IN A GLOBAL CONTEXT
Sous la direction de
Raphael BAR-EL Ehud MENIP AZ Gilbert BENHA YOUN
REGIONAL COOPERATION IN A GLOBAL CONTEXT
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Gilbert BENHA YOUN et Steve BAZEN (sous la direction de), Salaire minimum et bas salaires, 1995, 440 p. Christel ALVERGNE, Vingt-cinq ans d'évolution territoires français, 1997, 208 p. de l'industrie et des
Antje BURMEISTER et Guy JOIGNAUX (sous la direction de), Infrastructures de transport et territoires - Approches de quelques grands objets, 1997, 320 p. Gilbert BENHA YOUN, Maurice CATIN et Henri REGNAULT (sous la direction de), L'Europe et la Méditerranée: intégration économique et libre-échange, 1997, 192 p. Jean BERNARD et Maurice CATIN (sous la direction de), Les conditions économiques du changement technologique, 1998,302 p. Gilbert BENHA YOUN, Nathalie GAUSSIER et Bernard PLANQUE (sous la direction de), L'ancrage territorial du développement durable: de nouvelles perspectives, 1999, 352 p. Gilbert BENHA YOUN, Nathalie GAUSSIER et Bernard PLANQUE (sous la direction de), Économie des régions méditerranéennes et développement durable, 1999,208 p. Maurice CATIN, Jean-Yves LESUEUR et Yves ZENOU (sous la direction de), Stratégies, concurrence et mutations industrielles, 1999,300 p. Jean-Pierre GILL Y et André TORRE (sous la direction de), Dynamiques de proximité, 2000, 302 p. Pierre-Henri DERYCKE (sous la direction de), Structure entreprises et marchés urbains, 2000, 240 p. des villes,
Olivier GUYADER, Évaluation économique de la régulation des pêches, 2000, 368 p. Raphael BAR-EL, Ehud MENIPAZ et Gilbert BENHA YOUN, Regional Cooperation in a Global Context, 2000, 320 p.
Regional cooperation in a global context: some general remarks
Raphael Bar-El, Ehud Menipaz and Gilbert Benhayoun
During the second half of the past century, a fundamental shift has occurred in the world economy. It has been moving progressively further away from a reality in which national economies were relatively isolated from each other by barriers. In turn, the world has been moving towards cross-border trade and investment by distance, time zones, and language; and by national differences in government regulation, culture, and business systems. Countries have been moving toward a world in which national economies are merging into an interdependent global economic system. This phenomenon has been commonly referred to as globalization. The trend toward a more integrated global economic system has been paralleled by the creation of bilateral and multilateral preferential agreements. These agreements have been struck by nation states in close geographic proximity to each other. They were an extension of regional cooperation arrangements. They were intended to overcome social, cultural, political and geographic discontinuities in order to benefit the nation states that constitute the regions. The trend towards regionalization has been apparent for many years, and gave way to the creation of the European Union, NAFT A, ASEAN and other wellknown regional agreements. The dawn of the new millennium presents governments, business organizations and academe with the challenge of regional cooperation in a global context. The countries surrounding the Mediterranean Basin were always parts of a natural region, mainly through the sharing of a great waterway, the Mediterranean Sea. However, political, social, cultural and geographic discontinuities were created over two millenniums. These discontinuities should be dealt with so as to allow the Mediterranean Basin countries to take advantage of the globalization
Regional Cooperation in a Global Context
of the world economy and to create a sustainable regional competitive advantage. In order to help map out the ways to reduce the consequences of discontinuities, the barriers and facilitators of cooperation should be identified. Furthermore, the nature and role of the organizations that should enhance and forge regional cooperation must be clarified. 1. BENEFITS AND CONSTRAINTS OF REGIONAL COOPERATION 1.1. The potential benefits of regional cooperation The cooperation between countries in a same region may in principle be beneficial to all parties involved. The benefits of cooperation may be a consequence of different factors at different conditions. Some of the factors that are most prominent in the various analyses performed in this book may roughly be classified in two groups: those that are related to economies of scale, and those that are related to complementarities.
1.1.1. Economies ofscale
Cooperation between various countries in a region may create benefits as a consequence of the ability to act on a wider scale: 1. Cooperation in manufacturing allows for bigger and more efficient industrial plants. 2. Cooperation in trade allows for wider consumer markets. 3. Cooperation in labor force (through improving mobility and access) may allows for a more efficient allocation of workers by providing wider supply options (higher level of access of labor force to a bigger variety of employment options). 4. The higher efficiency of allocation of workers may also be a result of the creation of wider demand markets (higher level of access of employers to a wider variety of skills). 5. Large-scale projects may be more efficient ifthey serve more than one country: this is the case for a joint airport, for a joint treatment of ecological problems in adjacent regions, for a joint tourist package that offers a wider variety of attraction types.
