The Political Economy of Middle East Peace

The Impact of Competing Trade Agendas

J.W. Wright Jr.

• Publisher: Taylor & Francis
• Year: 2013
• Print ISBN: 9780415183956
• eBook ISBN: 9781134690138
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The Political Economy of Middle East Peace looks at the political economy of the Middle Eastern peace process with a focus on the politics of trade. Contributors investigate the ways new commercial alliances develop as a result of economic agencies established via the Arab-Israeli peace process and look at institutions which contribute to redirection of Arab intra- and inter-regional trade, such as the Palestine Monetary Authority, the Middle East Development Bank and free trade zone agencies in Aquaba and Dubai.

Part I

REGIONAL AGENDAS

1

ARAB–ISRAELI RELATIONS IN A NEW MIDDLE EAST ORDER

The politics of economic cooperation

Laura Drake

In peaceful conditions we could imagine communications running from Haifa to Beirut and Damascus in the north, to Amman and beyond in the east, and to Cairo in the south.…The Middle East, lying athwart three continents, could become a busy centre of air communications, which are now impeded by boycotts and the necessity to take circuitous routes. Radio, telephone and postal communications, which now end abruptly in mid-air, would unite a divided region.

Abba Eban, 1967¹

Introduction

Although the concept of a “new Middle East” is often portrayed as the personal vision of Israel’s elder statesman Shimon Peres,² the idea of “Middle Easternism,” if not the label he chose for it, precedes him by at least a quarter-century. Indeed, it represents one of the grand objectives that the Israeli state, under Labour and Likud governments alike, has sought and demanded practically since its inception. Israel’s kind of peace is a structured peace in that it mandates the initiation of certain irrevocable processes. These include the establishment of normal relations with Arab states and the creation of webs of complex interaction in many different fields among the former enemies. Egypt’s commitment fully to normalize relations was a central demand of the Likud government that concluded the Camp David peace treaty. Cairo is often accused of violating the agreement by not living up fully to its normalization stipulations – hence the allegations of “cold peace.” Indeed, Tel Aviv has long recognized that a state of war, or even cold war, once terminated by the signing of a treaty, can always be restored as political conditions evolve. The act of signing a piece of paper is a simple event. The signed document can be torn up, ignored, or overtaken by events and rendered obsolete. To avoid that scenario Israel has historically been interested in pursuing a kind of peace that is meant to transcend the particular character of the regime of the day, whether Arab or Israeli, to create a process of peace and not a mere event. An event – the “historic handshake,”³ the proverbial signing ceremony on the White House lawn – can be overtaken by a rival event that proves to be more salient, such as a revolution or sudden change in regime.

Singular events, in other words, lack structure. While an event is easily overtaken by a rival event, it can be completely dwarfed in significance by a rival process or trend, which does have structure and therefore occurs on an entirely different order of magnitude. The then Israeli prime minister, Shimon Peres, was trying to engineer a process which, had it progressed beyond a particular point, should have reached a degree of structural formidability in which it would no longer be subject to reversal by either the Likud or Arab rejectionists. The Likud, for its part, has been known for its efforts to foreclose the decision of the international consensus – the formula of “land for peace” enshrined in United Nations Security Council Resolution 242 – as a historical option, once and for all. This was to be done through the gradual articulation of its own process, that of “creeping annexation” via the transformation of West Bank settlements into veritable cities.

As Peres was conducting his negotiations with the Palestinians, he was indeed constrained by that process; especially in his negotiations with the Palestinians, he was confronted by the proverbial fait accompli, or what the Israelis call the “creation of facts on the ground.” Another salient example of a process in the Middle Eastern context is the gradual progress of Islamic fundamentalism. In short, a process, unlike a single event, is not as vulnerable to the shocks of counter-events.⁴ Although a process can be overtaken by a more powerful, opposing process, its prior presence in the arena tends to deter the emergence and evolution of rival processes in incremental fashion, thus preventing the counter-trend from making the initial inroads that are prerequisite to eventual success.

