Monday, July 30, 2007
SOS: Palestine's Private Sector
by Sam Bahour and Iyad Joudeh
July 30, 2007
The Gaza Strip and West Bank, including East Jerusalem, are Israeli occupied lands that have brought despair to all involved. The most recent chapter in this historic saga was the overrunning of Gaza by Hamas militants. As the world contemplates how to deal with this latest episode, one thing is for sure, June 2007 will go down in history as a turning point in the Palestinian Israeli conflict. Understanding whether this turning point will bring about a serious improvement toward real stability in the region can only be determined if a serious shift takes place in how donors deal with supporting Palestinians and how the international community deals with continued Israeli constraints to Palestinian development. Center stage in this analysis should be the Palestinian private sector which is the only place where sustainable development can be realized. As such, an integral part of every donor intervention should include support to the Palestinian private sector.
Britain’s outgoing prime minister, Tony Blair, wasted no time in landing his next job – special envoy for what’s called the Middle East Quartet, a group made up of the U.S., Russia, the European Union and the United Nations. He could not have picked a larger challenge or a more volatile conflict at a more sensitive time. Fresh in everyone’s minds is the failure of the last person who held the job, former World Bank President James Wolfensohn. Wolfensohn was a person of international stature, untainted by the Iraq war fiasco, a practical hands-on person, who entered the conflict on an evangelical-like mission to break the historic stalemate in the status quo and get things moving toward reviving the Palestinian economy. It took Israel merely one year to frustrate and marginalize Wolfensohn, which led to his resignation in humiliation. Blair’s path forward is definitely uphill, but windows of opportunities may be pried open if a new approach is taken, an approach based on sustainability and not only subsistence for Palestinians.
Ever since the Israeli military occupation of the West Bank and Gaza Strip over 40 years ago, Israel systematically linked the occupied territory’s economy to its own. Before the Oslo Peace Accords, this forced linkage was most apparent in Israel’s restriction of Palestinian business and its controlling the freedom of movement for Palestinian labor. For nearly a decade prior to Oslo, Israel issued work permits to tens of thousands of Palestinian workers to allow them to enter Israel to find work. Palestinian labor was found in Israeli construction, agriculture, hotels and the like. Dealt with as a second class labor force, Palestinian laborers were exposed to working conditions that allowed Israeli businesses to benefit from offering lower wages without having to stringently apply Israeli Labor Law. Many Palestinians workers even found themselves building the illegal Israeli settlements that were threatening the existence of Palestinian communities. For Palestinians, being able to work, anywhere, while under Israeli occupation, was a matter of survival.
The Israeli occupation authorities also levied taxes on the occupied people and used a portion of those taxes to flood the Palestinian areas with Israeli made infrastructure and goods. This created further Palestinian dependence on the occupier’s economy.
Contrary to the obligations embedded in the Fourth Geneva Convention of 1949, the signatories of this key Convention -- the U.S., UK and Russia (previously the USSR) included -- allowed for Israel, the occupying force, to create a structural economic dependency of the Palestinian economy while at the same time applying a maze of restrictions on Palestinian ability to become economically viable. Instead of demanding from Israel the application of international law, these countries, and others, continued reporting, year after year, the Israeli violations of international law while simultaneously footing most of the costs of occupation.
When the Oslo Peace Accords were signed in 1993, an economic arrangement followed called the Paris Economic Protocol. Just as the Oslo agreement itself kept intact the ultimate Israeli control over all key aspects of Palestinian life, the Paris Economic Protocol institutionalized the occupier’s economic interest in this bilateral agreement with the Palestinians.
After the Oslo agreements, state donor’s role in funding Palestinians’ “development” turned into an international underwriting of the Israeli occupation, reducing, and many times removing, the financial costs of military occupation from Israel. In short, knowingly or not, donor funding had an accomplice-type role in allowing the situation to reach where it is today.
For the most part, the Palestinian private sector is a recent phenomenon. From 1967 until the Oslo agreements the business community was nascent and deeply connected with Israeli suppliers, the only suppliers Israel would allow to have direct contact with the Palestinian community. The number of private Palestinian companies was low and the depth of know- how was shallow. Export-focused thinking was non-existent given Israeli restrictions and constraints. Nevertheless, the seeds of the locally grown private sector, which was able to maintain itself while the entire world was turning a blind eye, became the foundation on which the Palestinian business community was built.
With the advent of the Oslo Peace Accords the Palestinian private sector took on a new dynamic, one that was much more complex. A handful of investment firms were established that facilitated a flow of capital into the economy. With the newly created hope that the Oslo process was going to result in the end of Israeli military occupation, many Palestinians came to Palestine to work, which injected in the market new skills and expertise. This new professional class was global in scope and diverse in know-how, since their skills came from all four corners of the world, where the Palestinian Diaspora is scattered.
As new private sector firms started to be established –the first Palestinian telecommunications company, new hotels, and an information technology sector – Palestinian students began focusing on the new skill sets needed to be absorbed in the labor market. The Palestinian economy, although tiny, was a rapidly shifting economy, moving from traditional practices to modern ones, from an agricultural base to a service sector and export-orientated one.
As firms started to realize that they had common interests and concerns, especially with regards to dealing with the newly formed Palestinian Authority as well as the continued Israeli structural constraints that were still being applied, trade associations started to be formed. The majority of these associations were created in a dynamic that merged existing sector players and know-how with the newcomers that came from a different vantage point to economic development. Yet other associations brought firms and people together for the first time to establish brand new sectors in Palestine, such as the Palestinian Information Technology Association. All of this redefined the Palestinian focus on economic development and enriched the engagement of these sectors with the local environment and the dynamic of donor interventions which were driving the bulk of business activity.
Although donor money was the gas allowing the Palestinian economy to chug along, at no time did donors view the development of the private sector as the highest priority in building a viable Palestinian society. Donors assisted in the creation of sector associations and provided firm level assistance to some extent, but a strategic approach to the private sector never materialized. Many in the international community were quick to criticize the growing number of the Palestinian public sector workers, but few, if any, had the foresight to see that a strong Palestinian private sector was the only way to provide an alternative to public employment.