Cooperation may permit the achievement of higher levels of efficiency as a result of the ability to use complementing factors from various countries: 1. One country may be able to provide larger amounts of skilled labor force in a joint project, while the other country may be able to provide higher quantities of capital, or of technology, or of Inarketing abilities. 2. A Inore efficient distribution of water may be achieved by a cooperation in this field aimed at the allocation of water in different regions of each country, from the nearest sources, independently of the country of origin of the water, and given the overall agreed distribution. 3. Cooperation in industrial production may take the form of the distribution of Inanufacturing supply chains (backward and forward linkages) between countries, where each country specializes in the segments in which it is most efficient. 4. Cooperation in tourism, besides the advantages that result from scale economies, Inay also offer complementarity benefits, such as the ability to visit highly attractive places in one country, and use lower cost lodging facilities in another country. 1.2. The limits and conditions of cooperation Taking advantage of all the potential benefits of regional cooperation is not always possible: the synergy of the joint action between different countries or regions depends to a large extent upon the prevailing conditions. In some cases, the conditions may impose a IÏ1nit to the potential benefits of cooperation, in other cases, such conditions Inay even inhibit any cooperation. An Ï1nportant factor may be the existence of significant differences between the levels of economic development in the countries involved, or between the economic structures. Open economic borders between two countries with a significant difference in the development level Inay bring strong benefits to the stronger country at the expense of the creation of a dependence of the weaker country, and probably creating a higher gap between the countries.
in a Global Context
The Euro-Mediterranean experience after the Barcelona conference has shown that a Inore open economic relationship did not lead to a significant growth of the "Southern" side of the Mediterranean. Actually, the inequality level between the South and the North of the Mediterranean has probably increased. In the Middle East, one of the Inajor risks of full regional cooperation may be the evolution of an "economic colonization" process. In the Mediterranean, there is already a clear dependence of the North African economies upon those of the West European economies. Differences, or siInilarities in economic structures of countries Inay also have a strong influence on the potential for economic cooperation. It is a well-known fact for example that the trade between Arab countries in the Middle East is almost insignificant. So is the trade between the countries in Southern side of the Mediterranean. The prospects for the development of international trade may be higher at the "inter-regional" level than at the "intra-regional" level. Another group of important factors includes cultural differences, historical relations and tensions, psychological attitudes, and differences in political and economic regimes. A full economic integration between a completely free market regime and heavily centralized regime is of course impossible. Even more restricted forms of economic cooperation may be hardly feasible or beneficial in the absence of some harInony between the prevailing political and econOI11ic regimes in two countries. 1.3. A trade-off between regional cooperation and non-economic priorities Regional cooperation may actually be expected to improve significantly the economic achievements of all the parties involved. However, economic efficiency is not necessarily always an exclusive or even first priority target. There may exist a trade-off between regional cooperation and other important priorities in a country's policy, such as increasing security, keeping economic independence, protecting specific sectors, maintaining a political status quo. 1.3.1. Security considerations Those have lead in many instances to a restriction of free labor I110bilitybetween Israel and the Palestinian Authority. The gains of
free access to labor force from different countries or the gains from a wider market of jobs to workers may be constrained because of security measures, such as closures or quotas upon trans-border Inovements. In a broader sense, security considerations may limit the potential for regional cooperation in cases where the parties involved fear instability in political relations. Such considerations may impose serious constraints on cooperation in joint tourism projects, or joint business ventures.
Another iInportant trade-off is between economic growth resulting from regional cooperation and political economic independence. Cooperation in terms of the allowance of free Inovelnents of goods and of production factors actually decreases the level of involvement of governments in the economy, and leaves the determination of economic trends to free market. Such a situation may lead to much stronger economic dependencies between the economies, and to an apparent lower level of economic ruling by the separate governlnents. Even if we ignore the influences of such a situation when the parties possess unequal powers (see above), this may abolish sOlne of the sYlnbols of sovereignty of a country. An example is the importance that is attributed by Palestinians to sYlnbols of sovereignty, such as having their own maritime port, or their own international airport, independently of any economic considerations. Other important examples are the considerations regarding Free Trade Agreements or Custom Unions. Such types of cooperation Inay bring economic benefits to all parties (under given conditions), but seriously inhibit the ability of each country to adlninister its own separate policy. In this context, we can mention again the case of free mobility of production factors. The example of free mobility of workers between the Palestinian Authority and Israel shows a case where both parties could gain a higher level of economic growth. However, a situation where a high share of Palestinian labor force working in Israel (or in other countries) may increase the gap between GNP and
Regional Cooperation in a Global Context
GDP. In practical terms, this means the creation of a situation of an increasing welfare of the Palestinian population, together with a too slow building of an endogenous economic structure. Again, this is a situation of increasing dependence of one party on economic or political decisions taken by another party.
1.3.3. Sectoral interests
A trade-off may exist between regional cooperation and the objective of guarding the interest of specific sectors. Probably most well known is the case of the experience of Europe as well as that of Inany other countries, regarding the agricultural sector. Protecting the agriculture iInplies in many cases the imposition of significant constraints on cooperation programs. As an example, one recalls the Inaintenance of customs barriers on agricultural products as an exception to free trade agreements. Another example is the allocation of different levels of subsidies on water in different countries, which creates different water prices, and therefore imposes serious constraints on the ability of cooperation in this field.
The interests of specific regions in a country may also be contradictory to interests of cooperation. Most countries see as major objective the diminution of gaps between regions and adopt policies of support to poorer regions. The benefits of cooperation between two countries are not always coherent with the needs of the regions within the countries.
2. A SURVEY: SUBJECTIVE EVALUATIONS OF THE CONFERENCE PARTICIPANTS ABOUT PROSPECTS FOR REGIONAL COOPERATION A survey conducted prior to and during the Conference on Forging Regional Cooperation in the Mediterranean Basin dealt with these issues. The survey target population included two hundred thirty international experts (participants and non-participants) on regional cooperation. These experts were drawn from academic, government, non-government and business organizations and represented twentythree countries from four continents.
