June 26, 2019 / 2:03 PM / 2 months ago

IMF's Lagarde says Israel-Palestinian peace needed to draw lasting MidEast investment

FILE PHOTO: Christine Lagarde, managing director of the International Monetary Fund (IMF), speaks at the Group of 20 (G-20) high-level seminar on financial innovation "Our Future in the Digital Age", on the sidelines of the G-20 finance ministers and central bank governors meeting in Fukuoka, Japan, on Saturday, June 8, 2019. Kiyoshi Ota/Pool via REUTERS/File Photo

MANAMA (Reuters) - An Israeli-Palestinian peace deal is needed to bring lasting investment to the Middle East region, the International Monetary Fund’s head said on Wednesday.

Christine Lagarde told a conference on a $50 billion U.S. plan for Arab-Israeli peace that economic improvement in the West Bank and Gaza could happen under three conditions: that the Palestinian authority undertakes comprehensive economic reforms; that Israel eases restrictions on the movement of goods, people and capital; and with stronger financial support from international donors.

“Improving economic conditions and attracting lasting investment to the region depends ultimately on being able to reach a peace agreement,” she said after attending the Trump administration’s Peace for Prosperity workshop in Bahrain.

“Peace, political stability, and re-establishment of trust between all the parties involved are essential pre-requisites to the success of any economic plan for the region.”

The U.S. says its economic plan will be a foundation for Israeli-Palestinian peace but Palestinians and many other Arab authorities have dismissed it as pointless without a political solution to the decades-old conflict.

Neither the Israeli nor Palestinian governments are attending the event.

Lagarde said the IMF was ready to work with all parties on policies to maximize the benefits of new investment in the region. She told a panel discussion that growth in the West Bank and Gaza must be focused on jobs.

The IMF expects the Palestinian economy to contract by 1.6% this year and says unemployment stands at 30% in the West Bank and 50% in Gaza. It has been operating in both areas since 1995.

Reporting by Lisa Barrington and Davide Barbuscia

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