SECRETARY KERRY: Klaus, thank you very much for a very generous introduction. And it is wonderful to be here with all of you. I have enjoyed participating in the World Economic Forum for many years, as Klaus said in his introduction. And Klaus, I think everybody here joins me in thanking you for creating this remarkable and important institution. It gives people a great opportunity, and we thank you. (Applause.)
I want to thank -- let me say, Mr. President Abbas and Mr. President Peres, thank you so much for those comments. I have an agreement here which you both can come up and sign if you want. (Laughter and applause.) We'll get there, we'll get there, we'll get there.
Your Royal Highnesses and your Excellencies and distinguished many guests, I want to first begin just by expressing a very special thank you to His Majesty, King Abdullah. I think all of us are honored to be in a hall that is named after his father, who fought hard for peace, and I thank him for his leadership. I thank King Abdullah for his leadership on so many issues in the region. (Applause.)
It's also very special for me to be here with President Peres. He is a great friend. For many years I have been meeting with him in Israel or elsewhere around the world, and I have long admired him for his remarkable, eloquent, and steady leadership. And thank you very much, Shimon, for what you do. (Applause.)
I'm also very, very pleased that President Abbas would be here and share his thoughts with us. He, too, is a friend who I have gotten to know better and better. We meet frequently now, and we all count on him to continue to be the essential partner for peace at this critical juncture. Thank you, Mr. President, for being here. (Applause.)
It's also a great pleasure to be in this remarkable country of Jordan, and I thank my counterpart Nasser Judeh, who had to get back to Amman. But I thank him for his hospitality always, but more importantly for his partnership as we navigate these tricky waters. And I want to say a special thank you to the Quartet Representative, former Prime Minister Tony Blair. (Applause.) He has never lost his passion for or interest in peace in this region. He has labored hard in these last years, and he is working diligently on a special project that I want to share with you in a few minutes.
I also want to acknowledge Chairwoman Kay Granger, who is here from the United States Congress. She is the Chairwoman of the Subcommittee on Appropriations, and believe me, folks, she is critical to all of us here. (Applause.)
I spent the last week traveling through the Middle East and Africa, and I have spoken with national leaders, business leaders, community leaders, and young people. I just had a session with young people at the University of Addis Ababa earlier this morning. And we talked with them, as I have talked with all of these leaders, about the enormous choices that are before us -- weighty decisions that confront us in the aftermath of the Arab Awakening -- decisions that we need to make and reach before the demographic tipping points just around the corner begin to overwhelm us.
No one doubts that this is a very complex moment in international relations. But still, I don't think that there is any secret about the conditions that are necessary for peace and stability to succeed. Those are: good governance, security, and economic opportunity. And so the real question for all of us, for President Abbas, President Peres, Prime Minister Netanyahu, all of us, is a very simple one: Will we, despite the historic hurdles, have the courage to make the choices that we know we need to make in order to break the stalemate and provide a change of life for people in this region?
How we answer that question will determine whether the popular revolutions that are transforming this region will indeed fulfill their promise. It will determine whether businesses and the booming youth populations across the Middle East and North Africa will realize their potential. It will determine whether we grasp the possibility of peace which I believe is actually within our reach.
I want to thank those who took part and are taking part and will continue to take part in the Breaking the Impasse. My good friends, Munib Masri, whom I have known and worked with and been to some of those private and quiet meetings with him in various places, and Yossi Vardi, thank you, both of you, for stepping up and being courageous. (Applause.) They represent a courageous and visionary group of people, civic and business leaders, Israelis and Palestinians who have I think the uncommon ability to look at an ageless stalemate and actually be able to see opportunities for progress.
And even as they found plenty to disagree on -- and I understand they did in the course of their discussions -- even as they fully understand the difficult history that is embedded in this conflict -- they refuse to underestimate the potential for the future.
And that's because Breaking the Impasse's guiding principle is to respect the freedom and the dignity of all peoples.
I want you to think about that, and I want to put my comments about the peace process in a larger context, if I can for a minute.
As we all remember, it was the lack of that kind of basic respect that ignited the Arab Awakening. It started with a single protest -- a street vendor who deserved the right to be able to sell his goods without police interruption and corruption. And then it spread to Cairo, where young Egyptians used their cell phones and tweeted and texted and Googled and called and summoned people to the cause. And they used the social media to organize and demand more jobs, more opportunity, and the liberty to embrace and direct their own destiny. In doing so, these individuals and these individual acts embraced values that are so powerful that they, against all probability, removed dictators who had served for years. And they did it in a matter of days.
