’re working on in Davos, Mr. Blair, myself, Dr. Fayyad and Henrietta, the four of us, were part of a panel and working group there. We met with Mr. Blair’s team, as I said, when we were in the region. Before we got launched, I mean, last November, I guess it was October-November when the Secretary first called me up, I said, will you call Mr. Blair. We don’t want any – and so I went and saw him in New York when he was there for the UNGA. And we’re working incredibly close. And you know, he’s a very you know, wonderfully exciting guy to work with. He is focusing on issues like where do you put industrial zones, how do you get movement and access and we are focused on things like, once you get those zones, what companies are going to come in and build things there. So it’s not as if we’re crossing wires or overlapping, but we’re working extremely closely with them.

I will remind you, speaking of things in Gaza, or whatever, it was our group, before we appointed the U.S.-Palestinian partnership at the Aspen-Middle East Group, which includes Ziad and many other people, that also did the greenhouse transfers in Gaza. So we do know the problems that can arise and I – no, we don’t have any guarantees that there’s going to be a land of milk and honey with peace breaking out, but we’re going to try real hard to make sure that if we build a call center, everybody’s in favor of it. And I certainly think that Minister Barak is very much in favor of this call center. He’s very much in favor of these youth centers. He knows exactly where they are. We’re working with them. It is not in anybody’s interest to have those things be – have some safety issues.

MR. GALLEGOS: I think we have time for one more after –

MR. ASALI: Okay. I just want to say one thing about this. What really – you know, everybody remembers whether – the incident that you mentioned and I think it is a – we need to talk about systems, system improvements that, no matter what happens, there will be a certain degree of protection. So the political risk insurance that’s being considered is close to being finalized and that will cover that sort of a contingency.

Another system that’s being considered is the mortgage guarantees, the mortgage facilities that are being considered very seriously. And we’re talking about a housing project that could extend over a period of ten years that could be worth some $2 billion. And that is something that we have not started working on, but it – I would not be surprised if part of it start unfolding in the year 2008. But that cannot work if we do not have mortgage facilities, which is right.

So I think the question of the political ambiguity, of course, is there. The question of what we can do to protect our projects against these contingencies is very valid and I think there are solutions to it.

MR. ISAACSON: Pam just pushed her little Blackberry to get the lights to go on and off, warning us we have to --

MR. GALLEGOS: Anne. I think we have one more with Anne.

QUESTION: A follow-up on that; not so much concern about whether something might get blown up, but do you have a concern that American investment or overseas investment would dry up if the peace process doesn’t really start getting going here? I mean, Ziad said just a little – few – a little while ago, it’s hard.

MR. ISAACSON: (Inaudible.) We don’t want to get – I hate to say it, but there are other people that answer peace process questions. Obviously, peace is better for the economy than war is.

QUESTION: This is hinged to that, right?

MR. ASALI: Yeah, right. Ask us about computers and –

MR. ISAACSON: You know, we’re going to keep our nose, then, in – because we also think it works both ways. You get more economic development you lay the groundwork for peace. If there’s more economic opportunity, if there are more stakeholders for peace, if there are more middle class businesses, if there are more people running, you know, shops and taxicab companies and garment things and there’s more employment, that helps the peace process and obviously, it works both ways. Of course the peace process helps the economic development process. I mean --

QUESTION: Yeah, but, if I might, just to play devil’s advocate, I mean, you launched this right after Annapolis. There was a lot of hope, a lot of enthusiasm, a lot of expectations and that creates a climate for investment. And so –

MR. ISAACSON: Yes, right.

QUESTION: And so how do you sustain that if you don’t see the same level of enthusiasm and creating a safe environment for American investment?

MR. ISAACSON: Peace will create a better environment for investment. How do I sustain it? I’m not the Secretary of State. I mean, there are a lot of people who have got to sustain it. I will say, to get more specific, when we were meeting with the President in the Roosevelt Room and talking about it, he pushed the idea of a risk insurance, which he said – and then I found it slightly interesting; Bill Clinton had called him to push for it because – part of Clinton Global Initiative to have risk insurance, meaning if there is uncertainty or unrest, you get some insurance. So we’re working to put together that risk insurance. But yeah, I mean, you know the answer to the question. So –

QUESTION: All right. Thank you all.

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