Al-Ahram Weekly Online   31 December 2009 - 6 January 2010
Issue No. 979
New Decade's special edition
Published in Cairo by AL-AHRAM established in 1875

Samir Ghattas

Chronicles of what comes next

The Arabs should beware not to become victims of Israeli economic hegemony if and when direct conflict recedes, opines Samir Ghattas *

Well before the present decade the whole world knew we were on the threshold of a new millennium. That awareness did not require a reading of the stars but rather very serious planning and technical preparations. Like all countries concerned with their future, Israeli authorities started to do exactly that in the hope of staking a position among the leading nations of the world. It produced two notable projects, one called Israel 2020 and the other Israel 2028. It might be useful for us to take a closer look at these two projects.

ISRAEL 2020: In 1991, the Faculty of Architecture and Town Planning at the Technion-Israel Institute of Technology in Haifa initiated a project to create a long-range development plan covering the period 1990-2020. Work on the plan took around seven years and involved more than 250 Israeli academics from various disciplines. It also sought the contributions of dozens of internationally reputed consultants who collaborated as a team towards the realisation of the strategic objective of drafting a comprehensive social, economic and environmental plan for taking Israel from the 20th to the 21st century, including -- very significantly from our perspective -- the policies for bringing it into effect. The project also involved the participation of 10 government ministries plus the office of the prime minister, the Jewish Agency, the Israel Land Authority and the Water Commission. The combined efforts of all these participants produced 4,000 background papers that eventually coalesced into the 18-volume long "Israel 2020" project.

We should be keener than others to study the three major scenarios in Israel 2020. Above all, we have been living in the same geopolitical space as Israel for more than six decades and, as things stand, that situation will continue for many decades to come. The various dimensions of this spatial relationship has and will continue to have profound repercussions on every detail of life in this part of the world, regardless of whether we plan for them or bow to them as written fate. Simultaneously, the means and methods of managing the conflict with Israel have changed. For many reasons, it is no longer possible to return to the military option in this conflict. What is possible -- and within our power -- is to engage in a competitive rivalry in the political, economic, scientific and cultural domains, perhaps on the lines of the rivalries that exist between many countries, including some belonging to the same camp, such as the competition between the US and Japan. But if we are to go this route, we must embrace the same scientific principles, approaches and strategies as those adopted by countries such as China, Taiwan, Vietnam and South Korea in their engagements with their adversaries.

All three of the scenarios are important, all the more so as the plan not only integrates them but treats them within the context of three geopolitical spaces: the global/international domain; the domestic/national domain; and the surrounding regional environment. Perhaps of the greatest significance to us is the third, "Israel in an environment of peace". This is the scenario that presents us with the challenge of how to confront the prospect of Israeli economic hegemony under conditions of peace.

SCENARIO I -- ISRAEL IN THE PATH OF DEVELOPED COUNTRIES: Israel 2020 was clearly inspired by high ambitions; it looks forward to joining the ranks of the most industrially advanced nations and, therefore, looks to them to establish rates and trends of development. The first scenario, therefore, uses a comparative analysis approach with 24 developed countries, with an eye to benefit from their experiences and to avoiding their pitfalls. The analysis proceeded from the acknowledgement that Israel is at least one decade behind the majority of European countries. In order to close this gap effectively, the scenario advised stimulating an educational system capable of furnishing sufficient highly qualified human capital to meet the needs of a prosperous post- industrial society. One is particularly struck by how the planners viewed and handled the question of population growth. Quite simply, they transformed it from a burden upon the state to a potential strategic asset for development when equipped with the appropriate skills and modern technological qualifications.

While the scenario sees highly developed human capital as the main springboard for the country's progress, it also advises innovative structural changes, especially in demographic distribution. It proposes modelling the demographics on the "concentrated distribution" patterns in Europe, whereby inhabitants across the relatively limited available space in Israel are concentrated into modern urban communities equipped with sophisticated infrastructure and linked together with modern roads and communications systems. The communities would be situated and designed with an eye to conserving the land, benefiting from the available spatial advantages in their locations, and safeguarding the environment. It is interesting that the Israeli plan acknowledged that the European model of urban development was more appropriate to Israel's needs and, therefore, strongly advised against attempts to import the North American development model.

SCENARIO II -- ISRAEL AND THE JEWISH PEOPLE: This scenario treats development in the relationship between the state of Israel and Jews of the Diaspora. The latter have a great impact on many levels, most importantly Israel's international standing, the supply and consumption of resources, and population growth and demographic distribution.

The relationship between Israel and the Diaspora was founded on the original Zionist conception that sees the state as the sole hub for Jews around the world. Israel 2020, however, acknowledges that the concept is not currently reflected in reality and that, if anything, there are two fundamental Jewish centres: Israel and the American Jewish community. At the same time, the plan predicts that by 2020, Israel will become the demographic gravity centre for Jews around the world but, in spite of this, it warns against any diminishment of the Jewish/Zionist character of the state for that would weaken the bonds between it and Jews elsewhere around the world.

