Cablegate: U/S Larson Meeting with Pna Minister of Economy,

This record is a partial extract of the original cable. The full text of the original cable is not available.




E.O. 12958: N/A

1. (SBU) U/S Larson met with Minister al-Masri on May 15 on
the margins of the World Economic Forum at the Dead Sea in
Jordan. Also present in the meeting were Larson visit
control officer Greg Lawless and notetaker Amy Schedlbauer.

2. (SBU) Larson gave the minister a copy of the draft G-8
Plan of Support for Reform and welcomed Masri's comments on
it, noting that it was still very much a dynamic draft.
Masri agreed to provide comments. Larson also invited Masri
to specify any particular areas in which he or his colleagues
were interested in working more closely. Masri stressed the
need to push private sector development.

3. (SBU) Larson then asked for Masri's thoughts on how to
work together on the next phase of the PEDG and said that he
was pleased that direct deposit has moved forward and the
World Bank Trust Fund is up and running. Masri said he had
agreed on a follow-on agenda with Consulate General Jerusalem
and thought it had been sent to Washington. He still wants
to carry through on programs, regardless of what happens in
the peace process. He said he felt the Greater Middle East
Initiative paper is similar to other initiatives that have
been discussed under the PEDG. He was interested in focusing
on private sector development since that is an area of focus
and need for assistance. He said he would meet with
Consulate General officials and others at the local level to
determine how progress can best be made.

4. (SBU) Masri cautioned that Palestinians need to start
seeing an impact. He mentioned a recent trip he had made to
Germany with a private sector delegation that had gone well
and hoped it would yield results. Masri stressed that he
wanted to strengthen institutional abilities both at the
sectoral and subsectoral levels and hoped USAID would not
decrease assistance. Larson emphasized that he also wanted
to see the private sector supported.

5. (SBU) Larson said he had seen World Bank president James
Wolfensohn a few weeks ago and understood from him that the
World Bank was studying ways by which Gaza could be made an
economically viable area. Masri said he had met with World
Bank staff earlier in the week. Speaking personally, he said
that while Israeli withdrawal from Gaza would be a good
thing, there would be no qualitative economic change for Gaza
and there will be little impact on living conditions for
Gazans as long as Israel retains control of the border with
Egypt, the seacoast, and the airport. If Israel controls the
borders, there will never be normal Palestinian trade with
the rest of the world.

6. (SBU) Masri also raised the issue of the
tightly-restricted Karni freight crossing point, at which
trucks must wait for a week to enter Gaza (a delay costing
$1500 on average). Three days previously, Masri had met with
a Gaza business committee. Their preference is to close the
crossing because it is hardly open in practice. Masri has
contacted the GOI and told them that the PA will close the
crossing if it is not really operational. According to
Masri, the GOI says it is letting in 10 vehicles per day
instead of the normal 36, while Gazans say it is closer to

7. (U) This message was cleared by Under Secretary Larson

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