Preface 2.1. Barriers to regional cooperation
According the responses of the participants in this survey, there is no one, overwhelming barrier to regional cooperation in the Mediterranean Basin. Rather, there are a number of significant barriers; all of them must be dealt with in tandem in order to facilitate regional cooperation. Among the most significant barriers one finds (71% of all answers): political constraints (24%), economic considerations (23%), cultural (14%) and religious (10%) differences. Most interesting is the result that only 5% of the participants consider the lack of peace as the main constraint for regional cooperation. This does not of course mean that peace is not a necessary condition for cooperation (although there are many cases of a "hidden" cooperation between countries with no peace agreements between them). This finding does however emphasize the fact that peace is not a sufficient condition for cooperation, and that other variables should be considered. Other, less significant barriers that were mentioned (3% or less each) are: inequality, lack of trust, educational gaps, language differences, intolerance, technology gaps, bureaucracy, and leaders' Inyopia. Obviously, the likelihood of the success of any cooperation initiative depends on due consideration given to each and everyone of the aforementioned barriers. 2.2. The role of government and non-government organizations
A Inajor result of the survey is that national and regional governments, as well as non-government organizations playa significant role in overcoming barriers for cooperation in the Mediterranean Basin. Both national and regional levels of governments encourage or inhibit regional cooperation through political leadership, budgeting, law Inaking, etc. The European Community Parliament is a fine example of a regional government that encourages successful cooperation for decades. National business organizations (e.g. Boards of Trade, National Industrialists Organizations) facilitate cooperation through the harmonization of industrial standards, the initiation of legal codes of trade and like measures. Voluntary organizations help cooperation by promoting social, sport, cultural and other activities. To a lesser extent, the participants of the survey think there is a role
Regional Cooperation in a Global Context
for international organizations (e.g. United Nations agencies) and for international financial organizations (e.g. The World Trade Organization, The World Bank for Reconstruction and Development, The International Monetary Fund). 2.3. Levels of cooperation Free trade zone, economic union, monetary union, and political union Inay occur over time and facilitate regional cooperation in the Mediterranean Basin. However, as a prerequisite, the barriers to cooperation Inust be dealt with in order to reduce the uncertainty regarding the likelihood of success of such unions. In particular, one should address the myriad of political, economic, cultural and religious issues as stated in the aforementioned paragraphs. Responding to a question about the number of years that are necessary to achieve the different levels of cooperation, the participants in the survey evaluate an average of eleven years for the establishment of a free trade zone in the Mediterranean Basin. An econolnic union would be feasible within sixteen years, and a Inonetary union would require twenty-three years. As well, a political union would be possible within thirty-seven years. However, experts have quite differing views on the topic as demonstrated by a rather large variability in the time estimates provided. 2.4. Measures for the stimulation of cooperation The participants in the survey evaluate that barriers for cooperation in the Mediterranean Basin may be overcome by a combination of concrete short-term and long-term actions, as well as by adopting mechanisms for changing attitudes, enhancing dialogue, facilitating negotiations, and promoting conflict resolution. The short-term and long-term indicated actions that would facilitate cooperation include the following items: Academic research cooperation; Business joint ventures; Water purification plans; Joint infrastructure projects; Economic development; Small scale cooperation projects in focused economic sectors such as: sport, culture and tourism; Common social initiatives such as the enhancelnent of the status of women; Financial assistance programs
for cooperation in COlnmerce, research, education, and entrepreneurship. The mechanisms for changing attitudes may include the following items: Government and Non Government Organizations (NGO's) initiatives to secure commitment and willingness to help find solutions for political myopia and economic inequality; Developing education plans to promote cooperation and tolerance among nation states; Developing democracy regimes; Developing regional governance institutions; Harmonizing legal systems; Promoting the contribution of peace to regional development.
2.5. Future plans Subsequent conferences on regional cooperation in the Mediterranean Basin should focus on three main themes: The design of a process of cooperation and interaction, concrete regional action plans, and cultural and religious tolerance.
The design and process of cooperation and interaction include the following items: Lessons learned from other regions; The role of Inulti-national corporations (MNC) in regional cooperation; Regional resource allocation mechanisms; The design of a Mediterranean Basin governance mechanism, (e.g., Assembly, Parliament); Mediation Inechanislns and facilitators (e.g., women as a source ofmediation). The concrete action plans include the following items: The use of Internet and telecomlnunication technology to promote cooperation (e.g., distance learning, portal development); An agenda for equality; Education for tolerance; Confronting economic inequalities; Intraregional tourism; Cultural cooperation and cultural exchange programs; Environmental protection programs; Urbanization action plans; Research projects undertaken by cross cultural teams of researchers. Cultural and religious tolerance issues should be addressed through an agenda for education programs to enhance understanding of the three religions, and cross-cultural ventures.