The international community collectively and closely followed the Israeli adoption of a policy of separation, which was publicly declared in a speech by past Israeli Prime Minister Ariel Sharon made in a conference at the Herzliya Conference in December 18, 2003. Then Prime Minister Sharon said: “If there is no progress toward peace in a matter of months, then Israel will initiate the unilateral security step to disengage from the Palestinians.” This unilateral separation policy immediately materialized in a drastic reduction of Palestinian labor allowed into Israel, from more than 160,000 in the early 1990’s to nearly 20,000 in 2003. Israeli officials also publicly announced that they intended to reduce the number of Palestinian workers allowed into Israel to zero by 2008. While the most visible indication that Israel was strategically changing gears was the acceleration in the building of the Separation Barrier on West Bank lands, there are realistic expectations that the separation concept will soon materialize in many other areas such as health, trade, banking services, telecommunications, transportation and many others. With the absence of any strategic alternatives, the unilateral Israeli implementation of separation can only lead to total collapse of the nascent, but already exhausted, Palestinian private sector.
All the while Israel was bulldozing forward, the Palestinian private sector buckled down and took the brunt of the Israeli pounding of the Palestinian community. Being, for the most part, dealt out of the developmental paradigm, the Palestinian private sector was left on its own to deal with the Israeli effort to force Palestinian society to its knees. After being structurally linked to the Israeli market for decades, Israel’s decision to unilaterally separate, or ‘disengage’ as it was called, from the Palestinians came at a time of utmost instability. The elimination of Palestinian labor that was employed in Israel increased the unemployment rate in the West Bank and Gaza overnight. The Separation Wall’s land grab separated farmers from their lands, causing strains of enormous magnitude on Palestinian agriculture. The Israeli military and political actions to weaken the nascent Palestinian central ‘government’ left the economy in a free fall. With security and economic conditions becoming intolerable, Palestinian emigration, or desire thereof, peaked. Palestinians held elections in hopes of getting things back on track. As a reply to the election results, Israel installed a policy of denying entry to foreign nationals, Palestinians and otherwise, which forced many skilled workers out of the country and stuck a severe blow to the education sector, which employed many foreign nationals. The list of Israeli actions to weaken Palestinian society goes on and on but all with a clear purpose: to stunt Palestinian development and prohibit Palestinian steadfastness, economic or otherwise.
Now, after the events in the Gaza Strip last month, we hope the international community has understood a key lesson: that the Palestinian private sector’s role in sustainable development is not a side show, but rather the only concrete platform that can create a viable Palestinian society. On average, donors annually injected $350-450 million into the Palestinian Authority from 1994-2000. From 2001-2007, the amount averaged about $650 million annually. This amounts to over $7 billion, more per capita than anyplace in the world except for Israel, which is heavily subsidized by the U.S. Of those funds, less than 5% were invested in private sector development. Even with this meager donor support, the private sector has proved its stamina and resilience in the face of crisis. Palestinian private sector achievements may be found in every sector and many seeds of a stable economy have been planted, but now need nurtured. Productive economic sectors have been organized, firms are now experts in crisis management, and a greater understanding of the limitations of economic growth while yet under Israeli occupation has been internalized.
The word “viable” has been used and abused in trying to define what a Palestinian state should be. Even President Bush’s new found interest in realizing a Palestinian state comes with the requirement for it to be “viable.” What does “viable” mean to Palestine? The viability of any future Palestinian state must come within the context of a sustainable private sector, one that can create sustainable job opportunities, develop competitive products and services for the local market first, and an export market as well. The Palestinian private sector must be able to absorb Palestinian university graduates and by establishing a knowledge-based thrust in our economy while also absorbing the tens of thousands of construction workers that Israel abruptly pushed into unemployment after forcing them to be linked to the Israeli economy for decades.
Viable development must be seen through different lenses than that of relief. On December 7, 2006 twelve UN agencies together with 14 NGOs operating in the occupied Palestinian territory launched an emergency Appeal for $453.6 million to help meet increasing Palestinian humanitarian needs in 2007. This is the largest appeal for emergency humanitarian assistance ever launched in occupied Palestinian territory and the third largest in the world. The backdrop of this appeal was summed up by Kevin Kennedy, the UN’s Jerusalem-based Humanitarian Coordinator who said, “Two-thirds of Palestinians in the West Bank and the Gaza Strip are now living in poverty. Growing numbers of people are unable to cover their daily food needs and agencies report that basic services such as health care and education are deteriorating and set to worsen much further.” This was all before last month’s events in Gaza, which are only exacerbating the humanitarian crisis.
With no political horizon with the Israelis, and after suffering the shock, and bleak aftermath, of recent events in Gaza, the private sector in Gaza must not be forgotten at this crucial moment. Gisha, an Israeli Legal Center for Freedom of Movement, just released shocking data about Gaza’s economy, post-Hamas overrun. They state that:
“75% of Gaza's factories have shut down because of the closure of the borders. The rest of the factories are operating on a limited basis, on borrowed time, until the stocks of raw materials are exhausted.
85% of Gaza residents are already dependent on food aid – and the number is growing.
There is a serious shortage of raw materials, including flour and sugar for household and industrial consumption, and prices of raw materials have risen between 15% and 34%.
Approximately 30,000 factory workers stand to lose their jobs (factory employees constitute 10% of those working in Gaza, and on average, each worker supports a family of seven. In Gaza, unemployment stands at 35%);
Israel erased from its computers the customs code used to identify goods entering Gaza and issued orders not to allow any imports into Gaza, with the exception of humanitarian goods, such as donations of food, medicine and medical equipment.”
Gisha concludes, “This policy is destroying the business sector, creating a new welfare regime in Gaza, and turning growing numbers of Gaza residents into dependents on international welfare agencies and religious charities. As of today, 87% of Gaza residents live below the poverty line. The opportunity to earn a living with dignity and to build a properly-functioning society is disappearing. According to the chairman of Israel's Association of Industrialists, Shraga Brosh, "the economic boycott on the Gaza Strip …will result in a humanitarian disaster, fueling flames and leading to deterioration of the security situation – a situation that will be destructive to the Israeli economy.”
The situation is volatile. Internal Palestinian politics are being put in the limelight as if the continued Israeli military occupation is an innocent bystander in creating the conditions for the Palestinian social collapse. The donor community has a historic responsibility to Palestinians, especially after so many years of observing the Israeli occupation from afar and a decade of footing the bill as Israeli actions continue unabated. The challenge to donors today is to convert assistance to the Palestinians to sustainable assistance, equal in priority to relief and humanitarian assistance, but sustainable in a way that creates an enabling environment allowing the private sector to assume its natural role of becoming the foundation of a future state.
