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Foreign Affairs
Advancing Peace in the Middle East: The Economic Path Out of Conflict
By A. Robert Abboud and Newton N. Minow
The Arab-Israeli conflict has defied peaceful accommodation, let alone resolution, for more than 50 years. Wars have been fought, people displaced, land occupied, law and order disrupted, economies shattered, and a cauldron for terrorism permitted to boil. Yet the United States and the Western world have never fully employed an essential resource that they could bring to the search for peace: economic development, which creates regional opportunities for trade, investment, and jobs.
One might question the value of embarking on an effort in the Middle East before a comprehensive political settlement has been reached. However, the experience of businesspeople, more comfortable with risk-taking than are diplomats, shows that economic interaction often leads to political adhesion. Examples can be found in western and eastern Europe and increasingly in Asia. Politics follows commerce because commerce provides mutual benefits across the broad expanse of the population, regardless of race, color, religion, or ideology. Economic interaction creates opportunity for the investment of talent and creativity and multiple avenues for individual self-fulfillment.
Getting agreement on the stabilizing potential of economic development is easy. Translating that agreement into actual progress on the ground is tough as long as conflict and antipathy scar the region. A recent report from the Council on Foreign Relations, titled Harnessing Trade for Development and Growth in the Middle East, provided a push in the right direction. The report drew a connection between international terrorism and "the misery and hopelessness engendered by economic backwardness and stagnation." It saw the promise of a better life as both a key remedy to the appeal of terrorism and a path toward resolution of the Arab-Israeli conflict.
Cross-Border Prospects
Harnessing Trade recommended a series of steps to liberalize trade, encourage greater private investment, and improve public services and government administration in the countries of the Middle East. It also proposed using the World Trade Organization and trade agreements with major global economies as instruments of domestic reform. Needed now is a task force to advance the report from its broad principles to regional projects; these projects, in turn, will require capital, talent, and cross-border agreements. Eleven such initiatives should be pursued.
Three concern exploitation and sharing of natural resources. First, undeveloped gas reserves off the coast of Alexandria could be piped into Egypt and across the Negev Desert into Israel. This gas would not only supply a power source but could also be used as a raw material for chemical and pharmaceutical product development.
Second, access to water is a growing problem in the Middle East, and one that could fuel continued regional conflict if not resolved. One useful project would thus be the construction of a water pipeline, long promoted by the international contractors Brown and Root, from Turkey to the Litani River in Lebanon and the Jordan River.
And a third project would combine the . . .
A. Robert Abboud is former Chair of the First National Bank of Chicago. Newton N. Minow is Senior Counsel to Sidley Austin Brown & Wood. Both have extensive experience in dozens of business ventures around the world.