Monday, November 05, 2007

Put not your trust in princes

YNet has a provocative editorial by Sever Plocker, arguing for territorial compromise from a purely economic perspective:

Oil-exporting Mideastern countries earned roughly $600 billion from oil and gas exports. In the years 2003-2006, the export revenues of these countries totaled about $2,100 billion.

This year, export revenues of Middle Eastern oil-rich nations will reach another $700 billion; should the price of oil reach $100 dollars a barrel, the revenues will leap forth to $850 billion. Next year, in 2008, the Arab-Muslim Mideast’s oil revenues will cross the $1,000 billion mark. We should remember this number: One thousand billion dollar revenues from oil and gas exports in one year.

Israel’s GDP, that is, the total value of all the products and services produced in Israel, will total roughly $170 billion this year. Or in other words, the Muslim-Arab world’s oil export revenues are at least six times higher than all of Israel’s domestic production….

It’s hard to exaggerate the implication of such figures. They shape a new Middle East, but not the kind of Mideast President Shimon Peres dreamed of. Arab and Muslim oil exporters no longer need Israel’s assistance in order to integrate into the global world. The world is knocking at their doors. The approved investment plans of the Emirates alone are estimated at $800 billion for the next five years.

And we are not there.

A two-hour flight away from Tel Aviv, on the sands of the desert, we are seeing the emergence of an oil- and gas-based Arab-Muslim economic empire never before seen in this region. Its power will grow from one year to the next. It will be a major player in deciding the fate of the global economy.

Yet all of this is happening without us. The Arab economic prosperity, which is so close to our borders, is completely skipping us. It is still not being directed at us. The Arabs have not yet internalized their power and wealth. It came too quickly and too easily. Yet they will internalize it, grasp it, and start conducting themselves accordingly.

For Israel, this is the last chance to “get on the bandwagon” and join this new reality. We must change our national perception: Israel’s economy, with all its technological achievements, will continue to dwarf in the face of the accumulated wealth of the Arab-Muslim Mideast. Our economy will decline to a much greater extent if we do not have any access to this wealth.

Such access can only be facilitated by signing an Israeli-Palestinian agreement to end the conflict. The most blatant Israeli existential interest is to advance the signing of such agreement, and through it normalize our ties with wealthy oil exporters – we can then start trading with them, selling to them, and taking part in their development plans.

The opening of Mideastern markets to Israel could double the annual growth rate of our economy from 5 to 10 percent. The Arab wealth would also enable an economic-financial resolution of the Palestinian refugee problem, once such agreement is reached by all parties. This will require no more than a donation of 5% of the foreign currency reserves of oil-exporting countries or of their annual export revenues. There would still be money left, via wise business investment, to turn the future Palestinian state into a growing region.

Those who prefer to keep dozens of West Bank settlements over the opening of Israeli embassies in Riyadh and Qatar and over opening the Saudi and Libyan market to Israeli exports are anti-Zionist in my view. They understand nothing when it comes to the new Mideastern balance of power. They will leave Israel deep in the shadow, and in practice jeopardizes the foundations of our existence.

This is a seductive argument, one that many Israelis subscribe to.

It is also wrong, shortsighted and dangerous.

While he spends most of the article discussing the undeniable growth of the oil economy, Plocker papers over exactly how Israel’s withdrawal from the West Bank would turn the implacably hostile Arab world into a friendly trading partner. More importantly, he completely ignores the character of the resultant Palestinian Arab state that would be his neighbor.

The Arab economic boycott of Israel has been in place, officially or unofficially, since before 1948. Israel’s trade with Egypt and Jordan has not skyrocketed in the time since their respective peace agreements; in fact some Egyptian firms have been penalized by the WTO for still complying with the boycott. Conversely, clandestine trade with Arab countries still nominally at war with Israel continues to grow. Israel would probablybenefit economically by an agreement but the trade would remain clandestine and hidden to the Arab public and would be hampered by the anti-semitism that has not abated at all in the Arab world. There would be no bonanza for Israel.

