Jim Lederman, the longest-serving active foreign correspondent in Jerusalem, is the author of Battle Lines: The American Media and the Intifada (Henry Holt, 1992).
Agreements that Israel has signed with Egypt, Jordan, and the Palestinians stir visions of genuine regional development. So far, however, the news reports tell only of such massive but financially questionable civil-engineering projects as a seawater canal to the Dead Sea, currently estimated to cost $12 billion. The real economic opportunities, in fact, lie elsewhere, in seemingly mundane -- but also more useful -- infrastructure schemes.1 These areas of potential Arab-Israeli cooperation deserve exploring in some depth both for their economic value and as ways to reinforce the peace process.
THE MORE THE MERRIER
Agreements Israel has so far signed with its Arab neighbors all share one common element: they are bilateral pacts. These have the advantage of getting things done and so giving Arab-Israeli peace a push. At the same time, bilateral agreements are extremely fragile, standing on their own like tall streetposts anchored by only two bolts. Those bolts are subject to the corrosion of distrust, of sheering by political vandals, and of structural weakening from neglect and fatigue. The pole may give off great light but it is vulnerable to the tremors of diplomatic necessity and the ill winds of political change. For example, when Israeli forces invaded Lebanon in 1982, Cairo froze all talks on cultural and other relations. A rash of terrorist attacks by Palestinians in late 1994 and early 1995 prompted Prime Minister Yitzhak Rabin to prohibit workers from the West Bank and Gaza to work in Israel.
The only hope for long-term Arab-Israeli stability lies in multilateral economic agreements, for these create new self-interested political and commercial coalitions biased toward maintaining the value of investments--and thus the peace process itself. This broad-based lobby then helps the governments resist sabotage by extremists.
Joint projects to develop infrastructure are the most suitable multilateral projects, for these create interdependence. Also, because regional services have a long life span, discussions about them provide an insight into the intentions and goals of each party. They indicate the degree to which the notion of a regional commonwealth has taken root in the Levant. And they are the necessary first step to generate higher profits and to increase efficiency. According to the Israeli Chamber of Commerce, Israeli-Arab trade currently amounts to some $200-500 million per year--much of which passes through offshore middlemen.2 This is a fairly small number that will not grow appreciably until the infrastructure is in place.
Regional cooperation should be easiest to achieve in four areas: electricity grids, fuel pipelines, road transport, and telecommunications.
The proposal to create a regional electricity grid offers perhaps the best example of politics' delaying economic advancement.
Over the years, Israel and its neighbors each created its own, independent electricity generation and distribution system. This led to two problems. First, inadequate reserve generating capacity and outdated distribution networks cause shortages, with resulting brownouts and cutoffs. In parts of Syria, these often go on for eighteen hours a day. Secondly, the systems are wasteful, for each country has to keep 20-30 percent of its power generation available as reserve generating capacity to cope with such matters as routine maintenance and sudden breakdowns.
Israel's signing political agreements with Egypt, Jordan, and the Palestinians caused technicians on all sides to hope that a regional electricity grid could rapidly be established. It would have a precedent: in 1989, Turkey, Iraq, Syria, Jordan, and Egypt signed an agreement to connect their grids. In 1996, Egypt's system will be connected to Jordan's via a $70 million cable from Taba to Aqaba, while Turkey is in the process of running new high-tension lines from the Euphrates dams projects to northern Syria.
Currently, Egypt has a peak generating capacity of about 12,090 megawatts (mW).3 Israel can generate 6,330 mW. Jordan is capable of 1,100 mW. The West Bank and Gaza use about 250 mW but produce virtually no electricity on their own; instead, nearly all of their consumption comes from Israel. Estimates see usage's growing by 9-10 percent per annum in Israel, and about 6 percent per annum in Egypt and Jordan. West Bank and Gaza growth is difficult to estimate, for two main reasons. Palestinian usage varies widely from month to month depending on demonstrations, closures, or euphoria (demand rose by 25 percent in the weeks after Yasir Arafat's arrival in Gaza). Also, the 118,000 Israelis resident in these areas use ten or twelve times as much electricity per capita as do the approximately two million Palestinians; were the Israelis to leave the territories, usage would significantly drop.
