The year is 2005. Your Palestine Airways flight from Heathrow lands at the sleek new airport in Gaza. A 20-minute cab ride away, you check in at the Peace Palace Hotel, a new Israeli beach resort financed by Saudi and Kuwaiti investors. Next morning, in a meeting with loan officers from United Bank of Tel Aviv & Amman, you are assured that arranging Jordanian-dinar financing for your new chip factory in Israel will be no problem. After all, Israel, Jordan, and Palestine signed a breakthrough currency union in 2004.
Fantasy? Yes. Impossible? No. Ask the 1,100 executives from Israel, Arab countries, and other lands who broke bread and talked deals at a three-day economic conference that ended on Oct. 31 in Jordan's capital, Amman. It was, for many, a first meeting between former enemies. And it could be the launching pad for a new era in the Middle East.
MULTINATIONAL RUSH. One who attended, Jordanian businessman Samir M. Kawar, has already had a taste of the future. Last year, the telecommunications entrepreneur was one of the first Jordanians to travel openly to Israel. Now he's negotiating with Israeli high-tech companies to bring technology to Jordan. "Within one year," predicts Kawar, "we'll see a change in attitude that will make this kind of dealmaking normal."
What Kawar and others like him are pioneering is probably the Middle East's most promising new frontier: the emerging economic partnership of Israel, Jordan, and Palestine. With its skilled workforce and strategic location, the Triangle--as the area is being called--"could take off quickly," says Henry Azzam, chief economist of Saudi Arabia's National Commercial Bank.
The U.S. and its regional allies are determined to reap an economic payoff from the Middle East peace process. That is why Israeli Prime Minister Yitzhak Rabin, Chairman Yasser Arafat of the Palestine Liberation Organization, and U.S. Secretary of State Warren Christopher went to Amman to bless the meeting, chaired by Jordan's Crown Prince Hassan. Unlike the Egyptian-Israeli peace, which has been buttressed by billions of dollars of U.S. aid, the plan this time is to rely largely on private business initiatives.
That is happening in Jordan. It recently liberalized its tax and investment laws and signed a trade pact with Israel. Now the Arabs and Israelis are trying to coordinate policies on everything from finance to tourism through the Amman-based Regional Economic Development Working Group and other forums. Also in the works is a $5 billion regional development bank to be based in Cairo.
Already on the drawing boards: billions of dollars' worth of joint projects, such as a Jordanian-Israeli airport to serve the ports of Eilat and Aqaba and tourist facilities on the Red Sea. Multinationals are rushing in. Sprint Corp. has announced a deal to launch Internet and E-mail services in Jordan. And Amoco Corp. is working with Italy's AGIP on a $300 million pipeline to bring Egyptian gas to the Triangle (table).
None of this means there will be no outbursts of political tension in the next few years over issues such as Israel's continuing controls in the West Bank and Gaza. "Until the political problems are solved, there is no way for Palestinian companies to embark on any real cooperation with the Israelis," says Yousef Ghanem, general manager of investment company Palestine Telecommunications.
LURING BACK CASH. There are fewer barriers between Israel and Jordan. Israel's Delta Galil Industries is setting up a joint venture in Jordan with Amman-based Century Investment Group. But Omar Z. Salah, Century's 28 year-old CEO, says he is taking heat from other Jordanians for dealing with Israelis.
Political progress in the region is also luring funds stashed abroad by wealthy Palestinians. Amman's Zara Investment, led by Palestinian tycoons Sabih Masri and Khalil Talhouni, plans to cash in on booming tourism by building five hotels in Jordan, including an $80 million Hyatt hotel-and-business complex.
All the dealmaking is a far cry from 1972, when Lova Eliav, a leader of Israel's Labor Party, was virtually ostracized politically for advocating a Palestinian state and Israeli-Jordanian-Palestinian cooperation. As it turns out, he was merely ahead of his time.