Given the central importance it accords to human capital, the plan sets a number of goals related to this relationship. Firstly, Israel should ensure its ability to absorb future surges in immigration by preserving extensive land reserves and strengthening security. Second, it should work to preserve "Jewish collective memory" and protect and enhance the image of Israel as a centre for Jewish heritage in the Holy Land. Third, it should strengthen solidarity and cultural bonds between Jews. Fourth, it should strive to preserve economic prosperity within the framework of an environment-friendly quality of life, to strengthen democratic culture and to promote all the conditions that will make Israel an attractive centre for Jews around the world.

SCENARIO III -- ISRAEL IN AN ENVIRONMENT OF PEACE: This plan proceeds on the assumption that, by 2020, the Middle East conflict will have subsided on the basis of a two-state solution and that Israel will have established -- or will be on the verge of establishing -- normal political and economic relations with its neighbours. Although the scenario does not entirely rule out resurgence in animosity between the Arabs and Israel and, even, the possibility of a freeze in the existing peace treaties that Israel has with Egypt and Jordan, it nevertheless maintains that international pressures would be exerted on all parties to return to diplomatic routes to peace. It further predicts that Israeli and Arab consciousness will change as both peoples realise the benefits to be had from peace and the grave losses that accrue from the perpetuation of a state of conflict.

The state of peace would naturally have a major positive economic impact. It would permit for a reduction in military expenditures and encourage investments. Accordingly, the plan envisions major economic transformations in three focal areas. Under conditions of peace and the broadening of economic ties between the Israeli and Palestinian economies, there will emerge a kind of division of labour whereby Israel will specialise in high technology enterprises while Palestine would concentrate in more labour intensive sectors. At a second level, the plan does not foresee a huge surge in demand for the technologically advanced products of the Israeli economy. Indeed, it fears that Arab capital may continue to be reluctant to enter direct contractual relations with its Israeli counterpart. Meanwhile, Israel could sustain heavy political and economic risks from regional economic cooperation. These could arise from several diverse factors, such as tensions arising from Arab fears of Israeli economic hegemony, the impact of the influx of inexpensive Arab labour on the local labour market, and upon the more disadvantaged working classes such as Arab Israelis, and certain demographic "dangers" that would arise with the influx of outside Arab labour and intermarriage in Israel.

However, the plan foresees another serious demographic impact from peace: a population boom. Under a continued state of conflict, some 11 million people would be living in the space defined by mandate Palestine (present day Israel, the West Bank and Gaza). With peace, on the other hand, that figure could rise to 13 million as a result of the state's encouragement of Jewish immigration to Israel and the return of Palestinian refugees to the newly created Palestinian state.

Other adverse consequences of peace, according to the plan, would be the dissolution of Israeli identity into global culture and, consequently, the weakening of the bonds of Jewish culture and a decline in Israel's centrality in the network of its relations with Jews around the world. The plan describes this prospect as a kind of existential threat to the state that would be very difficult to confront. Another fragmenting force would be growing class disparities and the prospect of rising social tensions along class divides.

As regards the relations between Jews and Arabs in Israel, the architects of Israel 2020 foresee two possible prospects. On the one hand, relations could improve if efforts are made to expand the realm of equal citizenship between Arab and Jewish citizens of the state. Conversely, the alienation of Arabs in Israel would fuel separatist demands and more adamant solidarity with the causes of the emerging Palestinian state.

On the environmental impact of peace, the scenario anticipates the development of areas bordering Israel's neighbours. This carries with it the risk of disputes over cross-border environmental damage and an intensification of competition over natural resources. With peace, too, Israel will have to come to terms with its small size and acknowledge the finite dimensions of its land and water resources, a factor that should strongly influence its development choices in all fields.

With peace, the plan observes, "Israel will no longer function as an island in a hostile environment." It is likely, therefore, that with its modern services and technologies the country will become a regional business hub. The plan urges that the proper precautions be taken to avert whatever adverse effects might accompany this transition.

On the whole, the plan concludes that as important as the peace scenario is, prospective economic cooperation with Arab countries would yield only a marginal return for the Israeli economy in view of the relative weakness of the economies in Israel's Arab neighbourhood. Israel has a GDP of $100 billion and a $30 billion balance of trade. Its illiteracy rate is under three per cent. It has sectorial specialisation built on technologically advanced industries and a highly developed and sophisticated infrastructure, and service industries. It is on this basis that Israelis claim that the Arab economy could not compete with the Israeli economy and could, at best, serve to supplement the Israeli economy, especially in intensive labour sectors that do not require highly skilled manpower.