To increase their individual generation and distribution capacity, Egypt, Israel, and Jordan have since 1990 embarked on ambitious programs. Egypt is building two gas-fired 300 mW steam generators at `Ayn Musa in the southern Sinai. As part of its plan to double generating capacity by the year 2005, at a cost of $10 billion, Israel is adding two new units (350 mW and 550 mW) to its Ashkelon facility, six generating units on a newly acquired site near Ashdod, and 115 mW gas-turbine generators further inland. Jordan intends to double the capacity of its Aqaba power station by adding two more 130 mW generators.
This growth in capacity is accompanied by fiscal waste, as an internal report commissioned last year by the European Union (EU) (and made available to this author) indicates. Were the three grids linked, the amount of reserve capacity required by each country would go down by more than 20 percent. Also, linking would bring savings by permitting the transmission of power over shorter distances; Eilat can get electricity much more cheaply from Aqaba, its immediate Jordanian neighbor, than from the Mediterranean coast. Indeed, the two governments reached an agreement to build an electric line to connect Aqaba with Eilat, a small but symbolically significant deal.
A connection between Israel and Egypt would obviate the need for Egypt to build more than the two 300 mW steam generators now under construction; or Israel could delay the construction of one of the 575 mW generators now planned. A deal between Israel and Jordan would eliminate the need for a 130 mW unit in Jordan. Savings to all three parties (exclusive of the start-up costs of building new power lines, switching stations, and transformer stations to connect the grids) is currently estimated at about $1 billion.
Political snags have obstructed these plans, however. Note what happened at an unpublicized meeting at Aqaba in December 1994, when EU and American representatives met with their Egyptian, Jordanian, Israeli, and Palestinian counterparts to discuss financing and building a regional electricity grid. The Egyptians proved less than cooperative, refusing to rewrite the five-country agreement to include Israel and insisting on going ahead with an underwater cable connecting Taba with Aqaba, bypassing Israel. Using the overland route through Israel would save Egypt about $45 million, but the Egyptians presumably worried more about other matters: that were Israel involved, Saudi banks would withdraw from the project; recently warming relations with Syria would cool off; and the cunning Israelis would take advantage of credulous Egyptians. Palestinians sought at the December meeting funding for a ground-up reconstruction of the electricity grid in Gaza and the West Bank. As in other cases (a seaport and international airport in Gaza), Arafat showed his propensity for grandiose public projects at the expense of more basic and viable public enterprises (such as sewage systems).
II. FUEL PIPELINES
The sale of Egyptian natural gas to Israel and the Palestinians makes obvious economic sense. Gas fields off the Nile delta in the Mediterranean are too large for Egypt to use alone and too small to warrant the expense of setting up liquified natural-gas installations. Nearby, Israel offers an inviting market for the gas. A natural-gas pipeline could be built across the Sinai, skirting the Gaza Strip (to allay Israeli security concerns), into the Negev desert, and thence to the rest of the country, costing Israel about $800 million and Egypt $500 million. Branch lines could then be laid into Gaza, where the dense population makes the laying of underground natural-gas pipelines into homes a viable proposition, and into Jordan (though Jordan's reliance on very cheap Iraqi oil makes such a project not viable at present).
Israel could commit to buying an annual minimum of 2.5 billion cubic meters of natural gas from the Egyptian wells for the next twenty years, for its energy requirements are growing significantly. Dan Shilo of the Israel Ministry of Energy notes that depending on the final price (probably between $2.50-3.00 per million BTU), the pipeline would initially carry gas worth between $300-400 million per year to Israel alone, and this amount could double or triple within a quarter century.
