Mideast 'Marshall Plan' faces obstacles

WASHINGTON, July 24 (UPI) -- Supporters of Israelis and Palestinians on Wednesday complicated prospects for a massive new aid package for the troubled region by demanding separate concessions before the plan goes forward.

Experts on the Middle East also told the panel that the developing idea of a "Marshall Plan" for the Middle East was dead on arrival until the two sides make peace -- even as the current cycle of violence continues to spin out of control with no end in sight.

"The most effective way to achieve growth in the Middle East will be for the conflict to end, and then the establishment or expansion of democratic political institutions, free market economic structures, and sound social and fiscal policies," said former Senate Majority Leader George Mitchell.

Mitchell, who chaired an international fact-finding committee on violence in the Middle East, testified before the House International Relations Committee on Tuesday. The committee is weighing a possibly huge economic plan lawmakers hope might ease the unemployment and poverty, particularly among Palestinians. It is among the vast pool of unemployed young Palestinians that suicide bombers are recruited. Lawmakers are calling the idea a "Marshall Plan for the Middle East," after the sweeping U.S. aid program following World War II that helped rebuild war-ravaged Western Europe.

"We have an opportunity to use American leadership to promote regional cooperation as a means of increasing trade, promoting investment, and improving the prospect of peace and security for the people of the Middle East," said Chairman Rep. Henry Hyde, R-Ill.

Hyde called for a new, temporary agency to make investments in the private sector to spur job creation. But Hyde admitted that investment in the Middle East is not viable until there is peace in the region.

"No one will invest so long as the killing continues," Hyde said.

Supporters of Israel, meanwhile, signaled they might demand that Palestinians implement a series of reforms before they would support an aid package, including steps to eliminate corruption, encourage a free press and respect women's rights.

Committee Ranking Member Tom Lantos, D-Calif., a strong supporter of Israel, said the money cannot go to Palestinians until they reform. Lantos said the money could fall into the hands of terrorists. "Such assistance could quickly become a weapon in the terrorist arsenal against us," Lantos said.

Supporters of the Palestinians, on the other hand, have warned that the plan could just as easily become a pipeline of money to Israeli contractors and businesses under the guise of helping the Palestinians. "There are a number of plans," Arab American Institute President James Zogby said Tuesday. "Some that are being taken too seriously are Israeli-generated and designed to help Israeli purposes."

Hiba I. Husseini, a special adviser to the Private Sector Development in Palestine, a coalition of Palestinian businesses, said no aid package would work until a Palestinian state had first been established. "Over the medium-term, the Marshall Plan for building the Palestinian economy can succeed only if the indices of statehood are there," he said.

Mitchell said the prospects for peace in the region were uncertain, but agreed that at some point the United States should pitch in on the economic front. "Despair is the fuel for instability and conflict everywhere," Mitchell said.