Bright Prospects for Economy

The economic promise presented by the new Middle East strategy stays firmly under wraps – no less than the covert start of military operations. Israeli’s deep budget cutbacks, the spreading poverty and agonies of unemployment are profoundly demoralizing – and there is more to come. Critics of the Sharon government, like former prime minister Binyamin Netanyahu, have been encouraged to look forward to is imminent demise.
That is because only half the truth has been told.
America did not finance the 1991 Gulf War alone; it had help from an international coalition, with Saudi Arabia, the Gulf emirates, Germany and Japan investing heavily in the war effort. But this campaign against Saddam Hussein is financed out of America’s pocket. The $20 b war-against- terror budget allocated by the US congress last week earmarked no more than $200 m for Israel’s needs in that war. Washington expects Israel to find its own war funding. This has forced the government into spending cuts that go ever deeper. One of the most respected of Sharon’s ministers, David Levy, resigned last week in protest against the dangerous widening of an already unhealthy earnings gap in Israeli society.
What Sharon has not confided to that suffering society is that America’s scenario for the region holds the prospect further down the road for Israel’s economic renewal and growth.
Assuming that the US military operation against Iraq goes forward according to plan, winding down at the end of 2002 or early 2003, by spring 2003, the Middle East will be in the throes of a geo-strategic metamorphosis.
During the hostilities, Jordan and Israel will provide the United States forces with rear bases, with economic benefits to both. After the conflict dies down, more than 70,000 troops, most American, are scheduled to remain in Iraq to pacify and reconstruct the war-torn country. They will also be there to oversee the next stage of the Bush plan, the process of splitting the country up into four loosely federated self-governing states – Sunni, Kurdish, Turkoman and Shiite. These new entities will need to be built up from scratch at top speed – requiring such modern utilities as regular water and food supplies, health, medicine, communications and road networks.
American think tanks estimate that post-Saddam Iraq will eat up an annual investment of between $15-20 billion for up to a decade.
Israel is the only country in the region with the technological and manpower resources to undertake the rapid execution of these projects. At least three of the four self-governing states of fragmented Iraq have quietly indicated they would welcome future collaboration with Israel, political as well as economic. One possible area of collaboration would be the installation of a cell phone system in areas lacking regular phone networks. Israeli firms set up Jordan’s cell phone system and could carry out the job of extending it across the frontier into the new Iraqi Kurdish or Turkoman provinces.
Nor is there any reason why oil from the northern Iraqi towns of Mosul and Kirkuk should not run through the long disused pipeline transiting Jordan and Israel to the Mediterranean port of Haifa, a shorter route than its present outlet through Syria.
These are not pipedreams but real plans drafted for American planners in Washington by a task forced headed by retired Col. Scott R. Feil, co-director of developing plans for post-conflict Iraq. These plans were submitted to the Senate defense and intelligence committees Thursday, August 1. Their post-war activation would inject new life into the Israeli economy, generating growth after the present tough deprivations and stagnation induced by the 22-month confrontation with the Palestinians.
For the moment, all these glowing prospects sit on the drawing board, depending on the Bush administration going through with its plans and carrying them off. Sharon is not yet counting his chickens. But he hopes at the least for a partial transformation of the region to occur by the middle of 2003, including the eclipse of Yasser Arafat and his regime. This time line will enable the Israeli prime minister to face the Israeli voter in an October 2003 election, claiming to have vastly improved the strategic and economic state of the country, compared with the situation he inherited in February 2001.

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