Regional Cooperation in a Global Context 3. INTRA-REGIONAL CONSIDERATIONS IN REGIONAL COOPERATION
The evaluation of the benefits and constraints of cooperation between countries in a same region should take in consideration the potential effects upon localities and regions within each country. Cooperation between two countries may, under certain circumstances, lead to the widening of economic gaps within each country. As an example, an agreement was signed in March 2000 between the European Union and Morocco, establishing a free trade zone for industrial products in 2012. This is the third agreement of this kind, following those signed with the Palestinian Authority and Tunisia. However, this agreement, which reflects the will to strengthen the political, economic, social and cultural cooperation between the two banks of the Mediterranean Sea, raises a few problems that explain why, at least in the case of Morocco, five years of negotiation were needed. This indicates that although cooperation is desired, it is also a source of concern, mainly but not only in economic areas. The fears are clearly expressed by countries in the Mediterranean, as can be seen in the Moroccan press, which talked of the "grave danger" of the cuStOlTIS "disarmament" for the local enterprises that will have to COITIpete ith the enterprises of the European Union. The fear is that w the cOITIparativeadvantage of lower salary costs may be more by balanced by significant differences in productivity. Moreover, the fact that agricultural products are not included in the agreement and are subject to specific separate agreements disadvantages even more the countries of the South. Beyond the mere establishment of a free trade zone, the European Union should therefore help the countries of the South in decreasing gaps. This is exactly the purpose of the MEDA programs, which defined in 1996 their objectives as sustaining economic transition, strengthening the socio-economic equilibrium, and enhancing North-South and South-South cooperation. The twelve countries included in the MEDA framework do not intend to be integrated into the European Union, however the relationships should not be merely commercial. Cooperation should include other players, particularly the local collectivities. We should note that in the period of 1995-1999, 90% of all resources of the
program are oriented to national objectives, and only 10% are allocated to regional activities. Furthermore, the new wave of economic geography claims that spatial organization is an important factor in the economic and social development of a country, and that decreasing transportation costs Inay cause spatial polarization. We should suspect that the free trade on one hand and the "agricultural exception" on the other hand, might stitnulate socially unacceptable increasing regional gaps in the peripheral regions of the Southern countries. Openness amplifies geographical disparities. Regions that are able more than others to establish development poles with high quality services will attract Inore efficient firms that other regions. Trade openness may even stop econolnic growth if it leads to a very high specialization of regions. Furthermore, the priorities of public authorities in the allocation of infrastructures may increase those gaps even Inore, in case this allocation follows demand pressures and therefore advantages the Inore developed regions. This can strengthen a process of rural to urban Inigration and a growth in unemployment and of disparities, which may lead to social and political instability. This leads to the need for a Mediterranean cooperation policy oriented to efficiently sustain peace and stability in the region. It seems that one of the fundamental dimensions that should be taken into consideration is the regional cohesion of all the countries of the Mediterranean Basin, both in the North and in the South. This is exactly what is stated in the Scheme of Development of the COlnmunity Space, in which "integration and cohesion in a larger territory of the European Union are considered as having a growing political itnportance". Any action of cooperation with the South should, in our opinion, integrate the spatial dimension and not be restricted to the sole creation of a free trade zone. Alnongst all factors involved in the development of cooperation, it is important to emphasize the increasing importance of decentralized cooperation, particularly in relation to local collectivities. In the Decision adopted by the Committee for Regions of the European Union in February 2000, it is stated "that the various inter-regional partners of cooperation represent important elements for cooperation, dialog and growth". The new program of the Euro-
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Mediterranean partnership, MEDA 2, should emphasize more the abilities of the local collectivities, in order to respond to the constraints of MEDA 1. The launching of a program of decentralized cooperation should be a high priority objective in the working schedule of the Commission. The rules guiding the INTERREG programs, which relate to the cooperation between regions of the European Union, should therefore be harmonized with the rules of MEDA. This would be coherent with the spirit of the Meeting of the Ministers of the European Union who are responsible for regional development and for urban and regional policy in Tempere in October 1999. In this same spirit, the Observatory of the trans-border, transnational and inter-regional Cooperation, which was recently established by the European Commission, should integrate all the regional information that can be collected about the countries of the South. This would permit a better analysis of the regional and urban consequences of the establishment of a free trade area and of the enlargement of the European Union on one hand, and a better coordination and evaluation of the cooperation activities in this region on the other hand.
4. THIS BOOK
Three books present some of the main issues that were analyzed in the conference. Two are published in French, and addresses mostly the questions of the cooperation between the Northern and the Southern countries on the Mediterranean Basin and the Middle Eastern Countries. The present book, published in English, focuses mainly on the Eastern countries of the Mediterranean Basin, specifically the countries of the Middle East.
This book presents some of ideas raised during this conference. The various chapters of the book address the many diversified issues linked with regional cooperation, mainly in three main areas: the concept of regional cooperation and the related public policy, the fields of economic and business cooperation, and the non-economic aspects of regional cooperation.
In the first area, the general concept of "the new Middle East" is analyzed under various angles (Naor). The basic question of the relationship between peace and regional cooperation is posed (Bar-El
and Peled), considering various patterns of potential cooperation. The evaluation of appropriate trade policies and trade agreements is made for the Israeli-Palestinian case (Zagha; Gross and Sagi). The second group of chapters deals with specific issues of economic and business cooperation, beginning with a conceptual chapter dealing with an analysis of a country attractiveness for lTIultinational firms (Lowengart and Menipaz), and with chapters addressing specific important issues such as industrial cooperation (Elian), water supply (Fisher) and energy policy (Or). The last group of chapters deals with non-economic issues regarding regional cooperation, such as the influence of technological advance, with a special analysis of the internet (Peled), the security aspects (Dajani), the social (Malach Pines and al.) and cultural (Cohen-Kaner; Bar-Eli and Lidor) aspects, and finally the combination between economic growth and sustainable development (Ali).