This deal is especially attractive when one looks at the Israeli shoreline and sees how little room remains for new coal- or oil-fired steam-generating plants. Once the current program for constructing relatively cheap, coastal, seawater-cooled generation plants is over, all new facilities will have to be constructed inland (and inland generating capacity costs more due to the high expense of cooling water prior to reuse). The only economically viable alternative is combined-cycle gas turbines. Depending on the price paid for the natural gas, these generators are an attractive alternative to other types of plants.However, unless cheap gas is available, they must be run on expensive diesel fuel and are not cost-effective except in ultra-peak emergencies.
A proposal now on the table calls for that portion of the pipeline in Egyptian territory to be owned by a consortium of the Egyptian National Petroleum Company (34 percent), Amoco (33 percent), and Agip (33 percent). A new government-owned corporation would own and build the Israeli pipeline. International funding is available and a stock floatation would probably bring in the rest of the necessary funds. Technically, everything appears set to go.
The talks, however, have stalled. The Egyptians initially promised to make a final decision by late January 1995, but they then claimed a need for more time to assess the size and quality of the delta gas fields, and have an announced deadline of December 1995. At this point, it is not clear when an Egyptian decision will be forthcoming. Israelis believe the delay results from at least two factors: Egypt's desire to bargain for the highest price possible, and the recent cooling of diplomatic relations with Israel. On Israel's side, its request for a U.S. government guarantee for deliveries of diesel fuel in the event that Egypt welshes on the agreement may also delay progress on the pipeline. This guarantee is critical for Israel, for lacking such a pledge, its security could be severely affected in times of emergency. Lastly, the Palestine Authority (PA) has entered into preliminary discussions with the Egyptians to purchase natural gas, and this too could delay the proceedings.
III. ROAD TRANSPORT
Road transport offers the cheapest infrastructure projects, for basic asphalt highways already exist; what is needed are efficient connections and some expansions.
Four new major arterial roads are now under discussion: (1) A ring road around the Israeli port city of Eilat, connecting the southern Sinai with Aqaba in Jordan. The existence of such a road is essential to tourism planners' dreams of a three-country "Red Sea Riviera." (2) A highway linking the northern Sinai and Karak at the southern end of the Dead Sea in Jordan. This presents the fastest and safest land route between the Nile Delta and the Arabian Peninsula. Such a highway would also avoid the bottlenecks and security dangers inherent in the current route via Rafah and the Gaza Strip. (3) A new or expanded highway from Jerusalem to Amman, designed primarily for tourists and civilian traffic, not goods. Goods would go by a parallel route formed by upgrading the current highway from Tulkarem via Nablus and the Damiya Bridge. (4) A major roadway from Irbid and Mafrak in Jordan, via Israel's Beit Shean valley to the Mediterranean port city of Haifa. This route would handle two to three hundred trucks a day and would cut the cost of transportation of imports to Jordan from Europe by an estimated 15 percent.
Syria's control over Lebanon, and its ability to block the passage of goods through Lebanon to Syria and Turkey, renders a fifth route temporarily impossible: a re-creation of the ancient Via Maris leading from Alexandria to Beirut on the Israeli coastal plain. Mention of the Via Maris brings up an interesting point: all of these routes retrace paths on which trade has moved for millennia. They enjoy, in other words, the silent testimonial of many generations.
At the same time, each of the four avoids the vastly overcrowded highways in the center of Israel, and they would be interconnected by the existing north-south highway running through the Jordan rift. The routes are not without problems, however. While the Jordanians are eager for the completion of negotiations so that a deal can be achieved soon, the Egyptians once again are dragging their heels. Jordan and Egypt have competitive, not complementary, economies, so trade between the countries is minimal; traffic in goods between Egypt and Jordan would probably not exceed 20,000 tons per annum for the next ten years.4 Also, to make this trade viable, the Egyptian authorities would have to drop their policy of demanding "back-to-back" transport (that is, each truck moving between Egypt and Israel must be unloaded at the border and the goods transferred to a truck licensed in the other country).
