Note: The translations of articles from the Hebrew press are prepared by the Government Press Office as a service to foreign journalists in Israel. They express the views of the authors.
THE PEACE HAS SAVED THE SHEKEL
(Commentary by Sever Plotzker, "Yediot Ahronot", Nov 22, 1998, p. 5A)
Not Professor Frenkel and his raising of interest rates. Not Professor
Ne'eman and his calming speeches. Not the foreign currency traders with
their speculations. None of them saved the shekel from its continued fall
this week. Benjamin Netanyahu did it, the first Likud prime minister who
began to implement a "land for peace" agreement with the Palestinians.
How peace with the Arab world is the jet fuel for the renewed take-off of
the Israeli economy could be more sharply seen at a major business
conference in the United States. Without it, in the best case, we would
have remained grounded.
Conference participants -- leading American, European and Asian managers
-- shook hands, praised the agreement and wished it success.
"Congratulations," they warmly said, "your peace is back on track. The
Israeli economy will flourish again. Believe us, we are on the side of
celebrants." They are the side that invests.
The pictures broadcast worldwide, in which Israeli and Palestinian
officers examined redeployment maps together, are worth a million times
more than any sophisticated economic analysis. The congratulatory
atmosphere at the meeting between Ariel Sharon and Abu Mazen contributes
more to the Israeli economy's tempting image than all the financial
statistics, which are still not to our advantage.
Last year, the excitement of foreign investors in the US towards Israel
cooled sharply. The Asian crisis, Israel's continuing recession and the
instability of capital markets were the economic reasons. At a deeper
level, the distancing from Israel was caused by the lack of trust in
Netanyahu's peaceful intentions. Many in the American business community
did not believe, up until the last minute, that Netanyahu would implement
the Wye Memorandum. Two days ago, this weight was lifted from their
shoulders.
How significant Netanyahu's peace is to the Israeli economy will be known
in a few months. In my opinion, its contribution will be crucial and is
likely to change the chilling economic forecasts for 1999. Netanyahu
himself prefers to have reservations about this: "I am not in the business
of a New Middle East," he says. This is not accurate. The concept of the
"New Middle East", a dynamic, liberal and infra-structurally connected
region fits Netanyahu's business views like a glove. Economically, he is
drawn to the "New Middle East Economy". As a nationalist, he is
deterred.
The facts themselves will decide: When the economic representations of
Qatar, Bahrain and Kuwait open soon in Tel Aviv, Israel will go back to
fulfilling its role as a stimulative, active and growth-promoting factor
for the entire Middle East.
Devaluation is still in the offing, hanging like sword of Damocles over
the economy. This is a painful structural problem, the real economic
treatment of which has not yet begun, only postponed. But Ne'eman and
Frenkel will find it much easier to tackle in a new atmosphere of peace
economics, the peace of Bibi, if it only continues.