THE "NEW MIDDLE EAST" CONCEPT: UTOPIA AND POLICY AryeNAOR
Ben Gurion University of the Negev, Israel
1. THE VISION The concept of "The New Middle East" does not describe an existing reality. At least for the time being the said concept is just a policy option, which, if accepted, will be able to change regional reality. In other words, it is up to the leaders and to the peoples of the Middle East to determine whether or not they want a new Middle East to emerge from the changes the region is undergoing through. If they decide in the negative, conservative powers and tensions, characterizing the region during the 20 century will probably be there also in the 21 century, questioning the prospects of the region to flourish in peace and prosperity. While it is possible to make peace within the context of the "old" Middle East, the duration and stability of such a peace are questionable. The concept of "the new Middle East" is directed towards stabilizing the regional system in peace. In contrast with the prevailing belief, this was not born as a reaction to the Oslo Accords, in which the State of Israel and the Palestine Liberation Organization recognized one another. Rather, the concept had been evaluated some two months prior to the agreement, at a time when it seemed to those participating in the dialogue that there was no real chance of actually finalizing an agreement. Shimon Peres, then Israel's Foreign Minister, asked me to write a draft for a book, in which he would express his ideas of how the Middle East might look during peace time, to make it clear to this generation, as well as to future generations, what would have been possible if conditions had been ripe for an agreement between Israel and the PLO, and what Peres had in mind as the objectives of the peace process.
Regional Cooperation in a Global Context
One could say that the book, "The New Middle East", which was published one month after the ceremonial, uplifting signing of the agreement at the White House, is a utopian book. One could say that this book is a kind of modern version of the prophetic vision "And they shall beat their swords into plowshares and their spears into pruning hooks... Nation shall not lift up sword against nation, neither shall they learn war anymore" (Isaiah II, 4; Mica IV, 3). However, in contrast with the two ancient prophets, Peres's conclusion is not based on recognition of the ultimate good, but rather on an understanding of actual problems and concrete dangers of reality. "I was born optimist and have remained one throughout my life", Peres wrote in his l11ellloirs(Peres, 1995). However, the vision of a "new Middle East" has not been derived from a sense of optimism, based on the denial of real dangers and actual threats. Rather it resulted from a sober evaluation of the regional situation, taking into consideration global developments as well. Neither is it based on portraying utopia as a promise from above, i.e., as a necessary result of a deterministic process, revealing what the Master of the Universe has decided. On the contrary, the very idea of a "New Middle East" is based on the freedom of human will. The power of free will, as analyzed by Jewish, Christian and Moslem philosophers and theologians, is the source for human responsibility, both on personal and collective levels (Strauss, 1963; Ferguson, 1978; Dworkin, 1988; Wolterstorff, 1995). It is up to the inhabitants of the region and their political and spiritualleaders to decide, if they wanted to actualize the vision. "The New Middle East" utopia is not a historic determinist imperative, but rather a possibility, an optional policy prescription, which depends on the will of mankind. Peres's optimism is expressed in his assumption that man is the master of his destiny and he can take advantage of existing trends and streams in order to modify them and change their course. Shimon Peres's vision is to establish a regional community of nations, whose prime concerns are building a regional economy for the benefit of its inhabitants, safeguarding the collective security from external threats and internal disintegrative processes, democratize the political regimes, develop technology speedily, expand education from preschool to university, and above all- establish peace between the different countries in the region, and within each one of them. In order to realize this vision, there is a need to establish a regional
The "New Middle-East" Concept
body, responsible for regional cooperation and collective security. This is the regional system, described in the book as a key to peace and security, national development and individual prosperity. Building such a system and institutionalizing it seems quite distant. Tensions and hostilities in the region do not make it easier to restructure the Middle East. However, it is possible. If the leaders want it, if they have sufficient responsibility in light of the arms race and the transition to a Middle East with nuclear capabilities, they will be able to overcome historical, cultural and national obstacles. This is a lesson to be learned from the development of the new Europe since the end of World War II. After all is said and done, the history of national controversies and wars in Europe is longer and more bloody, and yet West European leaders succeeded, in learning the lessons of the war, to overcome the problems of the past in favor of the future. It did not stem only from the moral rejection of the bloodbath, but also from the strategic acknowledgement of the useless of another total war, resulting from the nature of modern arms and their destruction potency. No longer has war any victor. In the Middle East as well, it is no longer possible to win a war, and this situation will become even worse in the future. The rational solution, therefore, is to consciously relinquish the military option, which is slowly disappearing in any case. The conscious relinquishment is needed because if the useless of war is not fully recognized and internalized, countries will continue to waste their fortunes on weapons which rapidly become obsolete and require parts and repair. More than that, as long as there is an arms race there is a permanent danger of a war, regardless its uselessness. Only the political institutionalizing of the intellectual understanding of the purposelessness of another war can build the new reality of peace. This article discusses the concept of "The New Middle East" as a model of reality and as policy reasoning. A model, by its very nature, is an abstraction of options, that is, it deals with the possible and not necessarily with the factual. Even if one accepts reality as a l11odel,the intention is to turn it into a model of a possible reality, the realization of which in a given time and place promotes it as an option for other times and places. As a model of reality, "The New Middle East" is, according to Manheim's traditional classification, a utopia
Regional Cooperation in a Global Context
and not an ideology (1990). Thompson summarizes the difference between a utopia and an ideology according to Manheim. Both ideologies and utopias transcend existing reality in the sense that they project modes of conduct that cannot be realized within the limits of the existing social order. But, whereas ideologies never succeed de facto in realizing their projected modes of conduct, utopias realize their content to some extent and thereby, tend to transform existing social reality in accordance with the modes of conduct they project. Ideologies are pure projections, which have no transforming effect on the social-historical world, whereas utopias are ideas that are eventually realized, to some extent, in this world. In this spirit it might be argued that by projecting a mode of conduct and transcending existing global and regional processes, The New Middle East claims that it is possible to build a new reality in the region. This is a model of possible, not necessary, reality. It is projected as a possibility, whose realization depends on decisions taken by the leaders of the respective countries. More than that, the new reality has already partially materialized, in spite of political objections to the concept of a new Middle East. As policy reasoning, the concept of "The New Middle East" rests on the assumption that establishing joint interests will make it easier to achieve peace, and will increase the chances of preserving the peace, when it is achieved. We must differentiate between the Israeli point ofview and the Arab point ofview in this matter. From the Israeli point ofview - and this is regardless of which government is in power at any given time there is a built-in lack of symmetry in the trade-off of land for peace. Israel gives real assets that are valuable in terms of security, in other words, Israel assumes substantial security risks, while the Arabs sign a piece of paper. The Israel side gives and the Arab side gets, and Israel has no means of ensuring that peace will really take root. Therefore, the Israeli peacemakers sought to establish means that would neutralize the risks of deviating from the peace process once territorial withdrawal had taken place. In the peace treaty with Egypt (1979), Prime Minister Menachem Begin insisted on demilitarizing most of the Sinai Peninsula, as a means of neutralizing his having given up Israel's strategic depth. A special international monitoring tnechanism was established in order to ensure that the