In Israel alone, Otniel Shneller (the Israeli Ministry of Transport's chief negotiator) estimates this road system would cost at least "hundreds of millions" of dollars, and probably more than $1 billion.5 Take the fourth road: currently, a poor-quality, narrow, two-lane highway connects Beit Shean to Haifa. Nonetheless, the Israel Ministry of Transport considers the investment financially worthwhile and sees it easily incorporated into current efforts to upgrade the country's road network. Improving the four roads in Jordan would cost in the neighborhood of $500 million, but here too, international loans should be available and roads would pay for themselves relatively rapidly--especially if Jordan were to become the primary transit route for Israeli shipments to the Persian Gulf states.
In addition to making life easier for tourists wanting to visit all three countries during a short trip, the Eilat ring road would permit Egyptian pilgrims going on the hajj to Mecca and Egyptian workers heading to the Persian Gulf the convenience of traveling entirely by land. Several problems arise, however. The Egyptian and Jordanian governments have an economic interest in maintaining the existing ferry line that links their two countries by going around Eilat. The Israelis, for their part, worry about the potential security problems that might arise when large numbers of Egyptians, including any number of fundamentalist Muslims, traverse Israeli territory. Another security issue is the arrival of sealed containers destined for Jordan. Documentation remains a tricky issue as long as Jordan remains under a partial international blockade to prevent prohibited goods from reaching Iraq. Environmental and public-safety issues would also arise for Israel; Jordan has no vehicle-emission standards, and Egyptian trucks are renowned for their lack of maintenance. Israel's green lobby has already marshalled its forces to oppose any road-transport deals until extensive impact studies can be completed. None of these problems, however, is insuperable.
While the Levant presents great opportunities for telecommunications, politics delays joint projects. The question of regional telecommunications development is a microcosm for each country's attitudes toward the peace process and toward regional development as a whole. Telecommunications markets in the Levant break down as follows.
Egypt. With only 2.5 million lines, the government monopoly has a penetration rate6 of just 4.5. Part of the system is relatively modern. 60 percent of exchanges are digitalized; but there are only about 10,000 cellular phones. Egypt has resisted overtures about joint-operating ventures for reasons of economic nationalism. After issuing an international tender to install a large cellular-telephone system, Cairo then withdrew the tender in the hopes of creating a purely home-grown system. This withdrawal received considerable coverage in the trade press, making potential future foreign partners leery of bearing the cost of preparing prospectuses.
Israel. As in Europe, the penetration rate reaches about 40 percent, with the number of lines increasing by 10 percent per annum; 75 percent of the exchanges are digital; as of December 1995, cellular telephones numbered over 435,000. Israel is connected to Europe by three cables, and in 1996 will launch its first home-grown telecommunications satellite. Having virtually saturated their limited home market, Israelis are branching into such countries as Hungary, Poland, China, and India as equipment suppliers and operators.
West Bank and Gaza. Penetration is only 2 percent but almost all exchanges are digitized. There are long waiting lists to have telephone lines installed. The network in Gaza is underdeveloped and highly dependent on Israeli services. Development depends on three main factors: investment funds; how much the PA intervenes in the day-to-day affairs of the newborn telecommunications authority; and negotiations with the Israelis on the allocation of radio spectra and international connections. Progress would be more rapid if not for Arafat's twin priorities of cutting the fiber-optic umbilical cord to Israel and centralizing this matter in his own hands (he personally signs off on each telephone line accorded Gazans).7
Jordan. Jordan is the most assertive of Israel's neighbors about developing a communications network, especially since the peace treaty between the two. Penetration is now 7.8 percent. Growth in domestic subscribers is now estimated at 20 percent a year. Several months ago, Motorola struck a deal with the Jordanian authorities to operate a cellular-telephone service. Jordanians view themselves as the transit point for data traffic between the Persian Gulf and the Mediterranean.
