From Challenge No. 78
March-April 2003

editorial 

ARIEL SHARON'S Likud won a third of the seats in parliament, while his opponents scattered before him. Israeli voters gave the Likud 38 mandates (twice Labor's yield), and it got two more when Yisrael b'Aliyah, the immigrants' party, joined it. With so much power, why couldn't Sharon put together the centrist government he wanted?

The centrist government was to consist of the Likud (40 seats), Labor (19) and Shinui (15). But Sharon desired a hobbled Labor Party that would cringe in accordance with its poor electoral showing. He wanted Labor, that is, without political demands, as in the two years of his recent national-unity government. Labor's leader Amram Mitzna, however, had gone out on a limb during the election campaign, stating that the party would not again sit in a government led by Sharon. During the coalition probes, Mitzna insisted on Israeli concessions to the Palestinians. He even demanded them in writing. Sharon saw that Labor and Shinui together might dictate the pace of negotiations. They would push him to the left of George W. Bush! Since Bush wasn't pressuring, why let Mitzna?

Thus, Sharon wound up with two parties from the extreme right, the National Religious Party (Mafdal) and the National Union. They will keep him bound in a straitjacket. As for Shinui, its presence in such a government looks odd. Right now, with fifteen mandates and five ministries, Shinui is in euphoria. Soon, however, its leaders will begin to squirm in those coveted chairs.

Mitzna decided to stay out of the government despite the approach of war with Iraq. For he and his party have begun to doubt whether the war can solve the conflict with the Palestinians. Not that Labor itself has much to offer toward a peace agreement. Like Sharon, it banks on the rise, in the Territories, of a docile leadership that will put down the rebellion. In the meantime, Labor views the "separation fence" as a way of keeping suicide attackers at bay. Yet a fence is not a strategy. Nor is it a nucleus that can gather the forces that are needed to mount an effective opposition.

The economic danger

During the election campaign, Israel's economic situation lay largely forgotten. Now it is in the spotlight again. Let there be no doubt: the country has passed from recession to depression. The deficit for January and February (slightly more than $1 billion) amounts to a third of that which was planned for all of 2003. International standards put the maximum deficit for a healthy economy at 3% of GDP. If the trend continues, Israel's will wind up at 6%. International financial institutions will likely lower its credit rating.

In the past, this country could look for help to Uncle Sam. Now America itself is in financial trouble. It did not make good on Bill Clinton's promise of $800 million in extra aid, following Israel's withdrawal from Lebanon. G.W. Bush reduced the amount to $200 million, but in the budget for 2003, Congress refused even this. In the expectation of war, Israel has gone thrice to Washington with a new and bigger request, its price for self-restraint: $4 billion in grants, $8 billion in loan guarantees. There is little reason to think, however, that the members of Congress will hurry to increase foreign aid, while their constituents stand on bread lines.

Where then will Israel find the money to cover its dangerous deficit? Not from taxes: in the present depression, tax collection is down. It cannot cut its massive security budget, except through an arrangement with Palestinian leaders (presuming they could then calm the revolt). This would require concessions that Sharon, as said, refuses to make. What then remains? To cut the rest of the budget – to cut, that is, into basic social services like education, pensions, guaranteed minimum income, unemployment benefits. The government, in fact, is tailored for this. Shinui, the self-styled party of the middle class, refused to sit with ultra-orthodox parties like Shas. For the first time in Israel's history, it has a government with no ultra-orthodox. These parties used to serve as a safety valve, funneling money to their non-working constituents. We may expect, then, cuts in the living flesh of the poor.

Without Shas to protect his name among Mizrahi (Oriental) Jews, Sharon's popularity is likely to diminish at last. That is one reason why he appointed his rival within the Likud, Binyamin Netanyahu, as Finance Minister. If the economy goes bust, the two fall together.

Here Sharon and the captains of commerce are counting on the war with Iraq. A US victory, they hope, will improve America's economic and political standing in the world, and a portion of the spoils will flow their way.

The Palestinian Arena

The Palestinian arena is, as ever, the heart of the problem. The original occupation of the Territories reached a dead end in the first Intifada. The Oslo agreement replaced it: Israel's hand was to be there still, but invisible. Yet Oslo went awry. The Palestinian partner, in Israel's view, refused the generous offers of Ehud Barak at Camp David. Instead it backed a second Intifada. Then the Palestinian Authority lost control; suicide bombers penetrated into Israel. Responding to this emergency, in April 2002, the two main centrist parties, Likud and Labor, joined forces to defeat the Palestinians. They hoped, at first, that Yasser Arafat would regain control. When it seemed he could not, they decided to subdue the rising by force and engineer a change in the leadership.  