The "New Middle-East" Concept
demilitarization arrangements and reduction of forces was maintained, and a clear procedure was outlined in the event of claims in these Inatters. In similar fashion, joint Israeli-Palestinian patrols were defined even in the interim stage (incidentally, this is also based on the precedent of the 1975 Israel-Egyptian interim agreement). And yet, Inechanisms and procedures are not enough. The accepted Israeli concept claims that it is necessary to establish and encourage joint interests on both sides, in order to increase the desire to lnaintain the peace and to present a clear profit and loss sheet: The joint interests guarantee this by their very nature. Joint projects that prolnise employment, profits to entrepreneurs, technological developtnent for the future, improved manufacturing processes in existing factories and in agriculture - all these and more are likely to not only strengthen the desire to maintain the peace, but can also serve as a balancing policy reasoning in case of pressure, or some ideological tendency, to break the peace. The chances that such reasoning would be able to overcome opposing reasoning depends on the value of the joint interest. The larger the investment and the greater the benefit, the better the chances that the joint interest will be strong enough to overcome any tendency to break the commitments related to Inaintaining the peace. The Arab point of view is different. Israel does not need a series of joint interests in order to maintain the peace, and this is not Israel's motive, rather the desire to control the region through economic means, once the intifada had put an end to the previous strategy of territorial expansion (Shtayeh, 1998). There are those who add that the period when Benjamin Netanyahu served as Israel's prime minister actually proved it was the Arab side which required real guarantees that Israel would carry out its promises (Tubar, 1998). However, the different points ofview are not discussed in this article. As the peace process advances, perhaps they will become the subject lnatter of another analysis. 2. THE MODEL Shimon Peres begins his model of building a regional system step-by-step by taking a look at the early stages of the European Union. In a Ineeting in 1950, Jean Monnet told him that he had
Regional Cooperation in a Global Context
envisioned the European market as not merely in economic terms, but in political terms as well. To make this vision a reality required statistical data, not political rhetoric. In other words, it called for statesmanship, rather than political leadership. "The Middle East needs a Jean Monnet approach', writes Peres, in order to change reality in the region and build "a brave, new world" (Peres, 1993). Beyond hierarchies, markets and solidarity there is room for an innovative approach, bypassing managerial and conservative obstacles (Hood, 1998). This kind of leadership requires a high degree of creativity and an ability to modify one's own old concepts. These are subjective qualities, necessary for innovative leadership, but they are insufficient. An adequate understanding of historical reality is based also on the objective side of the developments. In 1950 France and Germany, bloody enemies of long standing, faced a common enelny, and this helped them overcome their own entrenched hostility towards one another. Do Middle Eastern countries have a common enemy of their own, which can unite them above and beyond their bitter hostility? The concept of The New Middle East is based on the presumption that such an enemy does exist, and this is poverty. According to Peres, poverty is "the father of fundamentalism, a threat to progress, development, freedom, and prosperity" (Peres, 1993). As long as there is a gap between expectations and opportunities, there will be room for religious fundamentalism and extreme nationalism to develop. These are wrong solutions to real problems. The correct, effective solution Inay be found in a community of nations, struggling together to improve the economy, and promote democratization and regional security. "Only an umbrella organization will be capable of establishing the shared high-tech irrigation system necessary to check the growth of the desert and enable countries to produce enough food and jobs for their population" (Peres, 1993). The conclusion is that a choice is given to the peoples of the region: "We have much to lose if we do not establish a regional framework that will vanquish the prophets of doom. And we have so much to gain, if only we know how to bridge the abyss of blood and tears - if we look forward in hope, not back in anger" (Peres, 1993). The regional system cannot be set up in a single step, hence the strategy for its establishment must be through step-by-step progress.
The "New Middle-East" Concept
Three stages of cooperation are foreseen. Stage One will include binational or multinational projects, such as a joint research institute for desert and water management. Desertification and a lack of water are two of the main sources of poverty in societies with agriculturally-based economies, and the interest in managing them can overcome national hatred. Stage Two will involve international consortiums, which will carry out projects requiring large capital investment, such as a Red Sea-Dead Sea canal, coupled with a freetrade and tourist zone along its banks. This stage requires international cooperation both inside and outside the region. Naturally, an end to conflicts in the Middle East, especially the ArabIsraeli conflict, is a prior condition for its success. Stage Three will include regional community policy, with gradual development of official institutions. Europe provides two different examples - the European Union on the one hand, and the Balkans on the other hand. Leaders of the Middle East can follow each of them and make the region either a new Western Europe or a new Balkans (Peres, 1993). This strategy of stages is aimed at its climax: The establishment of a regional system and its formal institutionalization. This is the same strategy used by Monnet and other founding fathers of the European Union, as Peres understands it. He sees the EU as the model for other historical developments of the late 1900s, which evidently will lead, in the early 21st century, to the establishment of common markets and communities of nations in the Far East, Africa and South America, following North America. Russia and some East European countries, as well as the Middle East, will evidently establish their own markets, in order to ensure their economic survival (Peres (Hebrew), 1998). This general vision gives a broader, global perspective to the New Middle East concept. Is this the current Zeitgeist? Is the world ITIoving towards a process of concentration into a number of international communities? Will the future of mankind be shaped by a global culture and trans-national economy, cosmopolitanism and supranationalism (Smith, 1991)? Will the 21century bring "a universal civilization', or perhaps, is a "clash of civilizations" unavoidable (Huntington, 1996)?
