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Israel International Relations:
Partnerships in Development - 1998


Israel IR: Table of Contents | Trade Agreements | Humanitarian Relief


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The Economic Conference in Qatar is the fourth link in a chain of regional economic conferences that have been convened in Casablanca, Amman and Cairo. These economic conferences play a vital role in creating an intricate tapestry of economic ties, business links, cooperation and collaboration and provide fertile ground for the generation of regional and global partnerships and economic activities.

Looking back on the four years preceding this year's conference, one can describe the process of economic cooperation as it has unfolded, as one of coalescence and crystallization. As the peace process continues, economic interests between the parties gradually converge. Vague aspirations and hopes become tangible projects, which in turn materialize as joint ventures. While in the past we spoke of dreams, today we talk about location, budgets and rates of return.

This book summarizes this process as reflected in the planning activities that have taken place over the past years. Some of these activities comprise general planning, most have already found expression in preliminary feasibility studies for specific projects, and some are already under various stages of implementation. Two types of initiatives are highlighted in this volume:

  • multilateral initiatives involving Israel and at least one other regional party. These include hardware and software elements, primarily infrastructure development and technology transfer between Israel and its neighbors;

  • infrastructure development in Israel that are designed to allow Israel to play its role along side its neighbors in helping the Middle East reestablish itself as a as a major hub for global trade, commerce and production.

The multi-lateral initiatives represent the combined efforts of various regional and international parties involved in the peace process. They underscore the benefits of regional and international partnerships:

  • Projects for the development of the Jordan Rift Valley are the product of tri-lateral cooperation and collaboration between Israel, Jordan and the United States. The JRV initiative culminated in the formulation of a Master Plan for integrated development financed by Italy, supervised by the World Bank and prepared by the Harza JRV Group.

  • Development planning for the Northern Gulf of Aqaba involves Israel, Jordan and Egypt through an Israeli-Jordanian bilateral committee and the TEAM-Area project, for which the European Union is acting as facilitator. Comprehensive collaborative planning of the Gulf of Aqaba focuses on strengthening infrastructure links, coordinating environmental protection, realizing economies of scale and promoting private sector investment.

  • Trilateral cooperation between Israel, Egypt and the Palestinian Authority has been launched through the Southeast Mediterranean (SEMED) initiative with financial and technical support from the European Union. The development area encompasses Israel's southern coastal strip, the PA area in Gaza and the North Sinai coast in Egypt. The central objective of the SEMED initiative is to focus investment on specific near-term projects that will enhance the area's attractiveness to private investors and advance economic integration between the parties, with an emphasis on placed on developing capacity in the PA.

Since the dawn of time, the MENA region has served as a center of commerce and as a bridge between various parts of the globe. Since initiation of the peace process, investment in infrastructure throughout the Middle East engenders the promise of reclaiming this pivotal position. Roads, rail, sea and air ports have received priority treatment in budgetary allocations in the past few years. Border crossings have been opened, regulatory barriers are being lifted and new constellations of economic ties are now being formed.

It is within this light that major initiatives designed to improve infrastructure in Israel are presented. Some of these projects, such as the improvement of Israel's ports and airports and regional road linkages, can be directly linked to regional developments. One of the primary objectives of these projects is to enable Israel to contribute in improving the logistic capacity of the region as a whole. Other projects, while more inward looking, are indirectly related to regional trends, as they aim at promoting mobility and enhancing opportunities for establishing economic enterprises throughout the entire country.

While the process of economic cooperation is gradual, significant steps in key projects have already been made. Cooperation takes many forms and no singular model of collaboration applies to all development initiatives. Examples of projects in various stages of planning and implementation are summarized below. These examples incorporate a wide array of sectoral activity, including transportation and logistics, industry, tourism, environmental protection, water, energy and telecommunications.

Border crossings:

Two new border crossings were opened at the northern and southern ends of the Jordan Rift Valley and border and facilities at an existing crossing have been greatly improved. Despite a relatively short history of operations, plans are already underway to upgrade facilities at the northern Sheikh Hussein/Jordan River crossing to accommodate increasing volumes of traffic, and to relocate the Arava/Wadi Araba crossing to a point adjacent to the new Peace Airport that will serve Aqaba and Eilat. The Israeli-Egyptian crossing at Taba houses two new terminals on both sides. An additional border crossing at Ein Natifim is being proposed to reduce the load at the Taba crossing and to better serve planned logistic facilities in the northern Gulf of Aqaba. The crossing point at Rafah handles both passenger and cargo traffic and is being used by approximately 350,000 people and vehicles annually.

Aqaba/Eilat Peace Airport:

The governments of Israel and Jordan have agreed to develop a project to expand the Aqaba International Airport into a joint regional international airport capable of accommodating the total traffic demand for the southern part of both Jordan and Israel. The airport will be administered by a joint Airport Entity that will be headquartered in Jordan. Israel and Jordan have decided to launch a pilot project in which the Aqaba International Airport will be used for commercial international flights bound for and departing from the Eilat Airport.

Joint Water Projects in the JRV:

A pipeline from Beit Zera to the King Abdullah Canal, designed to allocate water from Israeli sources to Jordan, is operational and is supplying water to Jordan as per the Peace Treaty and a detailed agreement between the two countries. The construction of a storage/diversion dam downstream of Adassiya is being implemented with the assistance of the European Union. This dam will facilitate conveyance of water to the King Abdullah Canal and Pipeline and increase water resources available to Jordan.

The Jordan Valley Industrial Free Zone:

This project is a joint venture between representatives of the private sector in Israel and Jordan to build an industrial park near the Jordan River/Sheikh Hussein border crossing. The Jordanian government has already approved the allocation of land for the purpose of establishing the industrial park and free trade zone. Discussions are underway between Israel, Jordan and the United States to recognize the Park as a Qualified Industrial Zone for the purpose of free trade with the United States.