Such deductions on the part of Israeli planners pose a grave challenge to Egypt and the Arabs. Their response should be to do all in their power to prove in practical terms that they will not allow Israel to turn its military hegemony in times of conflict to economic hegemony in times of peace.

At closer inspection, Israel 2020 was not addressed to the Arab countries in Israel's regional environment. It was designed primarily to enhance and develop Israel's economic relations with industrialised nations and, specifically, with the aims of attracting more foreign investment to Israel, expanding its export and import markets, and penetrating new markets in Asia (China, India and Indonesia) and in Eastern Europe. Another central idea of the plan is to poise Israel for developing into a headquarters for the regional bureaus of foreign and international companies engaged in the Middle East, and a hub for globalisation coming from the West to the East.

ISRAEL 2028: This plan was completed in March 2008 and entered onto the agenda of the Israeli government in May that year. Eli Hurvitz, an Israeli industrialist and president of the Israeli Manufacturers Association, brought together a large collection of diversely specialised academicians and experts to prepare this "vision and strategy for the Israeli economy and society in a global world". The project was sponsored and financially supported by the US-Israeli Science and Technology Commission and Foundation.

Equally, if not more ambitious than Israel 2020, Israel 2028 aspires to achieve such national objectives as rapid, balanced growth and a reduction of social gaps with the aim of positioning Israel among the 10-15 leading countries in terms of economic achievement and quality of life over the next two decades. The plan focuses essentially on extending and deepening Israeli-US cooperation towards the realisation of that rapid growth, and ensuring Israel's assimilation into the global economy. It is against this general background that the project considered in depth 10 subjects: Israel and globalisation, economy and society, science and technology, government and public administration, the labour market in Israel and the industrialised world, primary and university education, scientific research, and infrastructure and conventional industries.

Also like Israel 2020, this plan proceeds from the affirmation of an organic link between the realisation of its ambitions and the realisation of peace, stability and calm in the Middle East. It states: "Achieving sustainable peace will change the perspective by which we view the development of the national economy and will considerably ease the achievement of social and economic objectives. Conversely, all-out war will impede their achievement."

One cannot help here but to remark on the fundamental contradiction between the plan's assumptions and current political realities in Israel that clearly point to the mounting influence and political control of the Zionist and Orthodox Jewish ultra-right. The dominance of these forces over the Knesset and Israeli government, especially in light of the steady erosion of the Israeli left, is certain to continue to obstruct any trend towards a peaceful settlement to the Arab-Israeli conflict. The architects of the plan clearly evaded this contradiction and its implications on prospective developments and the shape of the Israeli socio-political map during the map's designated timeframe. Instead, they focussed on the functional -- as opposed to the political -- aspect of government. Specifically, the report spoke of the need to address "the long process of erosion that has affected government and public sector functioning and efficiency" in various areas of decision-making and implementation processes.

As the authors noted, this deterioration has given rise to a widespread debate in Israel on the structure of its system of government. One of the most frequently advocated ideas is to change from the parliamentary to the presidential system and to modify the electoral system from one entirely dependent on the proportional list system to a mixture between this system and individual candidacies with a concomitant redrawing of electoral zones. Another noteworthy suggestion under debate was that which advocated raising the qualifying threshold to enter elections, thereby minimising backroom haggling and blackmail that have enabled fringe parties to exert a disproportional influence on Israeli politics.

Meanwhile, other issues, such as the Civil Marriage Bill jointly sponsored by Kadima and Yisrael Beiteinu and which conservative religious parties vehemently oppose, suggest a deepening religious-secular rift in Israeli society. Such trends together with changes in the system of government would naturally have an impact on other social and economic domains and possibly work counter to the predictions of the authors of Israel 2028.

If the plan avoided actively participating in debate over the shape of the Israeli electoral system and government, it did directly address other possible obstacles to its ambition to position Israel among the world's top economic achievers. Of foremost concern was the need to address the distortion in the Israeli economy arising from the imbalance between rapid growth high-tech industries, in which Israel boasts relative superiority, and traditional or mixed- traditional technology industries and service sectors that, in the opinion of the plan, could not compete in the international market and assimilate into the global economy. It further maintained that this economic imbalance has led to steadily broadening income disparities in society and Israel's consequent downward slide on the social equality scale. It cautions that the longer this trend persists the greater the risks of social instability and rifts in a social fabric that is already fragile because of such social dichotomies as Sephardim versus Ashkenazim, secularists versus orthodox, Jews versus Arabs, traditional Zionists versus post-Zionists, and the global culture of younger generations.

In all events, the image of Israel a decade or two from now will not solely be determined by the visions of strategic planners. As important as planning is to economic development in particular, Israel's future will be determined by factors no less important than economic ones. Indeed, Israel's handling of the peace process, other political and social developments, demographic factors, the state of the global economy and the rapid emergence of new economic powers may all prove, in their own ways, more forceful determinants of the shape of Israel in 2028.

* Director of the Middle East forum.

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