Regional Cooperation in a Global Context
It is too early to answer, even without adopting a Hegelian approach, that an adequate understanding is possible only after the completion of the process. However, we can identify the deeper processes that are necessary to carry out the vision and integrate nations: Trans-national identity and a change in the concept of sovereignty (Elkins, 1995). From a global perspective, the exclusivity of the territorial state, as it was known since the 1648 Peace of Westphalia is undergoing a change, which cannot "pass over with silence" (Wittgenstein, 1961) upon the Middle East. In the case of the EU the process of integration lacks genuine historical antecedents. As Malcolm Anderson phrases it, It is quite unlike state-building in early modem Europe and the drive towards national self-determination in the nineteenth and twentieth centuries; there is no contemporary equivalent of the federator monarchs who built the European kingdom-states and, as yet, no "European people" to provide popular support for the European Union. Loyalty to the EU and belief in its legitimacy must be derived from other sources rather than those that bind together nations, peoples and local communities. Differences of history, language and culture define the peoples of Europe. As a consequence, the EU can only be based on commitment and loyalty to a European Constitution supported by powerful coalition of interests (Anderson, 1996). Anderson concludes that extending European citizenship rights, which bring tangible benefits for individuals and groups, is "a central element" in building a European loyalty, and we may add, a European identity. Nationalism is always a mode of identity, developed by socialization (Smith, 1991; Greenfeld, 1992). Trans-nationalism and supra-nationalism are involved, on the other hand, with a rational choice. Will rational overcome irrational forces in human society? Will the "Western" sense of nationalism (in European terms, a rational and associated version of nationalism) overcome the "Eastern" (ethnic, organic and mystical version of nationalism) (Kohn, 1955)? Even if the "Western" type prevails in Europe, thereby enabling an expansion of the EU and an end to nationalistic conflicts in the fringes of Europe, there is no guarantee that a similar process will take place in other parts of the world, the Middle East in particular. A "civilization consciousness" different from that of
The "New Middle-East" Concept
Europe may lead to very different historical results. As Huntington says, "Identities in the Muslim world tend to be V-shaped: As the struggle progresses, the Muslim participants quickly seek to broaden their identity and appeal to all of Islam, as was the case with an antifundamentalist secularist like Saddam Hussein" (Huntington, 1996). Building a regional identity requires legitimacy for "the other" ethnic, cultural and religious. As Peres says, The history of Western civilization cannot be fully understood without considering the contributions Islamic culture has made to contemporary science, philosophy, mathematics, literature, art and trade (Peres, 1993). Indeed, legitimacy means equality, and equality means, first of all, abandonment of any purposes to achieve domination over "the other'. One of the difficulties on the path to realizing the concept of the New Middle East is the high sensitivity of Israel and the Arab nations towards each other. Each side believes that the other wants to dominate the region, and thus achieve supremacy over "the other'. It calls for a brave, farsighted leadership. Such leadership must adhere to international reality. Among current factors in international politics and policy-making, one has to count the global process of concentration, the rapid pace of technological change and scientific development, the inadmissibility of dictating reality by military power without international legitimacy, as proven once again in Kosovo. Among the regional factors one must include desertification, poverty, religious fundamentalism that threatens political and social stability, and the expected obsolescence of weapons supplies that are accumulating in the region and its position as a major energy supplier. All of these lead to the conclusion that the coming century will witness a New Middle East as a reality. Contrary to the general concept, as described in the beginning of this article, there is no escape from the new emerging reality, resulting from new scientific discoveries and technological developments. Hence the utopia will come true, almost deterministically.