Now, of course, there are sectarian and religious and ideological motivations to many of today's clashes that have followed those events, but those events weren't inspired by religious extremism or ideological extremism. They were driven by motivation for opportunity and a future.
And what is fundamentally driving the demand for change in this region is, in fact, generational. It's about whether the massive populations of young people, still growing, has hope that there is something better on the horizon. It's about opportunity and it's about respect and it's about dignity.
And the aspirations that are driving the extraordinary transformations that began in Tunisia and Tahrir Square -- the same ones that sparked what has unraveled into a brutal civil war with some sectarian overtones at this point, those aspirations aren't unique to any one country. They're universal. They have driven all of history.
So we ignore the lessons of the Arab Awakening at our own peril. And with an important part of the world upside down, it is imperative that all of us channel our creativity and our energy into making sure that people actually do have better choices.
The public and private sectors alike -- and this is where you all come into this. The public and private sectors alike have a fundamental responsibility to meet the demands of this moment. And one can't do it without the other. We need you at the table, Munib and Yossi and all of you.
In fact, this moment is actually -- this moment in history is actually one of the great stories of our time. But the ending remains unwritten, which is why what we're doing here is actually important. Insh'allah, we get to write that ending.
And how we do that is what I want to talk to you about here today. We have to remember that the choices being made -- whether they're being made north of here in Syria, or south of here in Yemen, or just across the Jordan River in Jerusalem, or in Ramallah, or further west in Egypt, Libya, Tunisia -- they all have something very important in common: They each offer two clear paths that really couldn't be more different one from the other, and they couldn't have more different consequences.
If we don't eagerly grab this moment, we will condemn ourselves to future conflict. We are staring down a dangerous path filled with potential violence, with the capacity to harden divisions, increase instability. And as most here are very, very aware, this will be a path that will be haunted by violent extremists who rush to fill the vacuum filled by the failure of leadership.
As King Abdullah said here yesterday, extremism has "grown fat" on conflict. If we make the wrong choices or no choices at all, dangerous people will come to possess more of the world's most dangerous weapons. We will face huge pressure on states from growing populations of refugees, just like the camps that are metastasizing just over here on the border of Jordan and Syria.
Now, everybody here knows it's not that governments or people will purposefully choose that option. That's not the concern. It's that by failing to choose the alternative and failing to take the risks for peace and stability, those with power will make the worst possibilities inevitable.
So what is the other alternative? Let me talk about that a little bit.
Governments need to pay attention to governance. They need to be open, transparent, and accountable to people. And they need to be seen implementing a vision that addresses the needs of their people -- the needs to be able to work, to get an education, to have an opportunity to be treated with that dignity and respect that brought people to Tahrir Square and to so many other causes in this region.
Countries like Egypt, Libya and Tunisia need to make the right choices, and that is a combination of building capacity -- capacity for governance, capacity for security which doesn't exist, capacity to provide jobs. They need to aggressively re-emerge into the global economic community.
And in making these choices, a significant part of the outcome of the Arab Awakening for certain will be defined by government, because the choices that government makes clearly will have an impact on the playing field. As Egypt moves toward the acceptance of the IMF and hopefully works to bring the opposition to the table, Egypt will be far stronger than if Egypt doesn't choose to do those things.
But the burden, I want you to know, does not just lie within palaces and parliaments. There is a huge role for business to play here and a huge opportunity for you to share in the success. No one here should underestimate the degree to which the private sector can promote change and force critical choices, as well as impact the actions of government. The fact is that good governance, peace, and economic development necessarily go hand-in-hand.
And that's why I believe it is time to put in place a new model for development. The old model is one that saw government make grants or give money government-to-government or invest directly in some infrastructure, some kind of public sector investment. The private sector pretty much did what the private sector thought was in the best interest of the private sector in terms of the bottom line. They did their own thing. And so while aid was government-to-government, there was a sort of division of responsibility, if you will.
In this new age, when there is such a greater amount of wealth, so much cash on the sidelines, and where we see so much pressure on governments in terms of their budgets, and where there is still such a great amount of great poverty, we need a new model for how we are going to bring order and open up the possibilities to the future. We need to partner with the private sector because it is clear that most governments don't have the money, and in certain places, the private sector actually has a greater ability to move things faster than government does. Government can facilitate. Government can leverage. And in fact, government has gained skills and knowledge about how to do that in ways that we never had 10, 15, 20 years ago. And we can do it with greater skill than ever before.