- The writers are Sam Bahour (email@example.com) and Iyad Joudeh (firstname.lastname@example.org), Managing Partners of Applied Information Management and Solutions for Development Consulting, respectively, and based in Ramallah.
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Thursday, July 19, 2007
Last update - 18:31 19/07/2007
'All the dreams we had are now gone'
By Shahar Smooha / Photo by Tomer Appelbaum / BauBau
NEW YORK - Even on a steaming hot day such as descended on New York last Monday, the Middle East looks very far away from the office of James D. Wolfensohn, 29 stories above Sixth Avenue in Manhattan. Construction staff in work boots, wearing hip- hugging tool belts, are still working industriously to complete the renovations - Wolfensohn is renting the entire floor. That will happen very soon, at which time Wolfensohn, 73, who was president of the World Bank for 10 years (1995-2005) and then spent 11 months as the Middle East envoy of the Quartet (the United States, Russia, the European Union and the United Nations), will launch his new adventure. His sons are now working to raise $500 million to develop alternative fuel sources, and he will head up the vast new fund.
Wolfensohn's period in the Middle East has left its mark on him. He may have left Israel and the Palestinian territories at the end of April 2006, but Israel and the territories have not yet left him. Which is understandable.
An Australian-born American Jew, Wolfensohn arrived in the region three months before the Israeli withdrawal from the Gaza Strip, brimming with good intentions. His decade as head of the World Bank, his relaxed temperament and his intimate acquaintance with the leaders of the Quartet made him an ideal candidate for the post of special envoy. His father, who served with the Jewish Battalions in World War I, planted emotional ties to Zionism and the region in his heart.
Wolfensohn landed in the Middle East in May 2005 in order to monitor the Israeli disengagement from Gaza and to help heal the badly ailing Palestinian economy. In the beginning he was full of hope: He was able to raise $9 billion ($3 billion a year for three years) to bolster the Palestinian economy, and in November 2005, three months after the disengagement, he served as the mediator between Israel and the Palestinian Authority in negotiations on transit routes and on access to and from the Gaza Strip. He also donated money of his own to help the Palestinians buy Israeli-owned greenhouses in Gaza.
However, the departure of Ariel Sharon from the political arena in January 2006, the fact that Wolfensohn's efforts were constantly undermined by none other than the U.S. administration, and the rise of Hamas to power combined to derail his mission. At the end of April 2006, fed up with both the Israelis and the Palestinians, and after understanding that he would not get backing from the Quartet, he decided to pack it in. He returned to the United States, where he divides his time between Manhattan and Jackson Hole, Wyoming, and tried to leave the failed mission behind him.
For more than a year, Wolfensohn kept his feelings about his year in the Middle East to himself. He watched, appalled, as the disengagement plan failed and as violence continued to rage in the region. It was only after the recent takeover of the Gaza Strip by Hamas and the appointment of former British prime minister Tony Blair to the post he held that Wolfensohn agreed to speak on the record. Indeed, the impression is that he considers it his duty to do so.
Even before he is asked about his reaction to Blair's appointment as the Quartet's emissary, Wolfensohn opens the conversation with something of a self-justification: "I don't think that when negotiations are going on at various different levels - and I'm reasonably well informed about what's going on - that intervention by a third party really adds much."
The current situation in the Middle East leaves him in despair. "I think it was certainly easier in that glowing moment when there appeared to be an agreement that would give hope to the Palestinians and security to the Israelis - and you need to have both. You need to have a secure Israel, which is very clear, and you need to have a Palestinian community that feels it can have hope. The polls show that Israelis and Palestinians have such a balance - they'd like to come to a deal on borders, they'd like to reach a situation in which each can get on with their lives and live side by side for centuries. I think the average person, whether it be Hamas or Fatah, or religious or not religious, would love to settle down and live.
"I think that there was a framework for that in the agreement that Condi [Condoleezza] Rice announced in my presence and in the presence of the European representative Javier Solana," Wolfensohn continues. "But in the months following, every aspect of the agreement was abrogated. In fact, the sadness of it is that the last remaining aspect - the opening to Egypt [via the border crossing] - has seen the international observers reducing their representation because of non-usage [of the terminal]. So all the dreams that we had then have now gone, and beyond that you now have an elected Hamas government and a split with Fatah and [PA Chairman] Abu Mazen, with a new prime minister, and you've got Hamas in Gaza. So we have an added difficulty in that we don't have two parties now, we have three. And one with whom neither of the other two wishes to deal."
However, in Wolfensohn's view, none of the sides can allow itself to observe from afar the new reality that has emerged in the region and to wait for it to change. "The reality is that you have 1.4 million Palestinians living in Gaza and you can't wish them away, you can't leave Gaza as a place where the rich and the intellectuals and the powerful can get out, and leave just the people who can't make a living - or can make a living if they could, but have no leadership. And military use or subjugation doesn't solve the problem, it seems to me."
It is Wolfensohn's view that "in the interest of Israel, in the interest of the Palestinians, there is a need to get things back to a situation where there is representation of all the Palestinian people in an entity that can deal with Israel to bring about, if Israel wishes, a two-state solution, which appears to be a thing Secretary [of State] Rice is now committed to." The situation, he says, cannot simply "be allowed to lie there, because just pretending that 1.4 million people can live in a sort of prison is not a solution at all. So I think it's going to require, on the part of Tony Blair or someone, some real negotiations to try and get this started."
Asked about another possible way out of the deadlock - with Israel taking the initiative and exerting pressure on the Palestinian population to rid itself of the Hamas leadership, or assassinating the organization's leaders in order to pave the way for Fatah to take control again - Wolfensohn shrugs his shoulders. "I'm not at all sure that Israel can determine what happens in Palestine, the Palestinian territories. There's been no evidence up to now that a decision taken by the Israelis will determine what the Palestinians do. I don't think personally that a military solution is a solution," he says dryly.
