The greatest untapped resource in the Middle East and North Africa is the talent of its people. In the recent protests, we see that talent on display, as people harness technology to move the world. It's no coincidence that one of the leaders of Tahrir Square was an executive for Google. That energy now needs to be channeled, in country after country, so that economic growth can solidify the accomplishments of the street. Just as democratic revolutions can be triggered by a lack of individual opportunity, successful democratic transitions depend upon an expansion of growth and broad-based prosperity.
Drawing from what we've learned around the world, we think it's important to focus on trade, not just aid; and investment, not just assistance. The goal must be a model in which protectionism gives way to openness; the reigns of commerce pass from the few to the many, and the economy generates jobs for the young. America's support for democracy will therefore be based on ensuring financial stability; promoting reform; and integrating competitive markets with each other and the global economy - starting with Tunisia and Egypt.
First, we have asked the World Bank and the International Monetary Fund to present a plan at next week's G-8 summit for what needs to be done to stabilize and modernize the economies of Tunisia and Egypt. Together, we must help them recover from the disruption of their democratic upheaval, and support the governments that will be elected later this year. And we are urging other countries to help Egypt and Tunisia meet its near-term financial needs.
Second, we do not want a democratic Egypt to be saddled by the debts of its past. So we will relieve a democratic Egypt of up to $1 billion in debt, and work with our Egyptian partners to invest these resources to foster growth and entrepreneurship. We will help Egypt regain access to markets by guaranteeing $1 billion in borrowing that is needed to finance infrastructure and job creation. And we will help newly democratic governments recover assets that were stolen.
Third, we are working with Congress to create Enterprise Funds to invest in Tunisia and Egypt. These will be modeled on funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall. OPIC will soon launch a $2 billion facility to support private investment across the region. And we will work with allies to refocus the European Bank for Reconstruction and Development so that it provides the same support for democratic transitions and economic modernization in the Middle East and North Africa as it has in Europe.
Fourth, the United States will launch a comprehensive Trade and Investment Partnership Initiative in the Middle East and North Africa. If you take out oil exports, this region of over 400 million people exports roughly the same amount as Switzerland. So we will work with the EU to facilitate more trade within the region, build on existing agreements to promote integration with U.S. and European markets, and open the door for those countries who adopt high standards of reform and trade liberalization to construct a regional trade arrangement. Just as EU membership served as an incentive for reform in Europe, so should the vision of a modern and prosperous economy create a powerful force for reform in the Middle East and North Africa.
Prosperity also requires tearing down walls that stand in the way of progress - the corruption of elites who steal from their people; the red tape that stops an idea from becoming a business; the patronage that distributes wealth based on tribe or sect. We will help governments meet international obligations, and invest efforts anti-corruption; by working with parliamentarians who are developing reforms, and activists who use technology to hold government accountable.
Let me conclude by talking about another cornerstone of our approach to the region, and that relates to the pursuit of peace.
For decades, the conflict between Israelis and Arabs has cast a shadow over the region. For Israelis, it has meant living with the fear that their children could get blown up on a bus or by rockets fired at their homes, as well as the pain of knowing that other children in the region are taught to hate them. For Palestinians, it has meant suffering the humiliation of occupation, and never living in a nation of their own. Moreover, this conflict has come with a larger cost the Middle East, as it impedes partnerships that could bring greater security, prosperity, and empowerment to ordinary people.
My Administration has worked with the parties and the international community for over two years to end this conflict, yet expectations have gone unmet. Israeli settlement activity continues. Palestinians have walked away from talks. The world looks at a conflict that has grinded on for decades, and sees a stalemate. Indeed, there are those who argue that with all the change and uncertainty in the region, it is simply not possible to move forward.
I disagree. At a time when the people of the Middle East and North Africa are casting off the burdens of the past, the drive for a lasting peace that ends the conflict and resolves all claims is more urgent than ever.
For the Palestinians, efforts to delegitimize Israel will end in failure. Symbolic actions to isolate Israel at the United Nations in September won't create an independent state. Palestinian leaders will not achieve peace or prosperity if Hamas insists on a path of terror and rejection. And Palestinians will never realize their independence by denying the right of Israel to exist.
As for Israel, our friendship is rooted deeply in a shared history and shared values. Our commitment to Israel's security is unshakeable. And we will stand against attempts to single it out for criticism in international forums. But precisely because of our friendship, it is important that we tell the truth: the status quo is unsustainable, and Israel too must act boldly to advance a lasting peace.