The greater Middle East and many of the countries experiencing the upheaval at this time need to seize on this new model because the task of building stability by creating millions of jobs is urgent for all of us.
Now, one thing I want to make crystal clear, and President Peres mentioned this in his comments: The Palestinian-Israeli conflict is not the cause of the Arab Awakening. But this fundamental principle of what economics can do to play a profound role in meeting the needs of both peoples is critical.
And that is what we're hoping to do now in the West Bank.
As I mentioned earlier, I have asked Quartet Representative Tony Blair and many business leaders to join together. And Prime Minister Blair is shaping what I believe could be a groundbreaking plan to develop a healthy, sustainable, private-sector-led Palestinian economy that will transform the fortunes of a future Palestinian state, but also, significantly, transform the possibilities for Jordan and for Israel.
It is a plan for the Palestinian economy that is bigger, bolder and more ambitious than anything proposed since Oslo, more than 20 years ago now. And this, the intention of this plan, of all of its participants, is not to make it merely transformative, but frankly, to make it enormously powerful in the shaping of the possibilities of the future so that it is more transformative than incremental and different from anything that we have seen before.
To achieve that, these leaders have brought together a group of business experts, who have donated their time, who have come from around the world over the course of the last six weeks to make this project real and tangible and formidable -- as we say, shovel-ready. They have come from all over the world because they believe in peace, and because they believe prosperity is both a promise and a product of peace.
This group includes leaders of some of the world's largest corporations, I'm pleased to say. It includes renowned investors and some of the most brilliant business analysts out there -- and some of the most committed. One of these senior business leaders actually just celebrated his 69th birthday in Jerusalem at the Colony Hotel after spending a 14-hour day in the West Bank trying to figure it out.
When others ask them, all of them, why they're here, doing this on their own time, the unanimous answer is: "Because we want a better future for both Israeli children and Palestinian children."
Their plan begins with encouraging local, regional and international business leaders to, and to encourage government leaders in various parts of the world. I raised this issue with the President of China, with the Prime Minister of Japan, with all of our European leaders, and everywhere -- with the Brazilian Foreign Minister a few days ago, with the New Zealand Foreign Minister. All of them have on the tip of their tongues the idea that we can make peace in the Middle East and need to, and all of them are committed to be part of this effort in order to change life on the ground.
The fact is that we are looking to mobilize some $4 billion of investment. And this team of experts -- private citizens, donating their time -- are here right now. They're analyzing the opportunities in tourism, construction, light manufacturing, building materials, energy, agriculture, and information and communications technology.
This group will make recommendations to the Palestinians. They're not going to decide anything. The Palestinians will decide that in their normal course of governance. But they will analyze and make recommendations on a set of choices that can dramatically lift the economy.
The preliminary results already reported to me by Prime Minister Blair and by the folks working with him are stunning: These experts believe that we can increase the Palestinian GDP by as much as 50 percent over three years. Their most optimistic estimates foresee enough new jobs to cut unemployment by nearly two-thirds -- to 8 percent, down from 21 percent today -- and to increase the median annual wage along with it, by as much as 40 percent.
These experts hope that with their plan in full force, agriculture can either double or triple. Tourism can triple. Home construction can produce up to 100,000 jobs over the next three years, and many of them would be energy efficient.
Ultimately, as the investment climate in the West Bank and Gaza improves, so will the potential for a financial self-sufficient Palestinian Authority that will not have to rely as much on foreign aid. So just think, my friends -- we are talking about a place with just over 4 million people in a small geographic area. When you're talking about $4 billion or more and this kind of economic effort, you are talking about something that is absolutely achievable.
I am happy to say that both Prime Minister Netanyahu and President Abbas support this initiative, knowing that just as people find the dignity in a good job, a nation finds pride by functioning and growing an economy that can stand on its own two feet. This will help build the future.
Now, is this fantasy? I don't think so, because there are already great examples of investment and entrepreneurship that are working in the West Bank.
So we know it can be done -- but we've never experienced the kind of concentrated effort that this group is talking about bringing to the table.
Now, everyone here also knows how much more can be done if we lift some of the barriers to doing business, build confidence, bring people together. I just ask you to imagine the benefits from a new, open market next door, a new wave of foreign investment that could flow into both Israel and Palestine -- and Jordan, and all of them share it.
