12 - 18 July 2001
Issue No.542
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Al-Ahram Weekly Online 12 - 18 July 2001 Issue No.542 |
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Home to roost
Whatever happened to Israeli Foreign Minister Shimon Perez's new Middle East? All those joint ventures, all that economic cooperation that was supposed to be in the vanguard of forging a more stable regional environment, one based on the pursuit of mutual benefits rather than conflict, never really got off the ground. Nor is there any immediate prospect of that particular piece of pie in the sky coming down to earth.
The sorry tale of Israeli participation in the Midor oil refinery provides a salutary lesson in what has happened to prospects for economic cooperation between Israel and those Arab neighbours with which it has signed peace treaties. The Israeli private sector, in the form of the Merhav group, acquired a 20 per cent stake in the project. It quickly withdrew, however, and its share in the venture was bought by the National Bank of Egypt. The decision, it was widely reported, was based on financial considerations, though no one is particularly convinced by that line of reasoning.
Whatever, the fact is that Israel has withdrawn from what was the most important joint cooperation project to have yet emerged. According to Minister of Petroleum Sameh Fahmy, it is just a little less than a year ago that the original consortium was conducting feasibility studies for the construction of a pipeline to export Egyptian oil to Israel. How much can change in a year.
Negotiations are now underway which will pave the way for the entry of a new partner into this project. A Kuwaiti investor is currently considering the purchase of the 20 per cent stake acquired by the NBE from the Merhav group for a reputed $200 million. And this is likely to provide a far more viable blueprint for regional economic cooperation than Israeli participation ever did. Given that the forging of common interests divorced from any progress along the path towards resolving the Middle East conflict have proved so illusory, the most obvious option is to replace Egyptian-Israeli cooperation in this domain with inter-Arab joint projects.
Businessmen inside Egypt have for some time now been leading advocates of increased Egyptian- Israeli cooperation. But even in this group there has been a sea-change, as businessmen back away from further undertakings with Israeli partners against a backdrop of ever more coercive Israeli policies towards the Palestinians, and ever greater use of violence and terror to quell the Intifada.
All of this has led to a negative climate as regards engaging in joint investment projects between Israel and any Arab partner. The past record of the Middle East North Africa Conferences, held successively since the mid nineteen nineties in Casablanca, Cairo, Amman and Doha, furnish quite enough evidence to illustrate that any advance in Israeli-Arab cooperation is conditional on a just Palestinian settlement. Without this happening, there can be no prospects for long term investments coming into the Middle East region as a whole. And as the violence continues, opportunities for joint economic action will diminish even further.
Precisely because of the militancy manifested by the current Israeli regime the element of political risk in the region is increasing daily. And because investors cannot operate in a vacuum Egyptian businesses will continue to refuse to embark on joint projects with Israel in defiance of public opinion. The political fallout will continue to hit Israel particularly hard. Tourist flows will be more or less reduced to zero, unemployment will rise and, in the medium term, those who arrived with the dream of residing in a land of opportunity will seek to leave this "homeland" for other, less embattled venues.
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