Plocker somewhat deceptively implies that Israel’s economy is shrinking in the face of this tsunami of Arab growth: “Our economy will decline to a much greater extent if we do not have any access to this wealth.” Of course, Israel’s economy is not declining at all; as even Plocker observes in other columns. He probably means “relative to the Middle East” but this is much different from the doom and gloom he is implying. It is not clear why Israel is threatened by an annual economic growth of 5%, regardless of the growth of the oil rich countries. It is also a fantastic guess on Plocker’s part that Israel’s economic growth would double should trade increase.

Israel’s economy is also far more diversified than that of the Gulf states. Plocker makes a basic error in assuming that the boom in oil prices will continue unabated. It is quite likely that these high energy prices will spur the faster development of alternative energy resources as they become more economically feasible, and the stunning growth that he forecasts would then disappear. The Arab world’s economy is so heavily weighted to energy that it is not a very stable area to subsume Israel’s security interests.

Plocker is an economic editor for Yediot Aharonot so perhaps he can be forgiven for looking at the world through the prism of economics. Even so, how much has Israel benefited economically from its withdrawal from Gaza? The IDF still makes daily forays into Gaza to root our terrorists; Israel is spending money to develop anti-Qassam defenses, Sderot’s economy is close to nonexistent. Israel’s economy has grown since then but how much has been because of the goodwill engendered from the withdrawal and how much would have happened anyway? If Plocker wants to use a purely economic viewpoint to argue for a Palestinian Arab state, these are the questions he should be researching.

Which brings up the weakest part of Plocker’s argument: Israel’s security. It is likely that an independent Palestinian Arab state will, in short order, turn into an Islamist state. Israelis so desperately want peace that they are willing to turn a blind eye to what is happening in the Palestinian Arab world in particular, and the Arab world in general. Only last year Hamas won a popular election and even with the hundreds of millions pouring in to prop up Abbas it is far from clear that a new election would have any different results. An Islamist state on Israel’s eastern and southern borders - with only a few miles between it and the Mediterranean - is not worth any amount of money.

Even if Abbas retains leadership, he has little control over the terrorism that is sure to follow any agreement. Instead of Israeli checkpoints stopping countless terror attacks over the Green Line, Israel would return to being a nation under siege.

Plocker’s wishful thinking comes into full display when he airily says that the powerful oil-fueled Arab states would put billions of dollars into solving the “refugee” problem. Why, exactly, would a peace agreement with Israel make Arab states more likely to help their Palestinian “brethren” when their trillions have failed to do so up until now? On the contrary, the Arab states have made it clear that they want to keep the Palestinian Arabs in as much misery as possible, giving next to nothing to UNRWA and giving more money towards Palestinian terrorism than housing. They have passed laws enshrining discrimination against Palestinian Arabs. They have made it clear that they want to “refugee” problem to fester, not disappear.

And, unfortunately for the Israeli optimists, the reason is because they are still more interested in destroying Israel than helping Palestinian Arabs. While they might allow some Israeli agricultural equipment or medicines to arrive on their lands, they are still living with the ultimate insult to Arab masculinity - the existence of a Jewish state on Arab lands and the constant reminder of their war losses. Economics does not trump the deep-seated bigotry that the average Arab has against Jews having any control over land in the Middle East. Even should Israel help create another terror state next door, there will inevitably be border disputes a la Shebaa Farms and there will always be perceived insults to Arab honor a la Danish cartoons and Israel will always be the lightning rod for Arab anger. No amount of concessions can change that.

Perhaps King David put it best when he said (Psalms 146:3)”Put not your trust in princes…in whom there is no hope.” Israel cannot mortgage its security to the promise of an economic boom that the princes of Arabia may - or may not - agree to.

(cross-posted to Israellycool)