After reviewing Israel's economic needs, Mr. Shamir described Israel- U. S. relations and found that the leader of the free world shared many of Israel's perceptions and evaluations and concerns. Turning to the Middle East, Mr. Shamir thought there were a number of obstacles on the road to Arab-Israel peace. The first was the continued rejection by the Arab governments of Israel's existence as a permanent feature of the Middle East, the second was the cooperation between Arab governments and the PLO, and the third obstacle was the Arab expectation that Israel would withdraw to the 1949 armistice lines. As long as these obstacles are not removed, the peace making process would be hampered. Text:
Once again I congratulate the Bonds organization for bringing such a large and important mission to Eretz Israel and to Yerushalaim, the nation's capital. I know that you have travelled around the country; that you have seen for yourselves and have heard the views of many people.
Presumably you expect me, as Foreign Minister, to discuss our international relations. I shall do so, but first some remarks about the economy. It was the need to give new impetus to the economy that prompted my initiative and call for the formation of our government of national unity. There are some steps that my party alone could have taken; there are other measures that the Labour Alignment could have taken. But only both of us together could seriously tackle the overall challenge.
Fortunately, we were able to set aside our legitimate differences; to postpone controversial issues and to concentrate on the priorities of the day. As a result, our unity government is functioning and the first fruits are evident. The best indicators are that last months the cost of living rose by only 3.7% - which is the lowest December index in 6 years - and that in 1984 our trade deficit was reduced by $1 billion. This gives us reason to hope that we are on the right track.
Our economic malaise is, in large part, due to the cost of our security and the investment in peace. You may recall that the Camp David Agreement produced a package that entailed very substantial concessions on Israel's part. Not the least of these is the enormous financial burden of re-locating our military positions from the Sinai and giving up our only source of oil. Defense is, of course, still the major item of expenditure in our budget. It takes about 25% of our GNP, which is one of the highest in the world. Even now we cannot afford to relax or reduce this national defense investment more than we have already done in our budget cuts.
We live in a volatile region and are forced into a permanent arms race. While one of our Arab neighbors is presently able to think seriously in terms of war against us, they are - especially Syria - working towards that they call "strategic balance," by which they mean superiority. If they should ever achieve it, they will consider themselves ready for another phase of aggression against us.
Therefore, every time we hear that the Arab countries are receiving new supplies of sophisticated military equipment from the Soviet Union or from the west, including the United States, we must make arrangements for additional investments ourselves. We can never expect to keep up with them in quantity, but we must, at all times, be one step ahead of all of them in quality.
Our plans to strengthen the Israel economy are based upon three principal factors:
Firstly, ourselves. You know what the government and people of Israel are doing to meet the challenge. We have imposed heavy burdens on the people and, in some and for our special relationship with the United States, and respect for our firm stand against the powerful forces fighting against us.
There is a changing attitude in Europe and our aim is to improve and strengthen ties with Latin American governments, and even with some third world nations. I recently visited a number of countries in Latin America and found warmth and friendship, growing understanding for Israel's position and the justice of our cause. We always remember the important support we received from South American governments at the height of our struggle for freedom and in the early years of our state.
We saw signs of the change at the last U.N. session, where the Iranians submitted a resolution calling on the Assembly not to recognize our credentials. The object was to expel us from the United Nations. The majority of members voted against this resolution and the number of countries voting against it was an improvement over previous years.
Naturally, one of the main features of our foreign policy is the constant search for peaceful coexistence with our neighbors. I need scarcely reiterate that the desire for peace is deeply ingrained in our national consciousness and in our faith and culture. In a society that is truly free, peace is an ideal and a natural and permanent objective in itself. But experience has shown that peace is a real objective that requires symmetry, for a one-sided peace is not peace at all - it can be appeasement, surrender or domination, but not peace.
Although the peace treaty with Egypt was a revolutionary, historic event in the annals of the Middle East and a giant step forward, there are still major obstacles on the road to peace with our other neighbors. The first is the continued rejection by Arab governments of Israel's existence as a permanent feature of the Middle East, with the same rights to security and peaceful development as every other country. Yes, there is double talk and deception and the pretense of moderation, but no real change for the better.
The second obstacle is the continuing cooperation of Arab governments with the PLO terrorists. Two weeks ago the PLO marked its 20th anniversary, and in all that period it has not changed its colors. We saw this most recently at the conference of part of the PLO in Amman several weeks ago, when they reaffirmed and reiterated their terrorist vocation and repeated the calls for escalating the armed struggle against us.
There is a national consensus in Israel that the PLO is not a partner to the peace process. This organization is a definite obstacle to peace. Time and again it has risen, like Frankenstein, against its creators, the Arab states, who have regrettably not yet learnt the lesson. In fact, Arab leaders have handed over to the PLO some of their important decision-making. They are captives in its hands, and have paid dearly for it. Lebanon is the worst example.
Our operation Peace for Galilee succeeded in breaking the back of the PLO, in depriving them of their territorial base and in scattering them to the four corners of the Arab world.
I need not stress to this audience that we fervently desire to bring our troops back at the earliest opportunity. We have no interest in staying in Lebanon, and have no quarrel or dispute with the Lebanese people, with whom we could share a future of peaceful co-existence. But, in the light of our experience, we have been debating how best to establish appropriate security arrangements that will give protection to our population in the north of the country and prevent the return of the situation that existed before June 1982, which would be a most worrying and dangerous development.
And the third obstacle on the road to peace is the Arab expectation that Israel will go back to the 1949 armistice lines. This is another dangerous illusion. These lines no longer exist, neither on the ground nor politically. Israel made major territorial concessions at Camp David more than six years ago, following which we signed the peace treaty with Egypt.
We have requested the Egyptian government, which has chilled the peace, to resume the efforts of normalization and to revive the autonomy talks. Although we will shortly be holding talks with Egypt on technical aspects pertaining to the issue of Taba, we are still waiting for a sign of Egyptian readiness to improve relations and return its ambassador to Israel. Such progress is vital. If we are to preserve the peace, and also to send signals to other Arab governments that there is no other way to peace.
These words apply especially to King Hussein. The growing cooperation between Jordan and the PLO cannot further the cause of peace and its casts grave doubts on Jordan's declared moderation. We cannot tolerate Jordanian attempts to profit from two contradicting worlds: To court the PLO terrorists and to call for peace and solicit understanding and support from the free world. The king will have to make up his mind to which of the two camps he wants to belong.
We continue to invite Jordan to join us in free negotiations about peace between two sovereign nations. There is a great deal we have in common, which derives from geographic, demographic and economic considerations. Both countries and nations can gain from closer cooperation.
My friends, I am confident that we are making progress towards solving some of our immediate problems. Despite all the difficulties, our position today is better than it has been in many years. We are free and strong; our country is secure and our population is safe; our international standing is good and our economy is basically sound.
We have to use this period to invest in our long-range future; to do things today that were beyond our capacity 30 years ago; to do things today whose results will be felt in generations to come. We have to mobilize and utilize the creative genius of all the Jewish people, their economic, industrial and professional skills, to put us firmly on the road to economic independence, just as our struggles and sacrifices of the past gave us our political independence and our military security.
With your continued and increasing support, we can do it. I sense your awareness of the responsibility that destiny has placed on us and of the commitment that is demanded from each and every one of us who is privileged to live in this wonderful period in the history of our ancient people.