The effect that could echo throughout the region, and if we prove that this can work here, that can become a model for what can work in other places that are facing similar confrontations.
So my friends, as we gather on the shore of the Dead Sea, a destination unlike any other destination in the world, it's worth noting the key role that tourism could play in all of this. It's just one element of the broad sector analysis that I talked about, but it is one of the best opportunities for both countries, for all of the region, for economic vitality and for worldwide use of its reputation.
Today, the Palestinian Authority -- the Palestinian Territories attract fewer tourists than Yemen. Even Israel's tourism is not fully met. Until 2011, Egypt, Jordan and Syria all attracted significantly more tourists than Israel. And despite all the incredible rich archaeological and religious sites in Israel, Jordan, the West Bank, Gaza, together they still attract fewer tourists than the United Arab Emirates.
There is just no question whatsoever -- ask Tony Blair, ask the people working on this effort -- there is no question whatsoever that the powerful combination of investment in business and investment in peace -- risks both worth taking -- could turn all of this all around. Imagine a welcoming part of the world that boasts the Church of the Nativity in Bethlehem, the site of the Tomb of the Patriarchs and the Ibrahimi Mosque in Hebron, the Western Wall, the Dome of the Rock in Jerusalem, and more of the world's other great sites that have drawn tourists and religious pilgrims for centuries.
Most importantly, the success of this this new approach to development could, in fact, become its own example, its own model for the Sahel, for the Maghreb, for the Arabian Peninsula, and beyond. Foreign direct investment -- private investment, leveraged investment, visionary investment -- has the ability to be able to change the world.
Now, maybe you can get a sense that I actually believe in the potential that we have the power to unleash. But this effort -- and this is critical, critical to what was said by both of our speakers before -- this effort is only part of the answer, and it will not blossom to its full potential without the other critical part of the equation.
As we learned in the Arab Awakening, as long as prospects for economic advancement remain weak, so do the prospects for peace and stability.
But the opposite is true. The economics will never work properly or fully without the political process. The economic approach is absolutely not -- Mr. President Abbas, the economic approach is not a substitute for the political approach. The political approach is essential and it is our top priority. (Applause.) In fact, none of this vision -- but it's good to have the vision, it's good to know where you want to go, it's good to know what's possible -- but none of it will happen without the context of the two-state solution.
And the consequences of prolonging the status quo in the Israeli-Palestinian conflict is simply in no one's interest.
We are compelled to come here today to the Dead Sea in the contexts of Breaking the Impasse to ask: If we don't break the age-old deadlock, if we don't create the conditions for economic opportunity and responsive, representative governments, where does all this go?
The absence of peace is, in fact, perpetual war, even if it's low intensity. Are we ready? Do we want to live with a permanent intifada? Most important, the Palestinian Authority, to its credit and credit to the leadership of President Abbas, has taken great risks and invested deeply in a policy of nonviolence in a region where not a lot of people always adopt that in these circumstances. If this experiment is allowed to fail, what is going to replace it? (Applause.)
The truth is that when considering the security of Israelis or Palestinians, the greatest existential threat and the greatest economic threat to both sides is the lack of peace, and the ugly realities that are festering under the surface, capable of catching fire at any time. To not try to head these off would be tragic and it would be irresponsible.
Now, I have been around long enough and I have heard all the arguments against working for Middle East peace. It is famously reputed to be diplomatic quicksand. I am familiar with the cynicism and the skepticism. And after so much disappointment on all sides, I can understand exactly where it comes from.
So of course now, there is huge cynicism about this journey and it greets any push for peace. But cynicism has never built anything, certainly not a state. (Applause.) It is true that the challenge of peace is formidable. But let me say unequivocally: the necessity for peace is much greater.
Indeed, right now the strategic case for peace based on the two-state solution -- a secure state of Israel and a viable, independent state of Palestine -- the case for that has never been stronger. We talked earlier about the turmoil in the region. There is a reason for that discussion, because everyone feels the uncertainty and the instability as the Middle East slowly releases itself from the past and tries to forge a new and a democratic future.
It's now clear that the conflict between the Israelis and the Palestinians is not the cause, as I mentioned. But it's equally clear that the resolution of the conflict would bring enormous gains in the political and social environment of the region and help to symbolize and help to crystallize and help to advance the future of the entire region.