In September 2002, backed by Europe as well as America, Israel attempted to topple Arafat and replace him with Mahmoud Abbas (Abu Mazen). In an operation known as "A Matter of Time", it besieged the PA leader in his Ramallah headquarters. This first attempt failed, but it was only, indeed, "a matter of time". After six more months, the isolation of Arafat from the international arena, a new Israeli election, and the joint pressure of Europe and America in the form of the Quartet, Arafat was persuaded to transfer some of his powers to a prime minister. Meanwhile, both societies have paid an enormous price in life, limb and property. The Palestinian economy (what little there was of it) has been totally destroyed. The World Bank estimates that sheer physical damage to the Palestinians reached $728 million by August 2002. Half the workers in the private sector lost their jobs. From June 2000 until June 2002, exports dropped by 40%.  The PA's debts to private suppliers are put at $370 million. In the year 2000, 21% of Palestinians lived beneath the poverty line; today the figure is 60%. Nablus is the worst case. Since the start of the Intifada in September 2000, this city has known 190 days of curfew, of which 110 were continuous. About 300 homes have been damaged, 110 of them irreparably. Of the city's inhabitants, 350 have been killed and 1000 wounded, 200 crippled for life. (Source for Nablus: Gideon Levy's column, "The Twilight Zone," Ha'aretz Weekend Magazine, March 7, 2003.) 

For the post of Palestinian prime minister, the White House preferred a former member of the World Bank, Salam Fayyad. (Arafat had appointed Fayyad to head the Finance Ministry in the spring of 2002, after Israel's Operation Defensive Shield.) But Fayyad had not risen through the ranks of Fatah, and the latter refused to accept him as PM. In the end, against his will, Arafat had to nominate Fatah's Number Two, Abu Mazen – the man who, a few months earlier, had tried to undermine him. A matter of time.

The appointment of Abu Mazen as prime minister signals the beginning of the breaking of Arafat. This is a feather in the cap of America and Israel. Yet suppose Abu Mazen accepts the job. Suppose he works with the Quartet and Israel in an effort to pacify the Territories. Even so, he will have a hard, perhaps impossible, time of it. The last ten years have demolished all the infrastructures – economic, civil and political. The leadership has nothing to work with.

Israel wants a new policeman in the Territories, but it has no carrot to offer, just a stick. Locally, it makes war on Hamas. With the March 8 assassination of Ibrahim al-Makadme, 53, a founder of the organization, Israel appears to have taken Abu Mazen, doing what he cannot. The killing shows, too, that it has decided not to wait for Bush's war: it will go ahead, regardless, within the domain it considers its own.

Israel knows, however, that a local victory won't be enough. It counts on the defeat of Saddam Hussein. This, it believes, will lay to rest the specter dreaded by all the region's leaders: Arab public opinion. The belief, however, lacks all foundation. No lasting peace has ever been made on the basis of fear and hatred.

Thus, Israel bets on a war in which it cannot take part. Sharon hopes that the defeat of Iraq will bring back to his fold a chastened Labor Party, while restoring his international respectability. The Israeli establishment hopes that an American triumph will extract the US from its economic slump and catalyze a new diplomatic process. All of them together hope that the war will break the spirit of the Palestinian people, which will then accept even less than the Clinton Plan envisaged.

Yet what if America gets bogged down? What if the outcome appears as less than victory? Thus writes Ze'ev Schiff, military commentator for Ha'aretz (March 7): "If the deterrent power of the US should be damaged, the western powers too, including France, will lose out in various sectors. An American capitulation will affect Israel more quickly. An important part of its deterrent power depends upon the US. If the American deterrent is damaged, so will Israel's be. Her enemies will grow bolder, and with that, their challenge to her vital interests."

We recall the Titanic. It was thought to be unsinkable until it hit an iceberg. So America has long appeared unsinkable, but its iceberg is within. America's iceberg is Capitalism, whose inner contradictions are breaking surface once more after 70 years.

The US reaches toward the war as to a lifeline, in a desperate attempt to save its power of deterrence. It fights against the pull of the deep.

And where, in all this, is Israel? Bound to the Titanic.  n

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