Wolfensohn sounds hurt and disappointed as he describes the slide into violence after the disengagement from Gaza. "Part of the reason it happened, in my view, is that the conditions in Gaza deteriorated so terribly," he explains. "If you recall, in the time of the withdrawal there was a day or two of people looting, but within 48 hours it was under control. Things were peaceful in Gaza, and this was not because of a military presence of the Israelis. It was because the Palestinians recognized that if they want to have any hope, they need to be in a more peaceful mode."
He toured the Gaza Strip with Palestinian Authority Chairman Mahmoud Abbas (Abu Mazen) immediately after the PA asserted its authority there, and recalls a euphoric atmosphere that dissipated very quickly.
"I remember seeing the greenhouses with the chairman and looking at the fruits and everything, and there was a joyous atmosphere: 'Boy, we're about to get this going and we're going to have hotels by the beaches and we're going to have tourism and it's going to be fantastic, and the Palestinians really know how to be hosts.' But in the months afterward, first of all Arik [Sharon] became ill and the current prime minister came in, and there was a clear change of view."
At that time, Wolfensohn recalls, powerful forces in the U.S. administration worked behind his back: They did not believe in the border terminals agreement and wanted to undermine his status as the Quartet's emissary. The official behind this development, he says, was Elliot Abrams, the neoconservative who was appointed deputy national security adviser in charge of disseminating democracy in the Middle East - "and every aspect of that agreement was abrogated."
The non-implementation of the agreement naturally had serious economic consequences. According to Wolfensohn, the shattering of the great hope of normality, which the Palestinians experienced so deeply when the Israel Defense Forces and the settlers left the Gaza Strip, brought about the rise of Hamas. "Instead of hope, the Palestinians saw that they were put back in prison. And with 50 percent unemployment, you would have conflict. This is not just a Palestinian issue. If you have 50 percent of your people with no work, chances are they will become annoyed. So it's not, in my opinion, that Palestinians are so terrible; it is that they were in a situation where a modulation of views between one and the other became impossible.
"And you can blame the Palestinians because there were those among them who were firing rockets or you can blame the Israelis for overreacting," he continues. "But either way - whichever side you take - the situation that emerged was that you had 50 percent of the population frustrated, no resources, and a border which was corrupt on both sides. I saw it with my own eyes: Israelis and Palestinians, arm in arm, walking off together and clearly pricing how you could get your truck to the top of the line or get it through at all. It was an absolutely transparently corrupt system at the border - you had to buy your truck's way across. I thought it was a disgrace."
The issue of the greenhouses is especially painful to Wolfensohn because of his personal contribution to them. "Everything was rotting because you couldn't get the fruit. And if you went to the border, as I did many times, and saw tomatoes and fruit just being dumped on the side of the road, you would have to say that if you were a Palestinian farmer you'd be pretty upset. So my view is to try and not demonize the Palestinians. I'm not denying that there are Palestinians who fire rockets and do terrible things; I know that that happens. But to get a fundamental solution, you have to have hope on both sides."
Wolfensohn is not naive. He knows that the Hamas election victory in January 2006 did not derive only from the collapse of the border-crossings agreement after the disengagement, but also from the years-long corruption of the Fatah leadership. He says he cautioned Fatah representatives with whom he was in contact about this danger, but they ignored him.
"Fatah wasn't that popular at the time. A lot of people thought that the Fatah leadership was overpaid. The Palestinians, at least, did. They thought they had a dishonest leadership - not, I think, at the level of Abu Mazen, but at a ministerial level. They felt that there was an elite class that was taking advantage of the situation, and that the only way they could get some improvement was by electing a group that, at least at the time, was perceived as straightforward. My own opinion is that the decision to move to Hamas was partly ideological, but partly because of the failure of the Fatah leadership. I know that to be the case and so does everybody who was there." Wolfensohn had discussions with the Fatah leadership, he says, "but at the time they were pretty self-confident. If you look at [Mohammed] Dahlan, the people who were there, the informal leaders - there wasn't a lot of talk about Hamas ousting them."
Didn't they think it was a problem for them to drive their shiny Mercedes through refugee camps?
Wolfensohn: "I thought it was and said so many times. It's not only that, it's also the building of the big houses, the private armies. They said their polls showed that they'd win. What can you do? I'm an outsider. For any outsider there's a level to which you cannot penetrate."
Even though Wolfensohn identified the danger already then - in contrast to many observers and commentators, who see America's insistence on holding democratic elections in the PA as the factor that enabled Hamas to become so strong - he does not view this as a mistake. "I think that's a very hard question to answer, because although it's pretty clear that the tide had turned in terms of support for Hamas, there had been a promise of elections. I think probably that I, too, would have taken the position to press on, in the hope that the outcome might have been different."
Surprised by Bush
James Wolfensohn was born in Sydney, Australia in 1933. He is a graduate of the faculty of law of the University of Sydney, was the captain of the Australian fencing team at the 1956 Olympic Games in Melbourne, and served as an officer in the Royal Australian Air Force. After the Olympics he entered Harvard Business School, emerging with an MBA. He was then employed briefly by the Swiss-based cement company Holderbank (now Holcim), before returning to Australia and working in a number of banking firms, specializing in investments.
His principal employer in this period was the investment bank J. Henry Schroders. He served as a senior executive in the institution's London headquarters before becoming the managing director of its New York branch, a post he held from 1970 until 1976. Afterward Wolfensohn held a senior position with Salomon Brothers, the Wall Street investment bank.
In the 1970s, he became friends with the cellist Jacqueline du Pre and began to study the instrument with her when he was 41. He continues to take this hobby seriously and performs on various occasions. Wolfensohn says that if peace is ever attained between Israel and the Palestinians, he has an agreement in principle with Ehud Barak ("I like Ehud Barak, but that's largely because he's a pianist") and with a Palestinian violinist to give a joint concert.
Wolfensohn became an American citizen in 1980 and was already then considered a candidate to head the World Bank, after the tenure of Robert McNamara. When this did not happen, he established an investment firm bearing his name, and devoted much of his time to philanthropic activity. Among other public service activities, he was chairman of Carnegie Hall in New York and of the John F. Kennedy Center for the Performing Arts in Washington.
In 1995, he was nominated by then-U.S. president Bill Clinton to be president of the World Bank, and won the unreserved support of the bank's board. His term was unanimously extended for another five years in 2005, making him the third person to hold the presidency for two consecutive terms (after Eugene Black and McNamara). During his term of office, Wolfensohn placed the emphasis on changing the institution's organizational culture, focusing attention not only on making loans, but also on creating economic growth in the Third World and reducing the rate of poverty throughout the world. He was surprised, he says, that President George Bush let him continue as president of the World Bank, instead of appointing one of his people to the post.