Jordan also offers an example of a universal rule: once telecommunications facilities are available, people use them. Prior to the treaty, calls between Jordan and Israel (including the West Bank) had to be rerouted through private companies abroad, a cumbersome and expensive process. Calls rerouted in this fashion are believed to have numbered 2-3,000 per week. The very first week after the signing of the peace agreement saw 25,000 calls between Israel and Jordan; by now, the number exceeds 50,000 calls a week transferred by two new pairs of microwave towers on the mountains overlooking the Jordan River. Negotiations with the Israelis on joint development of international lines are proceeding apace.
Lebanon. In Lebanon, there are 12.5 lines per 100 people, and 75 percent of the exchanges are digital. In April 1993, the Lebanese government signed a contract with a French-based consortium for the development of a million lines and the installation of a broad cellular-telephone network. In telecommunications, as in so many other economic fields, Lebanon is in the process of becoming Syria's Hong Kong--a gateway to the world for an otherwise closed society.
Syria. Penetration is only 4 percent and a bare 30 percent of exchanges are digitized; there are no cellular phones. The Syrian government continues to view telephone and data-transmission services primarily in terms of security interests and as an integral part of the government's control apparatus. Until recently, one needed a special license to own and operate a fax machine. However, the authorities have embarked on a program to increase connections with Lebanon as well as to lay an underwater fiber-optic cable to Cyprus.
At a multilateral meeting late in 1994, the Israelis proposed an economically viable project: to add to the two land-laid fiber-optic cables connecting Israel with Egypt by running a fiber-optic cable from Egypt along the eastern Mediterranean coast to Turkey; from Turkey, branch lines already exist to transmit calls to Europe and the Asian republics of the former Soviet Union. The entire Levant could tap into the line. But Cairo's continued political coolness toward Israel has led it to ignore this proposition, a reluctance that probably results in part from fear of competition from the Israelis for the right to create what will be the regional hub for data transmission. Also, Egypt wants to protect its geographical primacy on the Sea-Me-Two cable that runs from Europe to the Far East via the Suez Canal.
THE ISRAELI GIANT
Unlike Europe, North America, and East Asia, where regional economic cooperation is viewed as a necessity, the Levant's economies (with the exception of Israel) have remained competitive rather than complementary. Their primary common products include fossil fuels and their derivatives; agricultural goods; and low-wage manufactured items, such as textiles and leather goods. Further, for all the Arab League's talk about pan-Arab regional cooperation, virtually every state in the area is an economic island unto itself--jealously guarding its economy behind a barricade of restrictions. At present, intra-Middle Eastern trade amounts to just 5-7 percent of the collective gross national product (GNP).
In contrast, 36 percent of Israeli products are designed for export. The Arab boycott had the unintendedly beneficial effect of forcing Israeli firms actively to seek markets worldwide. A highly educated population and a shortage of water for growing crops has also encouraged a concentration on high technology. Today, Israel invests more than 3 percent of its GNP in research and development--a level higher than any of the advanced industrial economies belonging to the Organization for Economic Cooperation and Development. Sixty-two percent of private-sector research-and-development investment is in such fields as computer programming, electronics, telecommunications, and electro-optics.
This disparity between Israel and its neighbors leads to problems. With a per capita GNP eleven times that of Egypt or the West Bank, and the gap growing wider each year, Israel's buoyant economy and aggressive marketing abroad inspire Arab fears of regional economic hegemony. Actually, Israelis offer little threat to their neighbors, simply because their current investment priorities are different. Israelis are moving away from traditional low-wage, labor-intensive industries to capital- and technology-intensive manufacturing plants. By virtue of deals Israelis have arranged through third parties, especially American and Lebanese companies, they have already broken the boycott and sell almost as much as the neighboring Arab states can absorb of its high-bulk, low-margin products (such as salt and edible oils) and its high-cost manufactured products (such as computerized drip-irrigation systems).8
Jordan is unique in that, unlike the other Arab states (which are alarmed at Israel's relative economic strength), Amman would now like to ride on the Israelis' coat-tails. For example, Jordanian businessmen are trying to position themselves as warehousers and distributors of Israeli products to the Persian Gulf states. In contrast, Egyptians cling to the idea of maintaining their position as primus inter pares in the Arab world--even when this dream conflicts with economic development. The Palestinian Authority is at present so disorganized and centralized in the hands of Arafat that it is incapable of taking advantage of the opportunities offered it by the West. The Syrian government is terrified of giving up its economic instruments of domestic control and has yet to invent a mechanism that would replace the current systems in use. Any mention of opening up its frontiers to modern market forces sends vested interests, especially corrupt government officials, into the political bunkers.
