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U.S. Department of State

Great Seal Secretary of State Madeleine K. Albright
With Palestinian Authority Chairman Yasser Arafat, Norwegian Foreign Minister Knut Vollebaek, Austrian Vice Chancellor and Minister of Foreign Affairs (EU Presidency) Wolfgang Schuessel, European Commission Vice President Manuel Marin, World Bank President James Wolfensohn, and Envoy of the Government of Japan Ambassador Tatsuo Arima
Press Conference at Conclusion of Conference to Support Middle East Peace and Development
Dean Acheson Auditorium, U.S. Department of State
Washington, DC, November 30, 1998
As released by the Office of the Spokesman
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SECRETARY ALBRIGHT: Good afternoon. Representatives of 50 nations and organizations participated in today's conference to support Middle East peace and development.

Six of the participants are here with me, and they will be glad to answer your questions. They are Chairman Arafat, who, with courage and foresight, is leading his people toward a more secure and prosperous future; Norwegian Foreign Minister Vollebaek, whose country's dedication to peace has been a source of encouragement and inspiration to us all; Austrian Foreign Minister Schuessel, representing the European Union; and European Commission Vice President Marin. The EU's leadership and generosity in supporting the Palestinian people are critical to the success of the peace process.

World Bank President Wolfensohn, whose vision and vigor have made the World Bank an important donor and an even more important coordinator of assistance to the Palestinians; and Japanese Special Envoy, Ambassador Arima, whose government has made major sustained contributions to our efforts.

I want to begin by congratulating them and everyone who attended. We do not have exact pledges, but it appears that delegations pledged more than $3 billion today - well above the $2.3 million pledged at the 1993 donor conference. That by itself is a substantial achievement. It is also the beginning of a process which will turn words on paper into contracts, construction sites and commerce in the West Bank and Gaza and throughout the Middle East. The dividends of peace will become increasingly tangible and enduring in the lives of the Palestinian people.

The United States, for its part, intends to significantly increase support for the Palestinians. We are seeking support of Congress to obtain $400 million in additional economic assistance in coming years - above our annual request, which will reach $100 million next year. We will thus achieve a significant increase over our 1993 pledge, making the United States the single largest country donor.

Pledges from the 1993 donors conference have already built schools and hospitals and trained judges, journalists and health workers. They have touched the lives of almost every resident of the West Bank and Gaza. Today participants also endorsed a list of development priorities for our continuing efforts, and we will work to upgrade basic infrastructure such as sewage and power and transportation.

We will promote human development by improving education and healthcare. We will foster private sector investment. And we will support the foundations of a tourism industry by helping prepare for the hundreds of thousands of tourists expected to visit Bethlehem at the turn of the millennium.

Our pledges today are evidence of the international community's firm commitment to help the Palestinian people build lives that are better, freer and safer, and to do our part in laying the foundations for a secure and prosperous Middle East.

There is a great deal of work - hard work - ahead on both the political and economic fronts, but the international community stands united today in sending Palestinians and all the people of the region a message of hope and concrete support.

If you will allow me to sit down, I will answer your questions.

QUESTION: Madame Secretary, would you kindly address what is delicately called transparency? And perhaps someone from the European Union can address it too, if there's a different approach so far as how the United States keeps tabs on what happens to assistance and the Europeans do likewise, but possibly in some different way. Oh, also, while you're at it, if I might, we're concerned about how - I'm interested in how the assistance gets to the project. In other words, a lot of people sympathetic to assistance would like it to go directly to a project instead of going through several hands. I don't know if I'm explaining it well; but could you explain the system a little bit? Thank you.

SECRETARY ALBRIGHT: Barry, I'll let the Europeans answer for themselves. But let me just say that our way of doing this is that we give to projects. It's done through AID; every dollar is accounted for, and it is completely transparent. So our process is one in which priorities are decided within the government and then accounted for through an AID system directly to projects and not to the Palestinian Authority.

FOREIGN MINISTER WOLFGANG SCHUESSEL: There are different types of assistance. One is the Authority itself, the Palestinian Authority. You know that the European Union spends a lot of money, too, for the Palestinian Authority to make it work. We are by far, as a group of countries, by far the largest donor. We pledged today to keep the momentum during the last five years' period. All in all, we spent more than $2 billion. I think this will be possible for the next five years.

There are specific project financings. The European Union is very much interested in housing, in water resources, in infrastructure. Don't forget that the airport was constructed with a lot of money coming from the European Union. The seaport -- we are the only donor for the seaport. We are now working together with our Palestinian friends for some important infrastructure projects like railroads, et cetera.

Maybe the Commission wants to say something?

FOREIGN MINISTER MANUEL MARIN: No.

FOREIGN MINISTER SCHUESSEL: Okay. But there is no difference, the approach between us - the Americans and Europe, no.

QUESTION: Mr. Schuessel, could you elaborate on the role of the European Union - (inaudible) - in the future, what's coming up there? As the Secretary said, hard work is lying ahead of everyone. How do you see the future?

FOREIGN MINISTER SCHUESSEL: Well, first of all, my creed is that Europe and America together can do a lot. If we work together and if we cooperate, success is easier for the Americans and for us.

Second, I think there are a lot of obstacles ahead of us - economic problems. Don't forget that the Palestinian economy needs support. There are enormous problems internally -- lack of sufficient jobs; the Palestinians need to create around half a million jobs for the next ten years. So if we work together, I think a lot can be done.

Second, according to the importance of our economic assistance, I think you can't separate economic assistance from the political framework at all. Therefore, I think water resources, infrastructure, work to ease the fate, the problems of refugees -- these are political problems, as well. If we cooperate, and if we work together -- Americans, Europeans, Palestinians and Israelis - I think a lot can be done, together with the other important players in the region.