3. POLICY REASONING
The idea of a New Middle East as policy reasoning is aimed, firstly, at the peace process, towards whose progress the idea is
Regional Cooperation in a Global Context
directed. The assumption is that the strategy of stages for establishing a regional network will accelerate the peace process between Israel and its neighbors, and among the Arab countries, and when formal peace is achieved in the region joint interests will ensure its preservation. Secondly, policy reasoning is aimed at advancing the entire region towards an era of prosperity and stability, freedom and development of human potential, on the basis of equality, law and peace. The first consideration is clearly expressed in an idea that apparently raises difficult questions: Will a formal regional system be able to take root in a region that is so complex, because there is no single solution to its security problems, and in Peres's own words. Establishment of a regional security system depends on recognition of the one fact that distinguishes the final years of the twentieth century: National political organizations can no longer fulfill the purpose for which they were established - that is, to furnish the fundamental needs of the nation. Since time immemorial, people have formed sociopolitical units to work together to supply basic needs and guarantee security. This is still true today. Outside of an organized, established social framework, people cannot provide for security and produce what they need for daily survival... In the light of contemporary developments... a nationwide organization is not sufficient to ensure this security. The social group has expanded, and today our [needs] can be ensured only on a wider framework, on a regional. ..basis (Peres, 1993). The concept expressed in this citation is that satisfaction of needs defines, in almost determinist fashion, the institutions and the means required for this purpose, taking into account technological and economic capabilities. Beyond the socialist echoes, a vestige of Peres's education and past as Vice President of the Socialist International, his words express systematic decision-making in accordance with the rational model, policy definition based on the l11arket model, and its preference over the political model (Stone, 1997). Indeed, Peres notes, in the past the Palestinian problem had been the focus of the Arab-Israeli conflict and was at the core of the threat to the security and stability of the entire region. This is no longer true, not only because Israel and the PLO have recognized one
The ''New Middle-East" Concept
another, but also because the nature of the threats and dangers have changed before our very eyes. Now, the problem is the nuclear threat. Until this danger came to the fore, countries had the ability to deal with threats and come up with solutions. Now that the nuclear problem has taken center stage on the political-strategic agenda, political organization by itself is not enough. There is no military response to the nuclear threat, just as there is no military response to the dangers of fundamentalism and poverty. The result of this is that national security depends on regional security, and therefore, a regional framework for security is needed to promote peace and concentrate regional efforts to withstand threats to security and stability . The second consideration is clearly expressed in the vision of "the green belt" and activities to overcome the process of desertification and the lack of water, which endanger the region's economy, increase poverty and thereby, encourage the move from rationalism to fundamentalism. In Peres view. The protracted conflict in the Middle East affected all nations in the region, including the outlook of their leadership. Arabs and Israelis became embroiled in the politics and strategies of confrontation: The threat of a future war overshadowed all other considerations. Yet while they guard the areas under their sovereignty, Arab leaders are gradually losing their fertile land. And this time, they are surrendering without a fight. The enemy today is the desert... Desertification is a problem worldwide, and the United Nations and Inany countries are involved in trying to control it... (Peres, 1993). Together with uncontrolled population growth, the result of the process of desertification is poverty. The fight against this enemy requires that we combine our resources, and this kind of coalition requires gradual institutionalization of a network that can deal with the interest shared by all peoples in the region: bringing forth bread from the land. Desertification is threatening the people and environment of the Middle East... It is imperative that the Middle East amass its
Regional Cooperation in a Global Context
resources to check the spread of the desert - the enemy of the entire region (p.117). The struggle against desertification will be based on developing water sources, water desalination and scientific-technological development in the field of agriculture, particularly biotechnology. The fact that Israel has already developed these fields can help advance the strategy by stages, provided its image as an agency seeking to dOl11inatethe region is substituted for a country that wants to make just and durable peace with its neighbors, based on mutual respect and human dignity. An image of Israel that respects its neighbors and their heritage, and offers its relative advantage out of a deep sense of humility, on behalf of the joint interest of all the region's inhabitants, is a condition to succeed in joining forces in the struggle for the region's common good. This is not a simple task, and it demands leadership ability and high-quality political policy reasoning. Separation between analytical reasoning and political reasoning is not what is needed, rather these l11ustbe combined into a single policy reasoning. Charles Lindblom explained the difference between the two types of reasoning. When we say that policies are decided by analysis, we mean that an investigation of the merits of various possible actions has disclosed reasons for choosing one policy over others. When we say that politics.. .determines policy, we mean that policy is set by the various ways in which people exert control, influence or power over each other (Lindblom, 1980). In the case of The New Middle East "politics" cannot and should not mean an exertion of power and control over each other. Rather it is a mode of influencing by persuasion. Any other approach is doomed to fail. 4. CONCLUSION We do not have the power to determine scientifically whether the third l11illennium is dawning on an Old Middle East, which will serve as the battlefield for a war between civilizations as were the Crusades at the beginning of the millennium now drawing to a close, or on a New Middle East, whose global culture is moving towards the
The "New Middle-East" Concept
rest of the world and leading to the adoption of trans-national and supra-national organizational patterns. The options are open, and the processes are just getting underway. The concept of a "New Middle East" presumes the probability of the second option, of innovation and adapting to a changing reality. As Peres said in his speech as Foreign Minister at the United Nations Assembly several days after the mutual recognition agreement was signed between Israel and the PLO. As the twentieth century comes to a close, we have learned froln the United States and Russia that there are no military answers to the new military dangers, only political solutions. Successful economies are no longer a monopoly of the rich and the mighty. They represent an open invitation ready to adopt the combination of science and open-mindedness. We see... that politics can achieve more by goodwill than by power... Historically we are born equal, and equally we can give birth to a new age (Peres, 1993). Thus, in the spirit of the French revolution and the equality of human beings, Peres concludes his proposal. As earlier said, the New Middle East concept is an option for policy-making. It is up to the inhabitants of the region and their political and spiritual leaders to determine whether or not this possibility is actualized. Perhaps the fact that the peace process is being spread in spite of the difficulties caused by Jewish and Moslem fundamentalists alike, gives some hope for a reasonable, open-minded approach to the shaping of the region's future. As Leopold von Ranke once wrote (1950), "the secret of Western history" lies in creative forces, "in their interaction and succession, in their life, in their decline or rejuvenation" . Dialectically, "out of separation and independent development will emerge the true harmony", that peculiar Europe where the "union of the whole.. .has happily preserved the freedom and separate existence of each state". Out of this harmony of separate states, equal in their rights to be different, European unity gradually emerged. The same Inay occur in the Middle East, provided the necessary will is there.
ANDERSON M., 1996, "Frontiers: Territories and State Formation in the Modern World", Polity Press, Cambridge.
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