Most of all, those who suggest that a two-state solution is already a casualty of years of failed negotiation, and who say that we should search for a new and a different solution, my friends, they have noticeably failed to actually articulate one. And this is for a very simple reason: It is because there is no sustainable alternative solution that exists.
A greater Israel that would end up trying to swallow up the Palestinian people could only possibly survive in a state of institutionalized division and discord, a pale shadow of the democratic vision that motivated and animated the founders of Israel. (Applause.)
And any attempt by Palestinian politicians to wait out Israel in the hope that somehow, some day, the Israelis will just give up and go away, or that somehow they can win a one-state solution, that will only result in decades of futile confrontation and eventual disillusion, and perhaps worse, violence.
So we have no choice but to try again for peace and to find it. We have no alternative to its inevitable difficulty but of challenging and moving down that path. We have to go down that path. And we should negotiate, recognizing that despite all the frustrations, large majorities in the Palestinian Territories and in Israel both support a two-state solution. They support peace. (Applause.) What they need more than anything from all of us is a renewal of hope that peace can actually be achieved. Now, I am well aware that the credibility of anything that is called a "peace process" right now is at a very low base. I know that. I understand that.
But if we give up, we give to those who don't want reform, or who don't have the stomach to make the tough choices, an excuse for their own inaction. And two great peoples could come to be known not just for their proud cultures and their contributions to history, or their entrepreneurial energy, but they could come to be known for what they failed to do -- or even worse, what they refused to do.
My friends, beyond all the strategies and all the maneuvering, all the politics, there really are some simple realities.
The second graders I have personally seen and met in Sderot, they shouldn't have to worry about running into a bunker as part of their school day in order to avoid rockets.
And the little girls that I saw playing in rubble in Gaza when I visited it four years ago, they should be able to grow up in a neighborhood where the playgrounds aren't made of debris, and their lives are not determined by terrorists in their midst.
And the shop owners that I met in Ramallah, some just the other day, they should know that their businesses can flourish without the restrictions that are placed on them, or without the threat of violence.
Time is not on anyone's side in this -- (applause) -- and changes on the ground could rob all of us of the possibilities of peace.
The leaders of the Arab Initiative, as have been mentioned earlier, with whom I met in Washington last month, moved and changed and offered an update of the Arab Peace Initiative, and they are committed to making a dramatic step towards peace.
And we all hope and pray that Prime Minister Netanyahu and President Abbas don't allow this conflict to outlast their administrations.
Negotiations can't succeed if you don't negotiate. We are reaching a critical point where tough decisions have to be made. And I just ask all of you to keep your eyes focused on what can really be done here. Think of all that can change. That's what should motivate us. With renewed and normal relations between Israel and the Arab nations, we could end the regional boycott of Israeli goods. New markets would open up and would connect to one another, and jobs would follow in large numbers.
With renewed strength, the new neighbor states of Israel and Palestine could actually become another hub in the Middle East for technology, finance, tourism. Israel and Palestine and Jordan together could become an international finance center, attracting companies that simply won't take that risk today.
With a bold, fresh approach like the West Bank project that Tony Blair is heading up and that we discussed earlier, other things can develop here.
In the end, the only way for Israel to survive and thrive as a secure, Jewish, democratic and economically successful state is through the realization of an independent and viable Palestine.
And the only way Palestinians will obtain their sovereignty and the opportunity that comes with it is through direct negotiations with Israelis for a solution of two states for two peoples.
And I say to you, President Abbas: No one is talking about temporary borders. We are talking about an end-of-conflict, end-of-claims peace. (Applause.)
So I come here today to say at this important gathering on Break the Impasse that President Obama is deeply committed to this solution. That is why he came to Israel in an effort to try to open up the people's minds and hopes and ideas about those possibilities of peace. And I believe that people in both places responded to his call for action.
The only way that both states can succeed side-by-side is with the kind of work that we're doing here today and the kind of work that must go on in these next months in negotiations.
The true significance of the Arab Awakening isn't about what was torn down, but it's about what the people of this region can now choose to build up.
Similarly, the story of the stalemate between Israelis and Palestinians simply can no longer be about all the times that we have been let down by failed efforts. It has to be about the very real ways that we can lift people up, create opportunity, and create the conditions for peace.
I think everybody here believes in this possibility. And standing here with you at the lowest point on earth, I believe we can actually reach for the heights. And I hope we will get about the business of doing it.
Thank you. (Applause.)