QUESTION: For Chairman Arafat and Secretary Albright -- there has been a Palestinian complaint that they are losing $350 million every year, which is the tax money that the Israeli Government doesn't pass to them. Have you discussed this, and do you have any suggestions about to deal with it?

CHAIRMAN ARAFAT: (Through Interpreter) This is an issue that is subject to discussions and conversations between us and them. It's related to two main issues: one is the customs money and the other one is the taxes money.

SECRETARY ALBRIGHT: This is a subject that we have talked about. When we were at Wye, we discussed the importance of having an economic committee that would look at various aspects of this kind of a question; but a lot of this is already part of the agreements that have been made. But it is a subject, as the Chairman said, that we have discussed.

QUESTION: Chairman Arafat, sir, can you confirm the reports that some of the money was diverted to your loyalists? And also, could you please elaborate on your statements, your plans to form a Palestinian state with Jerusalem as the capital?

CHAIRMAN ARAFAT: (Through Interpreter) When we went to Madrid, we went on the basis of the principle of land for peace and on the basis of UN Resolutions 242, 338 and 425. Then after that, we went to Oslo and we reached the Oslo agreement. The Jerusalem issue remains the number-one issue, particularly during the permanent status negotiations. When I say Jerusalem, I say Holy Jerusalem; that's the part that I mean.

Jerusalem will remain the number-one item on the agenda of the permanent status talks. As you know, UN Resolution 242 applies to Jerusalem because its territories that were occupied in the 1967 war.

QUESTION: Mr. Chairman, what is your reaction to today's conference? Have you been satisfied with what you've heard? And do you think that the money that the Palestinians will receive in the years to come will help to silence your critics within the extremist movement, who feel that you should not be making the moves that you have towards peace with the Israelis? Thank you.

CHAIRMAN ARAFAT: (Through Interpreter) First of all, I would like to thank President Clinton and Secretary Albright for all the efforts that they have exerted today and all the efforts that they have exerted before today. The preparation for this conference was well done. I thank all the participation and all the participants in these efforts - the European Union as well as other countries.

My answer is yes, I am satisfied regarding the results of this conference, and I am confident that these pledges will be carried out precisely as they were mentioned today.

You can ask the president of the World Bank and others about the various procedures that were adopted during the last five years regarding the money and the projects. I assure you that these procedures will be followed during the next five years as well.

QUESTION: Mr. Wolfensohn, I'd like to ask why -- (inaudible) - close to half of the World Bank's commitments have not been put into play in the Palestinian area, have not been disbursed; and whether the big difference that you can read between different organizations and different countries as to how much of committed money is being disbursed and whether that reflects different donor policies.

MR. JAMES WOLFENSOHN: The reason that you haven't had a full commitment already is that it takes time to build schools, to build sewers, to introduce legal systems, to deal with infrastructure. And in fact, we monitor this very closely, and the rate of spending in Gaza, West Bank is in fact ahead of our normal rate. So there is no - you will find in every country where we have approved loans that there's always an amount that has not been spent.

We have, in fact, at the moment, got a rather good progress in terms of implementation; so there's nothing to be drawn from that. We are seeking to do additional projects, and when we get to those you'll find also that after one or two years that there will still be money to be spent. That's the reason for it.

QUESTION: (Inaudible.)

MR. WOLFENSOHN: As regards differences in donor policies, I can't speak for all the other donors. I know that in the case of the Bank's programs that we work closely with the Palestinian Authority, that we have independent audits, that we're trying to review the effectiveness of the projects that are being implemented. Some are good and some are less good; and that is true in every country.

So what I'm more than happy to say is that we've had total cooperation from the Palestinian Authority in terms of the projects. My judgment is that their quality is really rather good.

QUESTION: Madame Secretary, if you permit it, a question on a different subject. What is your advice to Britain concerning the case of former Chilean President Augusto Pinochet?

SECRETARY ALBRIGHT: I'm not in the business of giving advice on this. We have read the law lords' decision with a great deal of interest, and I think that we are not prepared to make a statement about the merits of the case. The United States is committed to principles of accountability and justice, as shown by our strong support for the International War Crimes Tribunal in former Yugoslavia and Rwanda; and the record of the United States in working to see those responsible for those kind of crimes brought to justice is second to none.

At the same time, the United States is also obviously firmly committed to democracy and the rule of law in Chile. I think we believe that in Chile, the citizens of a democratic state are wrestling with a very difficult problem of how to balance the need of justice with the requirements of reconciliation. I think significant respect should be given to their conclusions.

QUESTION: Madame Secretary, if I may ask about not a very different subject, about the money to Israel, you are reportedly discussing with Congress about $1 billion in aid to Israel. We know that money is fungible, but are you discussing at least any conditionality on this money - not to be used in building by-pass roads or for settlement activities in the West Bank and Gaza?

SECRETARY ALBRIGHT: We have just begun our discussions, and whatever moneys we ask for would be in furtherance of the peace process and the Wye Memorandum.

QUESTION: Mr. Arafat, two years ago this week you welcomed me and a group of religious Jews into your home, and the request we made of you, Mr. Arafat, was for a change in the tone of what you say to your people and what you say on the Palestine Broadcast Corporation. I hold here an 18-page document of the rhetoric of the last three weeks, four weeks: only calls for Jihad, war, calling Jews the children of Satan. Will there be a change in the way in which you speak to your people - not at international conferences - but you will call for your people, directly to them for peace and reconciliation? Thank you.

CHAIRMAN ARAFAT: (Through Interpreter) I challenge you if you can say that I said those words. I talk about the Jewish people as cousins. We are all the sons and daughters of Abraham. Do not try to defamate that image.

[End of Document]

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