The US is putting pressure on the shareholders in the Middle East Development Bank (MEDB) to agree to a declaration calling for the full lifting of the Arab boycott of Israel that will accompany the articles of association of the bank. The US initiative emerged during the latest shareholders meeting in Cairo on 13-14 February when the candidates to make up the technical team responsible for setting up the bank were put forward (MEED 23:2:96).
The statement calling for an end to the Arab League’s boycott of Israel will be included in the declaration to be annexed to the articles of association. The declaration is intended to provide a general understanding for interpreting the articles of the bank.
However, there has been a mixed response from the delegates at the talks and Arab states.
‘Of course, it is a sensitive point, which has to be worded carefully,’ says one European delegate at the Cairo talks. ‘I would say the work is 85 per cent done. We are still working on a regional agreement on the wording of the text.’ Officials close to the talks say the US is keeping up the pressure to ensure the bank plans do not lose momentum. ‘Having led the process, the US wants to go as quickly as possible before the (presidential) elections in November 1996,’ says one official.
Charles Schotta, deputy assistant secretary for Middle East policy at the US Treasury, has been appointed co-ordinator of the technical team that will be responsible for establishing the bank’s structure and operations. Other candidates that will make up the team of about 10 people have yet to be approved.
The technical team will begin their work at the end of March or start of April.
The articles of association are expected to be agreed at the end of February, without a further shareholders meeting. The charter will be signed at the UN by the 19 founding shareholders, after their respective governments have approved the plans.
The largest shareholders are the US, Japan, Italy and other European states. The main regional shareholders are Israel, the Palestinians, Jordan, Egypt, Morocco, Turkey and Tunisia. Still opposed to the project are a majority of European states, including Germany, the UK and France, which have consistently argued that there is no need for another regional lending institution. Instead, the EU has been moving ahead with their own initiative to set up a regional body to co-ordinate existing resources.
However, the EU’s plans have been scaled down since they were first proposed, while the development bank plans have gathered momentum. The latest proposal from Germany suggests a committee to co-ordinate between the European Commission’s activities and the Amman-based Regional Economic Development Working Group. The working group was set up under the multilateral peace talks and is headed by the EU.
The committee would meet twice a year to discuss financing for project preparation, and would then approach existing regional institutions to finance the projects (MEED 24:11:95).
The US has said that it is hopeful that the EU can still be won over to support MEDB.
The bank has paid-up capital of $1,250 million, and authorised capital of $5,000