fugitive peace

Picture: Hadar Naim

Yesterday the unthinkable happened. I stood in front of a large audience at a conference in Tel Aviv and said that I thought Binyamin “Bibi” Netanyahu was Israel’s best choice for prime minister. (Actually I said “most interesting”, not “best”, but if we’re being honest, what’s the difference.)

If my Palestinian friends find out they will stop talking to me. Maybe most of my Israeli friends too. Politically I’m somewhere to the left of Meretz. Was I out of my mind?

It was the Globes annual business conference, and I was speaking about Israel’s long-term economic prospects. The main problem, I said, was political stability. Governments change so often that it inhibits serious policymaking.

I took the world financial crisis as an example. Israel should not be feeling the pain much. Its markets were hardly exposed to the strange financial instruments that have brought the rest of the developed world to its knees. Its exports will suffer, but that should only produce a mild slowdown. But the banks are panicking and shutting down credit, ignoring the Bank of Israel’s sharp interest-rate cuts, and that is causing the whole economy to shudder. Growth will be around 1.5% next year by the Bank of Israel’s estimate; in per-capita terms, that’s a recession.

What’s needed is a fiscal stimulus plan. But with Israel yet again in an election cycle, it’s impossible to get a serious one passed. There is a package, but frankly, it’s a joke.

When Netanyahu was finance minister he did a lot of good things. He introduced sensible fiscal management, which provided greater economic stability - the month-long war in 2006 hardly caused a blip in the economy - and reformed the financial markets; one effect of those reforms was to separate banking, insurance and asset management, specifically to prevent a crisis in one part of the financial system infecting the rest of it.

He also did a lot of harm to the poor and the middle class because, as is often the case with economic reforms, it was the rich that benefited first. The welfare-to-work “Wisconsin programme” got lots of people into work, but it didn’t make them better off, just increased the numbers of the working poor. The number of mortgages has been falling steadily too, which is a bad sign for the middle class’s health. But I’ve talked to some of Bibi’s policy whizkids over the years I’ve been here, and I think they recognise the mistakes.

So if we’re talking about economic policy, he has a more ambitious and intelligent one than his rivals. And a Likud government will be more stable than either a Kadima or Labour one, and more able to make reforms happen. For Israel, this is better.

For the Palestinians, of course, Likud is a different story.

Bibi says he doesn’t want to reach even a vague final-status agreement with Abbas now, as Olmert has been trying to for the past year. He talks instead about something called “economic peace”. This translates as: we’ll try to boost the West Bank economy enough so that they stop wanting to bomb us, and then, once they’re nice and quiet, we’ll think about talking about negotiating about working towards possible moves that might, in the fullness of time, when the moment is ripe, and without prejudice to Israel’s right to bomb the hell out of anyone it thinks is a threat, lead, eventually and in the long run, to Palestinian independence. Oh, and let’s not even mention Gaza.

You can guess what I think of that.

However, the fact is that neither Kadima nor Labour is offering the Palestinians anything better. Olmert’s offer of a “shelf agreement”, along with half-baked measures to boost the West Bank’s economy while strangling Gaza in an attempt to get the Palestinians living there to turn on Hamas, amounts to pretty much the same thing, just dressed up more nicely.

In fact, it’s better for the Palestinians to have an Israeli prime minister who doesn’t even pretend he wants to give them a state than one who claims to be working on it very hard while indefinitely stringing the process along because s/he has nothing else to offer as a policy platform. It may not be better for Abbas himself; his political survival depends on stringing out the process just as much as Olmert’s did and Livni’s will. But if that’s the best he can offer his people, he should go too.

Furthermore: if Olmert were, by some already thankfully remote chance, to reach a shelf agreement with Abbas before the election in February, it would be a disaster for the Palestinians, and for Abbas personally. Armed with that agreement, Bibi would be in an even stronger position to say that there is nothing more to talk about.

(I don’t, by the way, set much store by the argument, typical of certain hopeful leftists, that Israel’s biggest peace concessions have been made by Likud leaders. Netanyahu handed over most of Hebron to Palestinian control signed the Wye River Memorandum when he was prime minister in 1988, but under duress, not because, like Ariel Sharon with Gaza or Menachem Begin with the Sinai, he suddenly woke up and decided that it was the right thing to do.)

