Gulf study warns of Israel's economic power

A new report from the University of Kuwait is warning that Israel intends to grow its economic power. The study is called "Israel seeks to dwarf its neighbors and the Gulf states."

The report says that Israel seeks to accumulate its wealth to compete with the Arabs and especially the Gulf oil states. Allegedly, this is meant to increase the immigration of Jews to enlarge the settlements.

The study also says that Israel desires to compete with the Gulf countries on energy production "to play a more important role in the region in the future desire to stay forever as the biggest military and economic power in the Middle East. "

The report seems most alarmed at Israel's foreign currency reserves which hit a record high of about $81 billion at the end of November, compared to only $25 billion in 2004. These reserves can accelerate the production of natural gas in the Mediterranean which will in turn add more to Israels currency reserves and economic might.

The $81 billion is higher than the foreign reserves of oil-rich Kuwait and the UAE combined.

Israel is working on activating an economic stimulus plan to attract larger foreign investments and is actively pursuing them.

The report is clearly concerned with the potential of Israel becoming an energy exporter with its massive natural gas reserves that are comparable to the oil reserves in the Gulf. By 2018, Israel is planning to transfer the government's share of the profits from the sale of gas to a sovereign wealth fund, to ensure that the new cash is available for generations to come.

Israel's growth is supported by its very high investments in the area of research and development by Development Program Israel. 4.5% of its GDP goes to research and development, which is the highest rate in the world, according to the Organization for Economic Cooperation and Development.

Israel's investments are focused on high-tech and high value-added jobs. For example, Israel dwarfs the Arab Middle East and the Gulf by its number of inventors. Israeli Arabs are also far more creative and inventive than their counterparts in the Middle East and are increasingly coming to the global marketplace of ideas and creativity. Israel itself compares with European countries on the level of production and export of inventions. The Arab states aren't even in the same league.

The report says that with increased wealth, Israel will attract more Jewish immigrants especially from Europe.

The natural gas will cause friction with Israel's neighbors as Israel will use its defense forces to protect the Mediterranean drilling operations and Jordan and Egypt will be torn between accepting Israeli gas and continuing their strategic security partnership with the Gulf Cooperation Council.

It is interesting that even this relatively sober study still assumes the zero-sum mentality of Arabs. It would ever occur to any Arab that Israel wants to grow its eeconomy because it would be good for Israel; they must position it as if Israel wants to destroy or marginalize the Arab economies. While this would not be a bad thing - oil fuels Arab terror, directly or indirectly - Israel never looks at the region as zero-sum but as a win-win. That's why it wants real peace with normalization - and the zero-sum mentality is a lot of the reason that Arabs resist peace with Israel in any significant way.