Peace Dividend in Middle East Could Exceed Saving from End of Cold War

By Asfour, John | Washington Report on Middle East Affairs, January 31, 1992 | Go to article overview

Peace Dividend in Middle East Could Exceed Saving from End of Cold War


Asfour, John, Washington Report on Middle East Affairs


Peace Dividend in Middle East Could Exceed Saving from End of Cold War

The peace dividend from the end of the Cold War, if it materializes, may be less than benefits to the US taxpayer that could flow from a clean-cut victory in Middle East peace negotiations for US President George Bush's new world order. If the peace conferences now underway succeed under US and international prodding in finally achieving a settlement between Israel, the Palestinians and Israel's Arab neighbors, the US taxpayer could be the real winner.

Figures worked out from USAID and US Defense Department summaries of direct US aid resulting from Camp David agreements indicate that the actual savings could exceed more than $100 billion if Israelis, Palestinians, Syrians, Jordanians and the new Lebanese regime can be persuaded to start down the road to a real peace.

Focus on a peace settlement instead of Jewish Settlements.

By contrast, Pentagon and outside economists estimate that for several years any peace dividend from the ending of the Cold War will be limited, perhaps only slowing the growth of the budget for defense. But if peace should come to the Middle East, immediate Middle East dividends would stem from cutting back heavy US government spending on Israel, Egypt and the deployments of military forces in or near the Persian/Arabian Gulf.

For Israel, American government savings would largely be on the military side, some $25 billion over the next decade. This would involve slimming down Israeli armed forces levels, but leaving Israel still with the fourth or fifth largest modern army in the world, retaining a two-to-one advantage in modern weaponry over any combined Arab force from the Arab confrontation states.

The peace dividend would increase considerably if Western countries, including the United States, lowered immigration barriers to Soviet Jews. The cost of settling them in Israel is approximately eight times the cost of settling them in the US or elsewhere.

Jordan might still require assistance, but nowhere near the level of emergency aid if the peace talks should relapse into confrontation again. Real peace that allows the Jordanian economy to bounce back strongly could reduce US aid to Jordan over a 10-year period by at least $5 billion.

Hobart Rowen, in a mid-November Washington Post column, suggested that a regional trading bloc, similar to the Benelux countries, might be a real incentive for peace which would also save US aid and involvement. Khaled Al-Hassan, the PLO foreign policy official now resident in London, has long held a vision of a trading bloc combining the manpower, technology and markets of Egypt, Israel and Palestine. Realization of that vision would likely mean huge savings for US taxpayers on aid to Egypt, perhaps as much as $10 billion over the next 10 years.

And finally, the peace dividend in the Middle East could mean the saving of at least $15 billion in American force deployments to the area, one of the most expensive regions in the world for maintenance of military forces.

The total savings over the 10 years would be one-third greater than simple addition would indicate, since all funding must be presumed to be over budget: Every dollar saved would reflect that much less interest costs. If the savings over the 10-year period averaged $7.5 billion a year, an additional $2.5 billion in interest costs would be saved each year.

How can the United States government get this dividend for American taxpayers? A simple five-point program:

1. Focus everything on the breakthrough at Madrid. Don't take no for an answer.

2. Offer Soviet Jews a choice now, and allow the 350,000 already registered at the American Embassy in Moscow to come in during the next two years or go to other countries that will admit them if they so desire.

3. Appeal over the heads of the rejectionist government in Israel to the Jewish public in the US and in Israel to campaign against a "Greater Israel. …

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