In Israeli strategic thought the meaning of the peace process is conceived as the “normalization of relations,” achieved through the exchange of embassies, cultural, and interpersonal contacts among the respective populations, “regional cooperation” in the economic realm, and, eventually, a unified regional security regime. The establishment of peace as a process and not merely as an event has the consequence of “concretizing peace,”⁵ affording it the attributes of meaning and relevance, and providing it with its own independent historical dynamic. As the scenario of a formal, region-wide peace very recently appeared on the Middle Eastern event horizon, Israeli objectives and strategies regarding the shape of the normalization to come began to appear in detailed fashion. The nature of Arab responses to Israel’s specification of its future goals was also beginning to come within the historical line of vision. The insights into the future that have been generated by the developments of that brief period are invaluable. They constitute a precursor of things to come, a veritable storehouse of knowledge as to the concrete intentions of the Israeli establishment regarding normalization and the kind of reaction to be expected from Arab opponents of normalization if and when treaties are concluded between Israel and the remaining Arab states at some future date.⁶

What exactly do the Israelis mean by the concept of regional normalization, and to what extent do Arab states and populations share the Israeli vision? The question goes far beyond the potential economic benefits to this or that Arab state, or the present feasibility of this or that regional cooperation project. Indeed, the concept represents nothing less than an attempt to reconstruct the regional state system, to transform it from a dualistic Arab–Israeli system into a fully integrated system existing under a single “Middle Eastern” umbrella. The systemic character of the change Israel intends is best conveyed in its Arabic form – al-nizam al-sbarq al-awsati al-jadid, the “new Middle East order,”⁷, or sbarq awsatiyya, “Middle Easternism,” for short. These Arabic constructions should not be understood in terms of the Arab conspiracy theory; nor are they acting as a regional parallel to the Western far-right conspiracy theories surrounding the so-called “new world order.” Nor should they be understood to be something as extravagant as envisioned by their European predecessors – such as the regional integration on the model of the European Union, or even its precursor, the regional “security community” as envisioned for the “North Atlantic area” by the late international relations theorist Karl Deutsch.⁸ Rather, they refer to the restructuring of strategic, political, economic, and cultural relations among existing states to make room for Israeli participation as a major power, but do not portend any kind of chemical fusion among the units themselves.

In the larger theoretical sense, this age-old vision appears to resemble the systematic establishment of regional webs or networks of “complex interdependence”⁹ of the kind advocated by neoliberal institutionalists in the global arena. They see the establishment of such linkages as the best guarantee against the reemergence of Arab hostility at some future date. The construction of a new order along these lines involves the quite mundane task of constructing the small individual links which, in their synthesis, are aimed at producing an emergent result at the system level. Here we examine in some detail the main characteristics of the links Israel is seeking to create with Arab states and the likely Arab responses to these efforts in the context of a future regional settlement.¹⁰ Although the phenomenon is regional in scope, a high degree of focus is concentrated on Syria and Lebanon as the last of the Arab confrontation states and the strategic gateway through which Israel must pass to reach the Arab world at large. In the words of George Nader, “A Syrian–Israeli peace will be the underpinning that will reshape a new regional order.”¹¹ The importance of Syria has been conveyed in the same way; the signing of an agreement with Damascus is viewed as the key to peace with the entire Arab world.¹²

At the bilateral level, Israel tends to view economic cooperation with Syria as a necessarily integral component of peace between them, or, as Gideon Fishelson put it, to give Israel’s Arab counterparts a “vested interest” in peace.¹³ An individual from the government of Shimon Peres (1995–6) described by the Israeli press as a “senior government official” called it “one of the two main pillars of brokering peace between the two countries, alongside security.” In contrast to Jordan, with which economic cooperation is described as desirable but not necessary for peace, the lingering Israeli doubts about Syrian intentions have rendered “necessary” that which was previously considered to be theoretical and visionary; in other words, “economic cooperation must stand alongside the security net,” so that “close economic links could ensure the continuation of the peace process whether or not the Syrian leaders really want it.”¹⁴