CHANGES NEEDED IN THE ARAB COUNTRIES
Successful multilateral agreements will require a number of changes and concessions by the participating parties.
Investment. Analysts estimate that Israel's neighbors have five years in which to attract large-scale foreign investments in telecommunications. Governments in Egypt and Syria must reassess their policies or face the risk that international companies will skip their countries, hurting investments. The PA is anxious to develop its system but lacks both financing and a commercial legal structure that would protect foreign investments. The authority is seeking outside assistance but is having problems because of the political instability in Gaza and its unwillingness to give up control to market-oriented foreign companies. Egyptians and Palestinians claim to seek foreign investment, yet they have done virtually everything possible to deter foreign capital. The EU has tried to push the process along by paying for consulting services and feasibility studies. Once conducted, however, the reports go nowhere in Egypt and Syria.
Cooperation. Government-sponsored infrastructure projects have been under discussion for more than a year but have not proceeded because, other than Israel and Jordan, potential partners have been getting in the way of progress. The Palestinians use the talks as a lever to extract money from donor countries. Syria has avoided any discussion of joint projects and kept Lebanon out as well. Egypt, despite its public face as a facilitator of the negotiations, has acted as a spoiler. To be sure, Cairo has lifted some restrictions on contacts between Egyptians and Israelis--especially travel between Cairo and Tel Aviv9 -- but little more. Medium- and long-term cooperative projects remain firmly placed on Cairo's political back burner.
While Israel has the region's most advanced infrastructure, it also has the highest wages and real estate prices. Egypt has the lowest wages and land costs, but also the most restrictive and red-tape-laden economy. Jordan has low wage rates and a liberalizing economy but lacks capital. In brief, the parties need each other and can complement each other. Only through the creation of a strong, interdependent regional framework will Israel's neighbors develop economically to cope with burgeoning birthrates and attract meaningful foreign investment. Infrastructure projects offer not just good business opportunities; they are also political and symbolic ties that send important signals to potential foreign investors.
Regional interdependence is a necessity for all parties if their standard of living is to rise. Even Israel cannot ignore its neighbors' economic distress. It needs strong economies in its neighboring countries if terrorism and political fanaticism are to be controlled. Its neighbors may have more to gain in purely domestic economic terms from multilateral coordination, but Israel has as much to gain in terms of regional political stability. Poverty gives Arab political extremists on the right and the left a field day. Their activities lead not only to domestic unrest but possibly to future wars as jealousies created by disparities in national wealth-accumulation increase. For example, the Bank of Israel shows that Israel's GDP per capita is growing at an average rate of 6.2 percent per annum. The Central Bureau of Statistics estimates growth in 1995 at 6.8 percent. In contrast, a very high birthrate means that Egypt's GDP per capita, according to International Monetary Fund figures, has fallen over the last five years--and this despite increases in oil output.
The challenge, therefore, is how to overcome decades of entrenched interests by state-owned companies in Egypt that are resisting any change; self-protective private interests in Jordan that oppose any alteration in the status quo; and the military-governmental bureaucracy in Syria that is terrified of losing its current prerogatives and power.
To overcome these domestic problems will require genuine political courage and a willingness to re-educate mass populations to give up their old fears and suspicions. Only Jordan's government has embarked on a course of real political and economic reform, both domestically and regionally. If Egypt and Syria do not do the same, the regimes may be sowing the seeds of their own undoing.
