'Making Peace Pay' in Middle East

By Joe Wrinn

News Director

LONDON - Harvard traveled to England last week as the Kennedy School of Government's Institute for Social and Economic Policy in the Middle East (ISEPME) brought together adversaries from the Middle East to generate concrete and practical ways for "Making Peace Pay" by balancing economic and security needs in the region.

The two-day conference, organized in rapid response to the recent Israeli elections and the follow-up Arab meetings in Cairo, attracted a unique combination of concerned businessmen, government officials, and academics from Israel, Egypt, Jordan, the Palestinian National Authority, Bahrain, Lebanon, Saudi Arabia, the U.S., and Europe.

ISEPME staff members - who organized the conference logistics on extremely short notice in a rain-soaked city that was clogged with the Wimbledon tennis championships, the EuroCup finals, and a railway strike - sought to provide an independent, open, and supportive academic environment for Middle East rivals to pragmatically discuss solutions that would promote mutual prosperity while assuring that relevant security concerns would be met.

Behind closed doors for three of the seven sessions, the 120 participants sat together in air choked with cigarette and cigar smoke and frankly assessed the deteriorating situation in the Middle East and brainstormed ideas toward its revitalization. The conference served as a catalyst to keep trade talks moving forward in areas where governments' actions were currently stalled.

"I think the Institute filled a gaping hole in the peace process by convening a meeting on how to unlock the Palestinian economy without forfeiting Israeli security," said Leonard Hausman, director of ISEPME, and co-chairman of the conference. "This was a special thing we did. There were several revealing moments that made you realize this was not just an academic exercise. It was much more serious and something that governments should be convening."

"It was quite emotional and even tempestuous at times," said Robert Lawrence, the Albert L. Williams Professor of International Trade and Investment, and the conference's other co-chairman. "But for the most part, everyone was pretty cooperative. They were accommodating and didn't deny there were problems. They all took up the challenge of working towards solutions."

The conference was the first meeting of its kind involving Israelis and Arabs since the Israeli elections and was front-page news in the Middle East. Although not the central topic of the conference, discussions and much of the public keynote addresses unavoidably centered on the status of the Middle East peace process.

Former Israeli Foreign and Defense Minister Moshe Arens reiterated Israel's concern for security but said the new government was committed to reaching agreement on all current issues with the Palestinian Authority. Egypt's Minister of Foreign Affairs, Amre Moussa, countered by saying that in light of hard-line rhetoric surrounding the recent Israeli elections, his country was primarily concerned that existing agreements and understandings continue to be honored. In the conference's most dramatic moment, Moussa, speaking from the podium of the Chesterfield Hotel, pointed his finger directly at Arens in the audience and said Egypt wanted to "close the file forever on Arab-Israeli hostility."

In his keynote address, Jawad Anani, former Jordanian Minister of Trade and Information, stressed avoiding regressing to a renegotiation of issues that had been resolved earlier in the peace process. Nabeel Sha'ath, Palestinian Minister for Planning and International Cooperation, asked each of the attendees to have enough perspective to appreciate the difficulties of the others. As an example, he pointed out that Yasser Arafat, while working to keep the peace process moving, must also address the civil unrest that a 23 percent fall in Palestinian per-capita income in the past six months has brought.

Specific ideas that were explored during the conference's private sessions included establishing a single customs authority for the region and working to establish Palestinian-Israeli joint ventures in order to give Israelis a stake in the progress of the Palestinian economy. "Egypt must allow Palestinians access to Egypt to conduct business," said Hausman. "And Israel must distinguish carefully between controls over Palestinian trade that affect its security as compared to those which serve protectionist interests or bureaucratic malice."

Reporters from the Middle East used their limited access to the conference keynote addresses to search for clues in the ongoing political debate in their region. Headlines in Israel implied Arens was using the conference to actively position himself for a future job in the new Israeli government. The coverage so upset Arens, who emphasized several times during the conference that he was attending as a private citizen, that he began his keynote address at the Churchill Intercontinental Hotel by scolding the reporter in the audience who had written the story. Arens later canceled a scheduled appearance on CNN.

The conference built upon the June 1995 publication of the report "Towards Free Trade in the Middle East: The Triad and Beyond" that recommended a phased-in Palestinian/Israeli/Jordanian customs union. The report was the product of research by a team, chaired by co-chairman Lawrence, of Israeli, Jordanian, and Palestinian experts from the Kennedy School, ISEPME, the Jordan Technology Group, the Harry S. Truman Institute for the Advancement of Peace, and the Palestine Consultancy Group.

The report highlighted the crucial role trade must play in bringing stability and peace to the region. Its premise: a comprehensive arrangement for peace requires a comprehensive arrangement for trade. It provided a catalyst to move away from protocol trade, based on politically imposed obstacles, toward a price-regulated system. In all three economies, investment has been depressed by the uncertainty of political hostilities. Peace and prosperity, the report emphasized, are mutually reinforcing.

Instead of proceeding with separate bilateral agreements between each other, the report recommended that the Triad join in a single agreement to bring free trade to the Middle East.

"As of the moment of the conference, none of the governments was sitting the parties down to avoid sacrificing Palestinian and regional prosperity to the actions of the small number of extremists who, without doubt, have gained the upper hand in recent months," said Hausman.

Both Hausman and Lawrence said follow-up discussions are planned for the future. Both hope their "track-two" efforts will lead to concrete solutions that can be incorporated into the mainstream diplomatic negotiations.

"Since we at Harvard are financially and politically independent, and have the expertise to address the issues of trade and security, we will not let this matter rest," said Hausman.