Flirting with the devil may be an ancient pastime in the Holy Land, but today it’s big business. Even before Israel and Jordan signed their treaty last week, Arab businessmen from Masqat to Marrakech were slipping into Israel in record numbers, hoping to make a killing on peace. And politicians are pushing hard to bolster peacemaking with financial interdependence. This week, Israeli Prime Minister Yitzhak Rabin, eight of his ministers and some 130 Israeli businessmen will hobnob with their Arab counterparts at an unprecedented regional economic summit conference in Casablanca. On the table: billions of dollars in potential projects, including new cross-border telephone networks, roads and rail lines to be financed by a regional development bank. “The Middle East is open for business,” Secretary of State Warren Christopher said as he flew to the region from Washington.
Scenes that would have been unthinkable a few years ago already are commonplace. Arab businessmen are ushered through the VIP lounge of Ben Gurion airport, where entry stamps aren’t necessary. They’re talking about gas pipelines and drip irrigation, fruits and vegetables, medical equipment and telecommunications. They pass out souvenir pens from Bahrain, lapel pins from Kuwait, dagger-shaped bottles of perfume from Saudi Arabia. They shop in Tel Aviv, visit factories in Haifa and get private tours of the Al-Aqsa Mosque, Islam’s third holiest shrine.
Israelis aren’t just waiting around for Arabs bearing gifts; they’re heading to enemy territory, too. Many who travel to Arab countries still formally hostile to Israel are dual citizens using American or other passports. Others make special arrangements and travel with Israeli documents. “It was like a dream,” says Mandy Barak, who heads the Islamic desk for the Federation of Israeli Chambers of Commerce, after viewing the lights of Saudi Arabia from his plane during a recent trip to the Persian Gulf. A photo with Yasir Arafat is a coveted item. Benjamin Gaon, president and CEO of Koor Industries, Israel’s largest conglomerate, has one signed “with best wishes” from the PLO leader. “Business is business and Moses is Moses,” Gaon says.
Money has always found its way across the Israeli-Arab confrontation line. The more lucrative smuggling was with the Arab gulf states, and that got a boost when Saddam Hussein invaded Kuwait in 1990. The gulf Arabs thought that if Arafat could openly embrace Saddam, they could dally secretly with Israel. In 1993, according to various Israeli estimates, the Jewish state exported between $400 million and $800 million worth of merchandise to ostensibly hostile Arab states. The goods -produced without Israeli markings–moved through intermediaries who provide false documents in return for a percent or two of the sale price.
Such middlemen may soon be out of business. In September the gulf states scrapped their already ineffectual policy of boycotting companies that trade with Israel. Morocco and Tunisia have agreed to open interest sections in Tel Aviv, and other Arab countries will probably follow. Israelis have attended regional talks on economics, water and arms control in Tunisia, Oman, Qatar and Morocco. Just last week, an Israeli delegation went to Bahrain.
Governments as well as traders stand to gain. Israel estimates that integrating the region’s power grids could save more than a billion dollars. Jordan could save on shipping costs by transporting goods overland to Israel’s Mediterranean ports. Everyone could benefit from cooperative efforts to harness increasingly scarce water resources.
The brightest spot in new business may well be tourism–if terrorists don’t succeed in scaring visitors away. Twelve thousand Egyptians visited Israel in the first half of this year, 1,700 more than in all of 1998. When a Palestinian waiter dropped a glass in the Amman Intercontinental Hotel recently, one of the breakfast guests shouted, “Mazel tov!”–and no one blinked. Israel also hopes to become a regional hub for Western firms – and the gateway for Arabs seeking business with them.
But so far, talk of a business boom remains mostly talk. Even Egypt, at peace with Israel for 15 years, has shied away from ventures that could be targeted by extremists. Poorer Arab countries aren’t thrilled by the prospect of being overrun by Israeli businessmen, and Israel’s generally high-tech products don’t have much of a market in those places. Palestinians, most of them still refugees or living under Israeli occupation, are an especially hard sell.
Gulf Arabs flirt with the possibility of joint schemes, but they, too, are hesitant to openly jump into bed with Israeli partners. “We talk and meet and we’re very polite and nothing comes out of it,” says Thomas Levy, president of IDE Technologies, an Israeli company that makes desalination plants. Even when they cut deals with Israelis, most Arabs still want them kept secret, partly because they fear the wrath of Syria’s Hafez Assad. Some Israeli analysts doubt the payoff will amount to much even if Syria falls into line.
The Arabs have plenty of their own skeptics. After the gulf countries announced they were ending the secondary boycott of Israel, the state-controlled Syrian daily Tishrin grumbled that “if there have been some breakthroughs, they have nothing to do with peace.” Neither Syria nor Lebanon named representatives to the Casablanca summit. The hope is that movement on other fronts will spur the Syrians forward–and that even in Damascus and Beirut, the profits of peace will eventually win out over the prophets of doom.