IMPLICATIONS FOR THE WEST
Governments. The creation of multilateral networks will not be an easy task, and it will take considerable time. A few states -- Morocco, Tunisia, Israel, Jordan, Oman, and Qatar -- have broken with old ways, but the others are carrying too much political baggage to move into the new world of interdependence. International mediation could play a significant role in fostering regional networks.
The EU has very aggressively pushed regional political and economic cooperation between Israel and its neighbors. It hopes to follow up on its feasibility studies; not surprisingly, a very large percentage of the businessmen who accompanied Germany's Chancellor Helmut Kohl to the Middle East in June 1995 are involved in civil engineering and transportation.
In contrast, the U.S. government seems biased against multilateral agreements because they are lengthy, messy, unsexy, and difficult to negotiate -- except where direct American interests (GATT, NATO, NAFTA, and others) are involved, and they are not involved in the Levant today. The current congressional mood against direct foreign aid adds to Washington's preference to act as "gavel-holder" in multilateral agreements rather than as an active facilitator.
Nonetheless, the United States has an important role to play. It could help in three areas especially. First, it should continue its involvement in trying to create a Middle East development bank, the first institution potentially to link the economy of the whole area from Mauritania to Oman. Secondly, it could encourage Cairo to view medium- and long-term regional projects more positively. Thirdly, its provision of soft loans for regional development would help ease the cost for participating parties.
Investors. The current situation offers significant opportunities to foreign investors and suppliers. The entire Levant needs major investment in its physical infrastructure, and aid from such governments as the EU, the United States, and Japan is inadequate for the tasks at hand. The Confederation of Egyptian Industries has estimated that Egypt requires $20 billion of investment to upgrade and update an obsolescent industrial base dating back to the Abdel Nasser era. Israel is undergoing a profound industrial high-tech revolution whose capital requirements go well beyond Israel's current capabilities. High-tech investments, for example, now cost more than $1 million per employee.10 Jordan lacks the money even for feasibility studies -- such as how to develop its Gulf of Aqaba coastline for mass tourism.
As foreign investors look at the Levant, they should examine the degree to which the authorities there are working to make their economies more efficient -- and thus lower the cost of doing business -- through mutual cooperation in major infrastructure projects. If progress is made, investors should consider making significant investments in the area.
1 Many of these are described in an Israeli government publication, Development Options for Cooperation: The Middle East/East Mediterranean Region, 1996, version IV, Aug. 1995.
2 Ha'aretz, May 26, 1995, pp. 18-24.
3 The figure for Egypt's generating capacity should be regarded with some caution, since down-time due to maintenance problems is far higher in Egypt than the Western or Israeli average.
4 This minimal trade helps explain, in part, why Amman is more concerned about trade with Israel than with Egypt; and in helps understand the bitter public exchange between King Husayn and Egypt's Foreign Minister `Amr Musa took at the Amman Conference in October 1995, when Musa accused Husayn of pursuing the peace process too quickly.
5 Telephone interview, Dec. 1994.
6 In telecommunications jargon, "penetration" refers to the number of telephone lines per 100 people in the overall population, permitting a standard by which telecommunications systems can be compared worldwide.
7 Arafat's tight control over all monopolistic government services in Gaza has been a running theme in reports by all the East Jerusalem Arabic-language newspapers for the past year. On these, see Oxford Analytica Daily Brief, "Middle East/Palestinian Strife," Nov. 25, 1994; and The Los Angeles Times, Sept. 28, 1995.
8 Ha'aretz Weekly Supplement, May 26, 1995, pp. 18-24.
9 In Nov. 1994, seventeen years after Anwar as-Sadat's trip to Jerusalem, they finally agreed to establish a direct bus route between Cairo and Jerusalem. (A bus route linking Cairo and the less politically sensitive city of Tel Aviv has been operating since the signing of the peace agreements).
10 Intel's recently announced $1.6 billion plant employs 1,500 workers; Motorola seeks to set up a facility for 900 workers that will cost $1 billion.