The Syrians, though they reluctantly tolerated the placement of economic cooperation issues on their bilateral negotiating agenda, tend to prefer a more natural, spontaneous form of peace rather than one whose rules are organized in advance. Damascus believes that peace should follow the lines of United Nations Security Council Resolution 242, a resolution ceaselessly advocated by the United States in past years; the Syrians would be liable to consider any further demands on them in the way of peace as an unwarranted moving of the goalposts.¹⁵ This is even more the case with UN Security Council Resolution 425, which calls on the Israelis in unconditional fashion to “withdraw forthwith its forces from all Lebanese territory.”¹⁶ Some Lebanese, citing Resolution 425, do not believe the normalization of relations with Israel is incumbent upon them since there is not so much as a hint of it in the resolution. They say, “Leave and we’ll decide.”¹⁷ Therefore it is unlikely that either Lebanon or Syria will commit itself in irreversible fashion to any blueprint whose key aspects would intrude directly on the future sovereignty of either of them.

Economic cooperation, then, as one aspect of normalization, is primarily a political and not an economic issue. While there are economic ramifications, the question of whether or not this and other aspects of normalization eventually materialize on the ground is an issue of fundamental strategic importance for the future of the Middle East region. Arab fears regarding the potential domination of their economies, or the creation of what Keohane and Nye would call “asymmetrical interdependencies”¹⁸ with Israel (discussed below), should be understood not so much for their strictly economic effects but in terms of strategic repercussions. As Keohane and Nye point out, asymmetrical interdependencies, from an international political point of view, are “sources of power among actors.”¹⁹ Any state entering into situations of interdependence wants to be assured that such interdependence cannot someday be used against it, even more so when interdependence is one-sided as it is likely to be in the Arab–Israeli context.

In assessing the prospects for a full-blown Middle Easternism in the context of system change, the focus is on the nature of Arab perceptions and fears regarding the economic cooperation envisaged for a new Middle East order. These fears derive from Israel’s economic and political strength, the role of geographical and functional centrality that would be afforded it in the context of economic cooperation, the creation of interdependencies, and the additional strategic leverage all of these would generate for Israel. After identifying and explicating the nature of these fears, we shed light on the dangerous chasm that is growing up in individual Arab states between the official Arab policy of peace with integration on the one hand, and the popular preference for peace with separation on the other.

There are significant sectors in Arab civil society, especially among the professional and highly educated, who deplore the concept of normalization, who do not trust Israel’s intentions even in the context of peace. Their opinions are shared by the adherents of Islamist ideology, even in its moderate variation. These elements view Israel’s very establishment as evidence of its untrustworthiness and hostility toward them; therefore the passage of time is not seen as relevant. The peacemakers, or at least most of them, once perceived Israel in this same way. However, given Israel’s demonstrated superiorities and the proven impossibility of ever confronting it through military means, they have reconciled themselves to forgetting about the past and starting over as if it never happened. This means accepting Israeli definitions of peace, in which Israel is taken on as a key partner by Arab states in a joint effort to build a more stable future for themselves and their peoples. The critical mass of the Arab populace probably lies somewhere between these two poles.²⁰ Arab populations seem to want prosperity rather than confrontation, but they would rather have invisible peace partners – a Middle East without war, but also without Israelis directly in their midst.

Israel’s centrality in a future Middle East

Israel envisions for itself a central role in a future Middle East, a function of its military and economic power and its geographically central location. This centrality forms the basis of much of the official Arab skepticism concerning Israel’s intentions. Part of the problem seems to lie in Israel’s more or less bilateral approach, which Arabs fear will ...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Dedication
• Contents
• List of illustrations
• Notes on contributors
• Prologue
• Acknowledgments
• Introduction
• Part I Regional agendas
• Part II National agendas
• Part III Border agendas
• Epilogue: From cold war to cold peace: thoughts on the future of the peace process and the political economy of Middle East trade
• Select bibliography
• Index