"No Democratic appointee kept his job, and he wanted to put in [Paul] Wolfowitz, so it was clear to me that I couldn't stay a day longer at the World Bank," he reveals. "It was very clear that it wasn't personal. It was practice. But they then asked me if I'd take on this other term, which was hugely unusual and I have no I idea why it happened. I was very surprised, and delighted."
According to James Wolfensohn, the major blame for the failure of his Middle East mission lies with him. "I feel that if anything, I was stupid for not reading the small print," he admits. "I was never given the mandate to negotiate the peace." The mandate he received, he says - which is identical to the one Tony Blair has now been given - was solely to try to improve the economic situation in the territories and to improve the Palestinians' situation in general, whereas he naively thought that this included intervention to advance peace.
"To be quite honest with you, I was so anxious to try to help. I was getting out of the World Bank, and I thought, you know, this is a good place to start. I was full of ideas and good intent, and everybody would see me and they would all discuss the peace process with me. I was given enough rope so that I could go to the G7 [meetings of finance ministers from seven industrialized nations] and see any leader that I wanted, and when I got out of the bank I just continued, not because of the need to see them, but because I thought this job was pretty good, because I was really helping to do something that I was keenly interested in."
In 2005, Wolfensohn's access to the G7 leaders may have made it easier for him to extract from them a commitment for a $9-billion package to ameliorate the situation of the Palestinian economy. However, he says, afterward Condoleezza Rice and Elliot Abrams made it very clear to him that intervention in peace negotiations was not within his purview. "I had to fight my way into the November  meeting when Secretary Rice announced the six-point plan. I was there with Javier Solana when it was announced, and what I didn't realize was that that was the death penalty, because after that the Israelis and the Americans took apart that agreement one by one, and I knew less and less what was happening. And my team of 18 people was fired. So I was left with no office and no people, and even though they asked me to stay on, it was pretty clear to me that the only thing to do was to get out."
Asked whether the disengagement plan was not one big mistake, because of its unilateral character and because Israel has been attacked relentlessly from the Gaza Strip since its implementation, Wolfensohn waxes nostalgic for Ariel Sharon. "I don't think it was a mistake, if it had been followed by the second part of the disengagement - to create a self-sustaining entity that could be the first step to Palestinian statehood that could allow the Palestinians to live their lives and develop a sense of national integrity. That was an opportunity that was missed, and at the heart of it was Arik [Sharon]. He was an unlikely negotiator of peace because of his record, but I have to say that personally I found him very pragmatic. I can't say that he was fond of Palestinians, but he knew that for the future, you couldn't have an Israel full of Palestinians. That demographic imperative made it essential that there would be some kind of two-state solution."
Sharon, Wolfensohn continues, "was hugely suspicious of me, as he was of the Quartet, but in the end he accepted me and I think I knew what was in his mind. I think he saw the Gaza withdrawal as a very positive thing. When Condi [Rice] came over for those meetings in November , he and I at that stage were becoming pretty good friends. He got up from the table where he was sitting with Condi - and that's something he never did - came across to my table and gave me a hug. He was prime minister, so it was for me to [rise to] greet him, but he did it in a very obvious way. I think personally that he had the strength and the standing, and in my opinion the determination to move through with the two-state solution.
"I don't blame [Prime Minister Ehud] Olmert. He doesn't have the strength or the leadership that Arik had. Arik, as you remember, confronted the nation and said, 'If you want to attack someone, attack me.' Ehud [Olmert] has not had the standing and his popularity is quite low," Wolfensohn adds, smiling.
"I have no doubts that I may have made tactical, strategic mistakes, but the basic problem was that I didn't have the authority. The Quartet had the authority, and within the Quartet it was the Americans who had the authority. It was not a Quartet decision to close the office," he explains, in a very unsubtle hint. "There was never a desire on the part of the Americans to give up control of the negotiations, and I would doubt that in the eyes of Elliot Abrams and the State Department team, I was ever anything but a nuisance."
Not such a big deal
Wolfensohn is convinced that he was also perceived as a nuisance by Olmert and by Dov Weissglas, Sharon's close adviser, who stayed on in the initial period after Sharon was incapacitated by a stroke. Wolfensohn feels that he may have been able to wield influence in matters of little importance, but that he did not have access to the real decision makers after Sharon's departure. "I was mature enough to understand that at the main gate, I had no position," he says.
"My worry for Tony Blair is that if you read the mandate he has - it's exactly the same as mine. It talks about helping both sides, helping the Palestinians, but there's nothing there about negotiating peace. I would only hope that there's a greater mandate given to him, because even with the superior standing that he has over the standing I had, if he doesn't have a mandate ... If halfway through the negotiations your office is closed and someone takes over the negotiations, you have to say you failed," Wolfensohn says, breaking into loud, bitter laughter.
Did you speak with Blair after his appointment?
"I have no comment on that."
How do you assess his chances?
"Better than mine were. He is closer to George Bush. He was prime minister. I do not believe there's much time. I think it is difficult. But we're fortunate to have somebody with experience."
Precisely because he views himself as an analyst who observes the global arena from a bird's-eye view, Wolfensohn is convinced that the Palestinians - and even more, the Israelis - cannot allow themselves to waste time. He also disputes the prevailing concept in the region, which holds that the Israeli-Palestinian conflict is central to the future of the world.
"In the end, both sides have to recognize that they are 11 million people in a sea of 350 million Arabs," Wolfensohn says, and goes on to illustrate the proportions numerically: "Over the last four years, the war in Israel and Palestine has cost the international community - including military expenditure - somewhere between $10 and $20 billion. The Iraq war has cost $600 billion. The Afghanistan war has cost between $50 billion and $100 billion. You have a nuclear threat in Iran, you have the issue of Syria and which way it goes, and you have a doubling of the Arab population in something like between 10 and 15 years. So instead of 350 million, there will be 700 million. Israel may grow from six million to eight million, if they're lucky, or nine million.