The fact is, a growing number of Palestinians live west of the Jordan River. Technology will make it harder for Israel to defend itself. A region undergoing profound change will lead to populism in which millions of people - not just a few leaders - must believe peace is possible. The international community is tired of an endless process that never produces an outcome. The dream of a Jewish and democratic state cannot be fulfilled with permanent occupation.
Ultimately, it is up to Israelis and Palestinians to take action. No peace can be imposed upon them, nor can endless delay make the problem go away. But what America and the international community can do is state frankly what everyone knows: a lasting peace will involve two states for two peoples. Israel as a Jewish state and the homeland for the Jewish people, and the state of Palestine as the homeland for the Palestinian people; each state enjoying self-determination, mutual recognition, and peace.
So while the core issues of the conflict must be negotiated, the basis of those negotiations is clear: a viable Palestine, and a secure Israel. The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine. The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states. The Palestinian people must have the right to govern themselves, and reach their potential, in a sovereign and contiguous state.
As for security, every state has the right to self-defense, and Israel must be able to defend itself - by itself - against any threat. Provisions must also be robust enough to prevent a resurgence of terrorism; to stop the infiltration of weapons; and to provide effective border security. The full and phased withdrawal of Israeli military forces should be coordinated with the assumption of Palestinian security responsibility in a sovereign, non-militarized state. The duration of this transition period must be agreed, and the effectiveness of security arrangements must be demonstrated.
These principles provide a foundation for negotiations. Palestinians should know the territorial outlines of their state; Israelis should know that their basic security concerns will be met. I know that these steps alone will not resolve this conflict. Two wrenching and emotional issues remain: the future of Jerusalem, and the fate of Palestinian refugees. But moving forward now on the basis of territory and security provides a foundation to resolve those two issues in a way that is just and fair, and that respects the rights and aspirations of Israelis and Palestinians.
Recognizing that negotiations need to begin with the issues of territory and security does not mean that it will be easy to come back to the table. In particular, the recent announcement of an agreement between Fatah and Hamas raises profound and legitimate questions for Israel - how can one negotiate with a party that has shown itself unwilling to recognize your right to exist. In the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question. Meanwhile, the United States, our Quartet partners, and the Arab states will need to continue every effort to get beyond the current impasse.
I recognize how hard this will be. Suspicion and hostility has been passed on for generations, and at times it has hardened. But I'm convinced that the majority of Israelis and Palestinians would rather look to the future than be trapped in the past. We see that spirit in the Israeli father whose son was killed by Hamas, who helped start an organization that brought together Israelis and Palestinians who had lost loved ones. He said, "I gradually realized that the only hope for progress was to recognize the face of the conflict." And we see it in the actions of a Palestinian who lost three daughters to Israeli shells in Gaza. "I have the right to feel angry," he said. "So many people were expecting me to hate. My answer to them is I shall not hate...Let us hope," he said, "for tomorrow"
That is the choice that must be made - not simply in this conflict, but across the entire region - a choice between hate and hope; between the shackles of the past, and the promise of the future. It's a choice that must be made by leaders and by people, and it's a choice that will define the future of a region that served as the cradle of civilization and a crucible of strife.
For all the challenges that lie ahead, we see many reasons to be hopeful. In Egypt, we see it in the efforts of young people who led protests. In Syria, we see it in the courage of those who brave bullets while chanting, ‘peaceful,' ‘peaceful.' In Benghazi, a city threatened with destruction, we see it in the courthouse square where people gather to celebrate the freedoms that they had never known. Across the region, those rights that we take for granted are being claimed with joy by those who are prying lose the grip of an iron fist.
For the American people, the scenes of upheaval in the region may be unsettling, but the forces driving it are not unfamiliar. Our own nation was founded through a rebellion against an empire. Our people fought a painful civil war that extended freedom and dignity to those who were enslaved. And I would not be standing here today unless past generations turned to the moral force of non-violence as a way to perfect our union - organizing, marching, and protesting peacefully together to make real those words that declared our nation: "We hold these truths to be self evident, that all men are created equal."
Those words must guide our response to the change that is transforming the Middle East and North Africa - words which tell us that repression will fail, that tyrants will fall, and that every man and woman is endowed with certain inalienable rights. It will not be easy. There is no straight line to progress, and hardship always accompanies a season of hope. But the United States of America was founded on the belief that people should govern themselves. Now, we cannot hesitate to stand squarely on the side of those who are reaching for their rights, knowing that their success will bring about a world that is more peaceful, more stable, and more just.