Anyone reading last week’s economic headlines might have thought that the Messiah had arrived in the Middle East. Minister of National Infrastructures Benjamin Ben-Eliezer met his Jordanian and Palestinian counterparts, and together persuaded the World Bank to allocate $20 million for a feasibility study for construction of a “Peace Conduit”, an artificial canal between the Red and Dead Seas.
Minister of Transport Meir Sheetrit echoed Ben-Eliezer, contacting the Jordanian Minister of Transport with a proposal for a joint project to link the Jezreel Valley railway from Haifa through Irbid, Jordan, to Iraq. It’s a pity that he didn’t also propose rebuilding the old oil pipeline from Kirkuk, Iraq, to Haifa as well.
The practical response to these reports can only be bitterly learned cynicism, in view of ministers’ publicity seeking. The history of Israeli-Jordanian economic cooperation includes a long list of impressive grandiose potential projects that look great in newspapers, but have zero chance of being built. Here is a short list:
- A Sdom-Aqaba railway.
- A port at Kishon, near Haifa, for Jordanian cargoes.
- A biosphere reserve at the Dead Sea.
- A joint Eilat-Aqaba airport.
- Cross-border sailing on the Dead Sea.
- A joint fiber-optic cable along the Jordan Valley.
- A dual-use power station in Aqaba.
- A “Free Tourist Zone” for tourist ventures on the Gulf of Eilat/Aqaba with entry from both countries.
- The “Jordan Gate” joint industrial zone outside Beit She’an in the Jordan Valley. This is the only project that came close to reality, but the developers involved went through Israeli bureaucratic hell before finally giving in.
Modesty would help
Experience proves that joint projects can really succeed and not just exist on paper if they are fairly small and modest, owned by Israeli and Jordanian businesspeople. The best example is the Jordanian qualified industrial zone (QIZ) whose factories must buy 8% of their inputs from Israel. Some Israeli textile companies have moved their production facilities to Jordan, and others sell goods to Jordanian manufacturers.
The QIZ has boosted Jordanian exports to the US from a few tens of millions of dollars in 1998 to $1 billion a year, while Israeli exports to Jordan have risen from $20-25 million a year in 1998-99 to a peak of $133 million in 2004.
The secret of success is “doing business in Jordan quietly”, and avoiding the spotlight (and cameras). Israeli and Jordanian businesspeople have been in contact, and continue to do so, with wisdom and recognition of regional realities. Progress was made one container or package at a time, while coping with backups at border crossings, visa difficulties, and strikes at Israeli ports. These businesspeople did not have dreams about power stations, Disneylands in the desert, or trains that go nowhere.
Whereas Jordan has centralized decision-making that helps entrepreneurs, it is not clear that Israel has the organizational and political abilities neededfor large-scale cooperation that involves the government.
Many Jordanians are greatly disappointed from the fruits of peace. They want to see the “New Middle East” peace dividend that Israel promised during the 1990s, while the Hashemite regime marketed the 1994 peace treaty with Israel to the Jordanian public, that created unrealistic expectations and dreadful illusions.
There also exists in Jordan a strong committee headed by the Islamic movement and unions that opposes normalizing relations with Israel. The committee claims that economic cooperation with Israel is “exporting Zionist economic imperialism” and “a takeover of the Arab economy”. Irresponsible comments by high-ranking Israelis about projects that will never be built only supplies raw material for conspiracy theories.
Nonetheless, quite a few Israelis have made profits and developed joint ventures in Jordan. Those who do it right, with partners who have a common interest, can make money. Quite a few Israelis have used Jordan’s economic ties with the Arab world to indirectly export Israeli goods to the Gulf states, Saudi Arabia, and even Iraq on the condition that discretion is maintained.
The bottom line is that in the Middle East, economic cooperation can take place only on a small scale and between private businesspeople. Governments can only do harm, and it would be better for ministers to focus on more realistic matters.
Published by Globes [online], Israel business news - www.globes.co.il - on July 13, 2005