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$9 billion for Egypt in return for deal of the century

June 24, 2019 at 10:40 am

US President Donald Trump meets Egyptian President Abdel Fattah el-Sisi (L) at the White House in Washington, United States on 3 April 2017. [Presidency of Egypt / Handout – Anadolu Agency]

According to documents released by the White House, the economic aspect of Donald Trump’s peace plan between Palestine and Israel includes granting $9 billion to Egypt, half of which is in the form of soft loans.

The documents revealed that $50 billion will be dedicated to the economic part of the deal of the century, which will be invested in the revival of the Palestinian territories, as well as Lebanon, Jordan and Egypt.

The US President’s advisor and son-in-law Jared Kushner will announce the details of the first phase of the peace plan during the workshop on “Peace for Prosperity” in Manama, Bahrain, on 25 and 26 June.

According to the documents, the funds received by Egypt will be invested during three stages over 10 years, as follows:

  • $5 billion to be invested in modernising transport infrastructure and logistics in Egypt.
  • $1.5 billion to be invested in supporting Egypt’s efforts to become a regional natural gas hub.
  • $2 billion to be dedicated to the Sinai Development Project ($500 million for power generation projects, water infrastructure, transport infrastructure and tourism projects).
  • An additional $125 million to be directed to the Overseas Private Investment Corporation (OPIC), which will direct this fund to small and medium-sized enterprises in Egypt.
  • $42 million to repair and modernise electricity transmission lines from Egypt to the Gaza Strip.
  • The commitment to discuss ways to enhance trade deals between Egypt, Israel, the Gaza Strip and the West Bank through Qualifying Industrial Zones in Egypt within the QIZ Agreement.

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The rest of the $50 billion

According to the documents, the West Bank and Gaza Strip will receive about $28 billion, which will be invested in improving transport infrastructure, electricity networks, water supply infrastructure, education, housing, and agriculture.

$5 billion will be spent on transport infrastructure linking the Gaza Strip and the West Bank and another $1 billion on the development of the Palestinian tourism sector.

Trump's peace conference in Bahrain

Trump’s peace conference in Bahrain where the US will reveal the deal of the century – Cartoon [Sabaaneh/MiddleEastMonitor]

The remaining part of the $50 billion will be divided between Jordan, which will receive $7.4 billion, and Lebanon, which will be granted $6.3 billion. The totality of funds will be raised through an investment fund managed by a Multilateral Development Bank.

Where will these funds come from?

According to the documents, this amount is divided into $13.4 billion as grants, $25.7 billion as subsidised loans, and private capital in those projects will be $11.6 billion.

However, there are serious doubts as to whether this amount can be collected or not.

“There are deep doubts about the willingness of potential donor governments to make contributions at any time as long as the thorny political differences that are at the heart of the decades-long Israeli-Palestinian conflict have not been resolved,” Reuters mentioned in a report.

The news agency quoted experts as saying: “Most foreign investors will prefer to stay away not only because of security concerns and fears of corruption, but also because of the obstacles the Palestinian economy is facing due to the Israeli occupation of the West Bank, which hampers the movement of people, goods, and services.”

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The cost for Egypt

In his interview with Reuters, Kushner described the economic aspect of the plan as “less controversial,” raising more questions about the formula for the political solution Trump and his associates are seeking.

Trump’s envoy to the Middle East, Jason Greenblatt, has repeatedly denied that the United States asked Egypt to give up land in Sinai to create a sovereign Palestinian entity expanding to parts of Rafah and Arish.

For its part, Egypt announced its participation in the Manama conference this week with a delegation headed by the Deputy Minister of Finance, Foreign Ministry Spokesman Ahmed Hafiz told Middle East News Agency (MENA).

Hafez stressed that the Egyptian participation aims to “follow up the ideas that will be presented during the workshop and evaluate the compatibility of the contained theses with the Palestinian National Authority’s vision of the ways of granting legitimate rights of the Palestinian people through a political framework and in accordance with the Palestinian and Arab determinants and constants, and the related UN decisions.”

The deal of the century is a peace plan prepared by the Trump administration and is said to be forcing Palestinians to make unfair concessions in favour of Israel, including on the status of occupied East Jerusalem and the refugees’ right of return.