The billions upon billions Trump has promised to the Palestinians, Jordan and Egypt if they just sign the ‘deal of the century’ is positively jaw-dropping. The three are supposed to get at least $50 billion over a decade. Who’s supposed to pay? Who’s expected to invest these sums? The plan doesn’t say, just hopes that those who have already donated, mainly European nations, will continue to do so.
The American administration will not be part of this generous journey: At most it will encourage its European allies to open their pockets. It is true that the plan focuses on developing the Palestinian economy, building new power lines, paving roads, creating an advanced public transport system, and infrastructure for technological advancement, education, and what not.
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The neighbors – Jordan and Egypt and surprisingly Lebanon as well – will be allotted decent portions of this bonanza. For instance, the plan promises $500 million, half as a loan and half as a gift, to encourage new businesses along the Suez Canal. Besides the source of the money being unclear, the plan “forgets” to mention that the Suez expansion project has already been acknowledged as a stupendous commercial failure, despite Egyptian President Sissi raising billions of dollars for the project. Not many businesses opened and the ones that did are losing money.
Meanwhile, Egypt continues to pursue “national” projects such as building the new administrative capital, but these aren’t sure to augment economic growth. Another $500 million is earmarked for expanding and upgrading roads between Cairo and the Sinai Peninsula and another half-billion is designated for developing water sources in the Sinai, while massive sums are cited for developing tourism in Egypt. These are lovely and necessary promises, but the Sinai is still a war zone, at least its north. Foreign investors have shunned the region for years, though not the south, which draws tourists. Egypt has vowed any number of times to invest in the Sinai in order to create sources of livelihood for the Bedouins as alternatives to collaborating with terrorists, but very little has materialized.
On paper, Egypt should get more than $9 billion, while Jordan is slated to receive about $7.5 billion. The figures cited in the plan are exact to the dollar. For instance, the exact amount Jordan is supposed to receive is $7.365 billion. Some of it will be received in five years, but the bulk of it will be distributed over ten years. The largest chunk of the aid to Jordan, about $1.8 billion, is slated for building a rail track connecting Amman and Aqaba. Another $1.4 billion is slated for developing a tourism zone in Aqaba, featuring ecological and water parks, beaches and hotels, which should also boost regional tourism and support the tourism industries in the West Bank and Gaza.
It is an interesting vision, half of which relies on private-sector investments. But for Jordan’s private sector to be able to put together investments of such scale, we should first check the economic feasibility of the projects versus the pressures from the tourism entities in Israel, who will hardly hold their peace as tourism drifts to the Hashemite kingdom.
The most fascinating element lies in the aid for Lebanon, which amounts to over $6 billion. Economic cooperation between the West Bank, Gaza, Jordan and Egypt relies on the assumption that Egypt and Jordan will want economic cooperation with Israel and the Palestinians because of peace treaties signed between them. Lebanon is a whole other story.
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The plan talks of developing ports in Beirut and Tripoli, building road and rail networks, and increasing the partnership of American investment agencies in small and medium businesses. But Lebanon has a gargantuan debt of about $90 billion, its banking system is collapsing and it is deeply short of foreign currency. It would also have to change its political structure – specifically expelling Hezbollah from political partnership in government and parliament. It is doubtful whether any American government agency could accompany or lend money to a government in which Hezbollah has the final word on its investment. Moreover, developing Lebanon’s economy depends directly on the political situation in Syria, via which Lebanon exports most of its goods.
One could take Trump’s plan more seriously if it at least mentioned Syria or suggested ways to end the civil war there, which has now entered its ninth year.
Obviously, according to the plan, the entire economic vision is subject to Israel’s security considerations. It is hard to see how the Palestinians – even if they sign a peace agreement with Israel – will be exempt from restrictions on trade and tight supervision of every commercial movement with Lebanon or Jordan, let alone trade between the West Bank and Gaza.
These are just a few examples of the landmines along the road to the regional economic cooperation to which the Trump plan aspires. We may also be skeptical about the size of the bait. $50 billion over ten years, to be divided between Palestine, Jordan, Egypt and Lebanon, with half to come from local sources means at best, $5 billion a year. It’s hard to define all this goodness as the ‘deal of the century.’