"There has to be a moment when Israelis and Palestinians understand that they are a sideshow," Wolfensohn continues. "The real global politics is the politics of war and the politics of nuclear weaponry and the weight of the population. In the Western press the Israeli-Palestinian conflict gets a lot of coverage, but you should see the press in the developing countries, as I did when I visited more than 140 countries: It's not such a big deal there. I don't see any way to argue that Israel's position is improving."
Wolfensohn carefully avoids giving a reply to the question of whether the continuation of the conflict and the worsening of Israel's situation are liable to produce a regime with apartheid characteristics. At the same time, he notes that Israel has for some time been suffering from a brain drain, and adds that when the country reaches junctures of major decisions, the strength of the security establishment always overcomes that of the civil forces in society.
"The expenses on military and intelligence in Israel are probably greater than in any democracy I know of, and I can understand that, given the situation, but as a continuing characteristic of the country, I don't think it's hopeful. To me it is so bloody sad that all the creativity you have in Israeli youth has to go through this experience in the army, risking their lives," Wolfensohn says, casting his gaze far beyond Central Park. "Israeli youth finish high school and spend two-three years in the army, and then go to Thailand and other places and smoke pot to get over it, then come back and start their lives when they're 24. I don't think that's an ideal way for the next generation of Israel to live their lives."
Did your mission in Israel change the way you perceive Zionism and Israel?
"No. I still believe in that. But Israelis and Palestinians really should get over thinking that they're a show on Broadway. They are a show in the Village, off-off-off-off Broadway. I hope I don't get into too much trouble for saying this, but what the hell, that's what I believe, and I'm 73." W
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Thursday, July 05, 2007
Declaration of Independence Day Edition
July 4, 2007
There is No Right to Occupy
The Declaration of Independence and the Right to Exist
By CARL G. ESTABROOK
The US/Israeli policy of divide-and-conquer, employed to destroy the democratic government of the Palestinian Authority, has included the claim that Hamas is unacceptable as a party in that government because it refuses to accept Israel's "right to exist."
Noam Chomsky said four years ago,
"In effect, the US and Israel are demanding that Palestinians not only recognize Israel in the normal fashion of interstate relations, but also formally accept the legitimacy of their expulsion from their own land. They cannot be expected to accept that, just as Mexico does not grant the US the 'right to exist' on half of Mexico's territory, gained by conquest ... I suspect that this demand was contrived to bar the possibility of a political settlement in accord with the international consensus that the US and Israel have rejected for thirty years ... Israel and a new Palestinian state should be accorded the rights of all states in the international system, no more, no less. That option will soon be excluded, if the US and Israel continue to carry out the development projects in the occupied territories in such a way as to render the Palestinian region a 'permanent neo-colonial dependency' -- the goal of the 'peace process,' according to Prime Minister Ehud Barak's chief negotiator."
As the United States celebrates with parades and fireworks the splendid rejection of colonial dependency by the Continental Congress (a far less democratic assembly than the Palestinian Authority) in July of 1776, we should recall that America as a political society is founded on the rejection of an occupying power's right to exist. The central argument of the Declaration of Independence is that a state may be said to have a right to exist only on one condition: "Governments are instituted ... to secure ... certain unalienable rights, [including] life, liberty and the pursuit of happiness."
Thomas Jefferson's text asserts that "Whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it." And, although we may tend to forget it, this principle has been reasserted in American history, even at surprising times. In his first inaugural address, Lincoln pointed out that a country belongs to the people who inhabit it. "Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it."
The Declaration of Independence is a renunciation of a state that, it was asserted, had forfeited its right to exist. It is a bill of particulars, meant to show how that forfeit had come about (and it can certainly be argued how well it makes the case). But the principle is clear -- a government has a right to exist, according to American doctrine, only when it works to "establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty" (in the words of the 1787 organic law of the Second Republic of the United States). If it does not work towards these things -- especially if it actively works against them -- it has no such right.
Given that Israel is the US government's principal client and its "local cop on the beat" in the Middle East (in the words of the Nixon administration), we must ask if the government of Israel satisfies this condition in regard to the people it rules over -- more than ten million between the Jordan River and the Mediterranean. The answer is obvious. Like the government of the former apartheid state of South Africa, it works in the interests of only a minority of those inhabitants -- and is destructive of the rights of the others -- so in neither case can the state be said to have a right to exist, according to the Declaration of Independence. (There's a further difficulty: all states, whether democracies or dictatorships, are the states of their inhabitants, as Lincoln noted -- except the state of Israel: by law, Israel declares itself the state not of its inhabitants but of the Jewish people world-wide.)
In US/Israeli propaganda on this issue, there is always a covert sliding about between the existence of a regime and the physical existence of a people. Only in the case of Israel are they equated, and not innocently. That is the point of the famous remark attributed to Israeli diplomat Abba Eban: "One of the chief tasks of any dialogue with the Gentile world is to prove that the distinction between anti-Semitism and anti-Zionism is not a distinction at all."
A recent example of this malign ambage is the purposeful mistranslation of the Iranian president's words, as described by Arash Norouzi in "Caught Red-Handed: Media Backtracks on Iran's 'Threat'":
For close to two years, the media has stubbornly clung to a long discredited story about the Iranian president's alleged threat to "destroy Israel" with nuclear weapons Iran doesn't have and denies any intent to acquire. "Wiped off the map, wiped off the map," they bleat incessantly, even though his actual words, "The Imam [Khomenei] said this regime occupying Jerusalem must vanish from the page of time," were paralleled with the fall of regimes like the Soviet Union and Iran's former U.S.-installed monarchy...
The Fourth of July is an appropriate time for us to recall that the United States is founded on the principle that no regime has a right to exist.
Carl Estabrook a retired visiting professor at the University of Illinois and host of the weekly radio program "News from Neptune". He can be reached at email@example.com.
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Wednesday, July 04, 2007
Published on Monday, July 2, 2007 by TruthDig.com
A Declaration of Independence from Israel
by Chris Hedges
Israel, without the United States, would probably not exist. The country came perilously close to extinction during the October 1973 war when Egypt, trained and backed by the Soviet Union, crossed the Suez and the Syrians poured in over the Golan Heights. Huge American military transport planes came to the rescue. They began landing every half-hour to refit the battered Israeli army, which had lost most of its heavy armor. By the time the war was over, the United States had given Israel $2.2 billion in emergency military aid.