The other main thing to give one pause is that Bibi, to whom we owe the immortal fear-mongering line “It is 1938, and Iran is Nazi Germany”, is the man most likely to send Israeli fighters to bomb Iran’s nuclear facilities and possibly start another war to bring the entire Middle East down in even more flames than are engulfing it already. But I think if Israel had any window for bombing Iran, it ends when Barack Obama is sworn in. Without at least tacit support from the United States, he can’t do it.

So I say Bibi for prime minister. And by as many seats as possible. The Israeli left needs a total defeat if it’s to rise as a serious political force again.

I just outlined this reasoning to one of my Meretz-voting Israeli friends. He said, “Wow. You’re thinking like an Israeli.”

(And, just to make it clear, this is not the official position of The Economist.)

Photo: Antônio Milena/ABr

Just when I leave, it gets exciting.

I finished my posting for The Economist in Jerusalem nearly three weeks ago (am now taking six months off, most of it in Israel). I went to the UK for two weeks and missed the Hizbullah prisoner swap and the Obama visit.

And now Olmert’s quitting.

After his announcement that he won’t stand in the Kadima primary in September, lots of opposition politicians are predictably predicting the party’s imminent demise. Neither Tsipi Livni nor Shaul Mofaz will be able to hold it together, they say. There’ll have to be elections anyway.

True, it’ll be hard. But the survival instinct is a wonderful thing. Kadima has something to work towards: the “framework interim outline shelf agreement” or whatever the hell it is they’ve been negotiating with Mahmoud Abbas. (Sorry, I can’t help being cynical, even though I hear in occasional conversations with people “close to the negotiations” that they’re actually going pretty well.) As long as they have that, they justify their existence — if not directly to the Israeli public, then at least to the Bush administration, whose backing can help prop up the government.

And the administration doesn’t want anything to stop this agreement being signed. A source of mine confirms that the report by Jim Jones, the American security coordinator, which says very harsh things about Israeli policy in the occupied territories, is going to be suppressed despite strenuous efforts by Jones himself to get it published. Presumably they’re afraid the Israelis are even less likely to make concessions to Abbas if it looks like they’re doing it under pressure.

What the agreement will actually say if Tsipi Livni takes over from Olmert is harder to guess; while he and Abbas get on just fine, she’s apparently a much tougher cookie in her branch of the negotiations. Even more doubtful is whether the Syria track will continue. But as long as peace talks themselves continue she can look like she is doing something, at least until a new US president takes office and gets his bearings, which could be a while.

Moreover, without corruption scandals exploding every other day, this coalition could be relatively stable. Neither Kadima nor Labour wants an election because they will lose seats in one. And Shas, which could bring the government down if it quits, probably figures it has more leverage and can get more subsidies out of the current arrangement than if it joins a new coalition led by a powerful Likud — especially with Netanyahu, the arch-enemy of subsidies, at the helm.

It’s ironic and sad that the only way to make an Israeli prime minister (and, while we’re at it, a Palestinian president) take peace talks seriously is to make his or her political survival hang by a thread. Which is why I’m kinda glad I don’t have to write about this stuff any more. And yet I can’t help doing it anyway…

“Don’t expect the talk of peace with Syria to come true,” I said on this blog a couple of months ago. Well, now Israel and Syria are holding talks via Turkish mediation. But as my piece in this week’s issue of The Economist says, there are plenty of people who think Olmert is just doing it to divert attention from the Palestinian talks and his corruption investigation. And it may be no coincidence that Bashar al-Assad and Recep Tayyip Erdogan would welcome something to distract people from their own scandals.

Or it may indeed be just coincidence. The received wisdom now does seem to be that Syria and Israel have been trying to get talks going for a long while. And if they really wanted to, points out a friend of mine who follows Syria, it should be a piece of cake compared to negotiating Israeli-Palestinian peace.

The prices are well-known: Syria wants all of the Golan back to the June 4, 1967 border. Israel wants Syria to cut ties with Hizbullah, Hamas and Iran, though that will be harder to verify. Other issues like water rights are tricky but basically soluble.

The main problem I see is that even if Olmert and Assad are both totally serious, it doesn’t depend only on them. Syria wants the West to welcome it back into the community of nations. That gift is in the hands of the Americans, first and foremost, and they don’t believe Syria will play by the West’s rules. Perhaps more to the point, Condoleezza Rice has invested all her efforts in Israeli-Palestinian peace, which she claims is “the most mature track” (mature to the point of decomposition, if you ask me) and she doesn’t want to see her hard work and her legacy as secretary of state go down the drain. So even if Olmert is ready to give up all of the Golan, he can’t in fact give Syria what it wants.