The Gaza Industrial Estate:

The Palestine Development & Investment Company (PADICO) is developing an industrial estate (the Gaza Industrial Estate or GIE) at the Karni crossing, the main commercial transfer point with Israel. The Estate is designed to provide full infrastructure and support services. In order to facilitate cargo transport over the crossing, Israel has agreed to authorize the Israel Airports Authority, a civilian body, to administer the crossing point. Within this framework, Israel has undertaken the construction of a new cargo terminal at the Karni crossing. It is estimated that this facility wibe operational by the spring of 1998. Transfer of management of the crossing terminal to civilian authorities is designed to encourage economic activity between Israel and the PA and to facilitate access to international ports of entry. Along with the transfer of management, new crossing procedures will be instituted, designed to ensure that Palestinian goods get to port and market efficiently.

Tourism development in the Gulf of Aqaba and the Dead Sea:

The peace process has accelerated tourism development throughout the Middle East. In certain areas this has resulted in extensive planning for new tourism development. The Jordanian Aqaba Regional Authority has prepared a master plan for tourism development in the Aqaba region. An additional 2,000 hotel rooms are planned for Aqaba Town; 11 hotels and two tourist villages for Ras Al Yamaniya; a hotel, holiday home complex, golf resort and amusement park are planned for Qabous Village. The ARA has signed contracts with private developers for the various hotel projects. In the Eilat- Eilot region, plans for development include increasing lodging capacity and creating new tourist and sports facilities north of Eilat. These plans are in various stages of implementation. Development of tourism facilities in Taba focuses on three major resorts and towns in the border area. All three parties are formulating and enacting environmental protection to enable sustainable tourism development.

A Tourism Project Master Plan for the Dead Sea has been adopted by the Jordanian Jordan Valley Authority, which provides for the development of a total of approximately 25,000 bed units in Suweimeh, Zara and el Mazara. The planned Suweimeh site includes the development of motels and hotels of various standards, recreation and park areas and campsites, restaurants, sport activities, a health center and supporting infrastructure. In Israel, hotel capacity at Ein Bokek, Hamei Zohar and Ein Gedi is being increased. The construction of hotels and vacation villages is currently at various stages of preparation by private sector developers, including major international hotel chains.

Protection of the Red Sea Marine Environment:

The Gulf of Aqaba Environmental Action Plan for integrated coastal zone management has entered the implementation stage in Jordan and is in advanced planning stages in Israel and Egypt. Financing for this programme is being provided by the World Bank and the European Union. In addition, Israel and Jordan are implementing a project for coordinated management and monitoring of a Binational Marine Peace Park, financed by USAID. As part of multi-lateral activities, an emergency response network to deal with oil spills in the Gulf of Aqaba is being implemented. It includes the construction of facilities in Aqaba, and Nuweiba and expansion of facilities in Eilat and is being financed by the Japanese government, the European Union and Israel. Israel is completing its part of the project and Jordan is in the process of procuring equipment and setting up facilities in Aqaba.

Interconnection between Jordanian and Israeli telecommunications networks:

Microwave radio relay connections between Tel Aviv-Amman and Eilat-Aqaba have been completed and direct dialing between the two countries is now possible. A feasibility study regarding the deployment of high capacity optical fiber systems along the JRV has been completed by Booz-Allen & Hamilton of the United States. One project investigated in the study would provide a fiber optic link between Tel Aviv and Amman The study indicates that this project is feasible under all conditions and could attract inter-regional as well as regional traffic.

Middle East and North African Bank for Economic Development:

Establishment of the Middle East and North Africa Bank for Economic Cooperation was announced at the Amman Economic Summit in 1995 currently being set up in Cairo. The Bank will focus on mobilizing financial and other resources to support projects that have regional character, stimulate the private sector and entrepreneurial initiative, and further economic growth and sustainable development. Many Prospective members have signed the Charter of the Bank and most are in advanced stages of ratification procedures.

Regional Tourism Organization - MEMTTA:

The establishment of the Middle East Mediterranean Travel and Tourism Association (MEMTTA) was announced at the Amman Economic Summit. This organization is a multi-lateral effort involving Egypt, the Palestinian Authority, Jordan and Israel as core parties, as well as other countries in the Middle East and North Africa. The Charter was signed at the Amman Summit by eight parties: the four core parties, Turkey, Cyprus, Morocco and Tunisia. In 1997 Malta joined as well. The member parties are in the process of ratifying the MEMTTA charter. Permanent headquarters of the organization are located in Tunis.

Middle East Desalination Research Center:

The Middle East Desalination Research Center, which was established in Oman in December 1996, coordinates and sponsors basic and applied research in the area of desalination technology. The United States, Israel, Oman, Japan and Korea are financing this project which is the result of the Multilateral Working Group on Water. The Center objectives include: discovering, developing and improving methods of desalination through basic and applied research; initiating training programs to develop technical and scientific skills; promote electronic networking to improve dissemination of technical information; and establishing regional cooperation for use of water desalination and related technologies. The first call for research projects was recently issued.

The world is rapidly entering into a new economic era governed by vast changes in global economics and commerce. Barriers to the free transfer of goods, people, knowledge, and capital are gradually disappearing, making way for new paradigms of trade and production. New economic centers are being created and MENA faces the welcome challenge of shaping its future in this evolving global economy. The extension of partnerships both within the region and beyond, constitutes the key to meeting this formidable challenge.


Sources: Israeli Ministry of Foreign Affairs

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