The intervention, which enraged the Arab world, triggered the OPEC oil embargo that for a time wreaked havoc on Western economies. This was perhaps the most dramatic example of the sustained life-support system the United States has provided to the Jewish state.
Israel was born at midnight May 14, 1948. The U.S. recognized the new state 11 minutes later. The two countries have been locked in a deadly embrace ever since.
Washington, at the beginning of the relationship, was able to be a moderating influence. An incensed President Eisenhower demanded and got Israel’s withdrawal after the Israelis occupied Gaza in 1956. During the Six-Day War in 1967, Israeli warplanes bombed the USS Liberty. The ship, flying the U.S. flag and stationed 15 miles off the Israeli coast, was intercepting tactical and strategic communications from both sides. The Israeli strikes killed 34 U.S. sailors and wounded 171. The deliberate attack froze, for a while, Washington’s enthusiasm for Israel. But ruptures like this one proved to be only bumps, soon smoothed out by an increasingly sophisticated and well-financed Israel lobby that set out to merge Israel and American foreign policy in the Middle East.
Israel has reaped tremendous rewards from this alliance. It has been given more than $140 billion in U.S. direct economic and military assistance. It receives about $3 billion in direct assistance annually, roughly one-fifth of the U.S. foreign aid budget. Although most American foreign aid packages stipulate that related military purchases have to be made in the United States, Israel is allowed to use about 25 percent of the money to subsidize its own growing and profitable defense industry. It is exempt, unlike other nations, from accounting for how it spends the aid money. And funds are routinely siphoned off to build new Jewish settlements, bolster the Israeli occupation in the Palestinian territories and construct the security barrier, which costs an estimated $1 million a mile.
The barrier weaves its way through the West Bank, creating isolated pockets of impoverished Palestinians in ringed ghettos. By the time the barrier is finished it will probably in effect seize up to 40 percent of Palestinian land. This is the largest land grab by Israel since the 1967 war. And although the United States officially opposes settlement expansion and the barrier, it also funds them.
The U.S. has provided Israel with nearly $3 billion to develop weapons systems and given Israel access to some of the most sophisticated items in its own military arsenal, including Blackhawk attack helicopters and F-16 fighter jets. The United States also gives Israel access to intelligence it denies to its NATO allies. And when Israel refused to sign the nuclear nonproliferation treaty, the United States stood by without a word of protest as the Israelis built the region’s first nuclear weapons program.
U.S. foreign policy, especially under the current Bush administration, has become little more than an extension of Israeli foreign policy. The United States since 1982 has vetoed 32 Security Council resolutions critical of Israel, more than the total number of vetoes cast by all the other Security Council members. It refuses to enforce the Security Council resolutions it claims to support. These resolutions call on Israel to withdraw from the occupied territories.
There is now volcanic anger and revulsion by Arabs at this blatant favoritism. Few in the Middle East see any distinction between Israeli and American policies, nor should they. And when the Islamic radicals speak of U.S. support of Israel as a prime reason for their hatred of the United States, we should listen. The consequences of this one-sided relationship are being played out in the disastrous war in Iraq, growing tension with Iran, and the humanitarian and political crisis in Gaza. It is being played out in Lebanon, where Hezbollah is gearing up for another war with Israel, one most Middle East analysts say is inevitable. The U.S. foreign policy in the Middle East is unraveling. And it is doing so because of this special relationship. The eruption of a regional conflict would usher in a nightmare of catastrophic proportions.
There were many in the American foreign policy establishment and State Department who saw this situation coming. The decision to throw our lot in with Israel in the Middle East was not initially a popular one with an array of foreign policy experts, including President Harry Truman’s secretary of state, Gen. George Marshall. They warned there would be a backlash. They knew the cost the United States would pay in the oil-rich region for this decision, which they feared would be one of the greatest strategic blunders of the postwar era. And they were right. The decision has jeopardized American and Israeli security and created the kindling for a regional conflagration.
The alliance, which makes no sense in geopolitical terms, does makes sense when seen through the lens of domestic politics. The Israel lobby has become a potent force in the American political system. No major candidate, Democrat or Republican, dares to challenge it. The lobby successfully purged the State Department of Arab experts who challenged the notion that Israeli and American interests were identical. Backers of Israel have doled out hundreds of millions of dollars to support U.S. political candidates deemed favorable to Israel. They have brutally punished those who strayed, including the first President Bush, who they said was not vigorous enough in his defense of Israeli interests. This was a lesson the next Bush White House did not forget. George W. Bush did not want to be a one-term president like his father.
Israel advocated removing Saddam Hussein from power and currently advocates striking Iran to prevent it from acquiring nuclear weapons. Direct Israeli involvement in American military operations in the Middle East is impossible. It would reignite a war between Arab states and Israel. The United States, which during the Cold War avoided direct military involvement in the region, now does the direct bidding of Israel while Israel watches from the sidelines. During the 1991 Gulf War, Israel was a spectator, just as it is in the war with Iraq.
President Bush, facing dwindling support for the war in Iraq, publicly holds Israel up as a model for what he would like Iraq to become. Imagine how this idea plays out on the Arab street, which views Israel as the Algerians viewed the French colonizers during the war of liberation.
“In Israel,” Bush said recently, “terrorists have taken innocent human life for years in suicide attacks. The difference is that Israel is a functioning democracy and it’s not prevented from carrying out its responsibilities. And that’s a good indicator of success that we’re looking for in Iraq.”
Americans are increasingly isolated and reviled in the world. They remain blissfully ignorant of their own culpability for this isolation. U.S. “spin” paints the rest of the world as unreasonable, but Israel, Americans are assured, will always be on our side.
Israel is reaping economic as well as political rewards from its lock-down apartheid state. In the “gated community” market it has begun to sell systems and techniques that allow the nation to cope with terrorism. Israel, in 2006, exported $3.4 billion in defense products—well over a billion dollars more than it received in American military aid. Israel has grown into the fourth largest arms dealer in the world. Most of this growth has come in the so-called homeland security sector.