Update (May 23): An Israeli lawyer is demanding that the attorney-general open a criminal investigation into Olmert for launching the peace talks without government approval. The news report I linked to isn’t quite accurate: it says no citizen may discuss the transfer of sovereign territory to another state. The lawyer’s letter, provided by the Israel Resource Review which published the report, cites a section from the 1977 penal code that forbids any citizen from, in his words, “an act leading to the removal of any area of land from the sovereignty of the state or its coming under the sovereignty of a foreign state,” unless the government approves it. According to him, launching peace talks without a cabinet decision, which seems to be what Olmert has done, comes under this rubric.

Of course, Olmert will only have committed an offence if his decision leads to land under Israeli sovereignty being transferred to Syria. If the peace talks go nowhere he’s not guilty. And I’m no lawyer, but I’m not sure that land occupied in wartime and not internationally recognised as part of your territory counts as land under your sovereignty. The things people waste their time on here…

I’m feeling pretty cynical about the Bush visit, and not just because getting around Jerusalem has been impossible (again). Akiva Eldar’s diatribe—“Bush is an accomplice to an offence far worse than all of the criminal offences of which Olmert is suspected combined”—was a shade harsher than I would allow myself, but his despairing assessment of the peace process and Bush’s non-contribution to it is right on target.

Which meant that listening to Olmert’s speech of welcome at the conference hosted by Shimon Peres, I found myself adding subtitles sotto voce:

“President Peres… Your ardent dedication to Israel throughout its 60 vibrant years is unmatched, while your rich experience and leadership provides us all with guidance and fills us with hope for the future.”

You never give up, you old has-been. You fill me with hope – hope that I don’t turn into such a perennial loser.

“It gives me great pleasure to offer a special welcome to the President of the United States of America, George W. Bush—a great personal friend whose commitment to the State of Israel is immeasurable.”

You’ve taken three days out of your last year in office to party here with the presidents of Poland, Albania, Togo, Burkina Faso and Palau. You must really have bugger-all to do back in Washington.

“You are an unusual person, you are an unusual leader and you are an unusual friend of the people of Israel.”

I’ve met some freiers in my time, but you take the biscuit.

“Our countries represent different peoples, but they have kindred souls… Our core beliefs, our founding values and our aspirations are all drawn from the same inspiration.”

Remember–it’s us versus them. The good guys against the crazy Muslims. I know we’ve got some religious nut-jobs too, but hey, you do the God stuff yourself, you know where that comes from.

“Relations between our countries have evolved into a joint vision and are based on a deep understanding of the invaluable benefits of close cooperation.”

We’ve dug ourselves into the same deep hole. So get out the chequebook already.

“With full confidence I say that the United States under your leadership represents the pinnacle of this friendship.”

And you’ve dug the deepest. Boy, would I hate to be in your shoes.

“Israel is and must remain capable of securing its own future, relying only – and I repeat again, at the end of the day – only on ourselves for our protection. But everybody in Israel knows that we can always depend on our greatest ally in the world, the United States of America, when navigating the geo-political challenges of the future.”

Don’t ever — and I repeat again, ever — tell us what to do. But when we come asking for help, you better give it or else those lobby people will be on you like a ton of bricks.

“Israel continues to actively seek peace with its neighbors, especially with the Palestinians. We are making great efforts and seeing progress on this front, which we believe, with continued dedication and labor, will come to fruition…”

We’re on the case, okay? So as I said, quit leaning on us…

“In addition to strong diplomatic relations, an integral element of the close cooperation between our countries is the dedication of the Jewish communities and the numerous Jewish organizations in America. I thank you for your efforts and know that you will continue to play a key role in preserving our special relations.”

…or else.

“Israel’s founding generation could only have dreams of achieving a state as advanced and spectacular as we have today. As one Jewish people, one Jewish nation, we must continue with the same vision, the same energy, and the same passion for developing our country, our homeland, as our forefathers had, so that we can implement our inspiring vision for the future.”

Our grandparents showed up here with nothing, and look what they created. Now we’re so busy fighting each other, never mind the Arabs, that we’re on a straight line to trashing it all.

“Mr. President, in 2004 you said that America as a ‘nation is stronger and safer because we have a true and dependable ally in Israel’.”

You must have been on drugs. Frankly, you need us as an ally like you need a hole in the head.

“Today I say to you Mr. President, Israel is stronger and safer because we look to the future, and we know that the United States of America will always remain our closest and most dependable ally.”

But hey, we’re not complaining. Like I said, get out the chequebook.