“The key products and services,” as Naomi Klein wrote in The Nation, “are hi-tech fences, unmanned drones, biometric IDs, video and audio surveillance gear, air passenger profiling and prisoner interrogation systems—precisely the tools and technologies Israel has used to lock in the occupied territories. And that is why the chaos in Gaza and the rest of the region doesn’t threaten the bottom line in Tel Aviv, and may actually boost it. Israel has learned to turn endless war into a brand asset, pitching its uprooting, occupation and containment of the Palestinian people as a half-century head start in the ‘global war on terror.’ ”
The United States, at least officially, does not support the occupation and calls for a viable Palestinian state. It is a global player, with interests that stretch well beyond the boundaries of the Middle East, and the equation that Israel’s enemies are our enemies is not that simple.
“Terrorism is not a single adversary,” John Mearsheimer and Stephen Walt wrote in The London Review of Books, “but a tactic employed by a wide array of political groups. The terrorist organizations that threaten Israel do not threaten the United States, except when it intervenes against them (as in Lebanon in 1982). Moreover, Palestinian terrorism is not random violence directed against Israel or ‘the West’; it is largely a response to Israel’s prolonged campaign to colonize the West Bank and Gaza Strip. More important, saying that Israel and the US are united by a shared terrorist threat has the causal relationship backwards: the US has a terrorism problem in good part because it is so closely allied with Israel, not the other way around.”
Middle Eastern policy is shaped in the United States by those with very close ties to the Israel lobby. Those who attempt to counter the virulent Israeli position, such as former Secretary of State Colin Powell, are ruthlessly slapped down. This alliance was true also during the Clinton administration, with its array of Israeli-first Middle East experts, including special Middle East coordinator Dennis Ross and Martin Indyk, the former deputy director of the American Israel Public Affairs Committee, AIPAC, one of the most powerful Israel lobbying groups in Washington. But at least people like Indyk and Ross are sane, willing to consider a Palestinian state, however unviable, as long as it is palatable to Israel. The Bush administration turned to the far-right wing of the Israel lobby, those who have not a shred of compassion for the Palestinians or a word of criticism for Israel. These new Middle East experts include Elliott Abrams, John Bolton, Douglas Feith, the disgraced I. Lewis “Scooter” Libby, Richard Perle, Paul Wolfowitz and David Wurmser.
Washington was once willing to stay Israel’s hand. It intervened to thwart some of its most extreme violations of human rights. This administration, however, has signed on for every disastrous Israeli blunder, from building the security barrier in the West Bank, to sealing off Gaza and triggering a humanitarian crisis, to the ruinous invasion and saturation bombing of Lebanon.
The few tepid attempts by the Bush White House to criticize Israeli actions have all ended in hasty and humiliating retreats in the face of Israeli pressure. When the Israel Defense Forces in April 2002 reoccupied the West Bank, President Bush called on then-Prime Minister Ariel Sharon to “halt the incursions and begin withdrawal.” It never happened. After a week of heavy pressure from the Israel lobby and Israel’s allies in Congress, meaning just about everyone in Congress, the president gave up, calling Sharon “a man of peace.” It was a humiliating moment for the United Sates, a clear sign of who pulled the strings.
There were several reasons for the war in Iraq. The desire for American control of oil, the belief that Washington could build puppet states in the region, and a real, if misplaced, fear of Saddam Hussein played a part in the current disaster. But it was also strongly shaped by the notion that what is good for Israel is good for the United States. Israel wanted Iraq neutralized. Israeli intelligence, in the lead-up to the war, gave faulty information to the U.S. about Iraq’s alleged arsenal of weapons of mass destruction. And when Baghdad was taken in April 2003, the Israeli government immediately began to push for an attack on Syria. The lust for this attack has waned, in no small part because the Americans don’t have enough troops to hang on in Iraq, much less launch a new occupation.
Israel is currently lobbying the United States to launch aerial strikes on Iran, despite the debacle in Lebanon. Israel’s iron determination to forcibly prevent a nuclear Iran makes it probable that before the end of the Bush administration an attack on Iran will take place. The efforts to halt nuclear development through diplomatic means have failed. It does not matter that Iran poses no threat to the United States. It does not matter that it does not even pose a threat to Israel, which has several hundred nuclear weapons in its arsenal. It matters only that Israel demands total military domination of the Middle East.
The alliance between Israel and the United States has culminated after 50 years in direct U.S. military involvement in the Middle East. This involvement, which is not furthering American interests, is unleashing a geopolitical nightmare. American soldiers and Marines are dying in droves in a useless war. The impotence of the United States in the face of Israeli pressure is complete. The White House and the Congress have become, for perhaps the first time, a direct extension of Israeli interests. There is no longer any debate within the United States. This is evidenced by the obsequious nods to Israel by all the current presidential candidates with the exception of Dennis Kucinich. The political cost for those who challenge Israel is too high.
This means there will be no peaceful resolution of the Palestinian-Israeli conflict. It means the incidents of Islamic terrorism against the U.S. and Israel will grow. It means that American power and prestige are on a steep, irreversible decline. And I fear it also means the ultimate end of the Jewish experiment in the Middle East.
The weakening of the United States, economically and militarily, is giving rise to new centers of power. The U.S. economy, mismanaged and drained by the Iraq war, is increasingly dependent on Chinese trade imports and on Chinese holdings of U.S. Treasury securities. China holds dollar reserves worth $825 billion. If Beijing decides to abandon the U.S. bond market, even in part, it would cause a free fall by the dollar. It would lead to the collapse of the $7-trillion U.S. real estate market. There would be a wave of U.S. bank failures and huge unemployment. The growing dependence on China has been accompanied by aggressive work by the Chinese to build alliances with many of the world’s major exporters of oil, such as Iran, Nigeria, Sudan and Venezuela. The Chinese are preparing for the looming worldwide clash over dwindling resources.
The future is ominous. Not only do Israel’s foreign policy objectives not coincide with American interests, they actively hurt them. The growing belligerence in the Middle East, the calls for an attack against Iran, the collapse of the imperial project in Iraq have all given an opening, where there was none before, to America’s rivals. It is not in Israel’s interests to ignite a regional conflict. It is not in ours. But those who have their hands on the wheel seem determined, in the name of freedom and democracy, to keep the American ship of state headed at breakneck speed into the cliffs before us.
Chris Hedges, who graduated from Harvard Divinity School and was for nearly two decades a foreign correspondent for The New York Times, is the author of “ American Fascists: The Christian Right and the War on America .”
Article printed from www.CommonDreams.org
URL to article: http://www.commondreams.org/archive/2007/06/30/2231/
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