Peres: Mideast Can Burst into Flames Unless Looming Economic Catastrophe Can Be Averted

Premier Shimon Peres warned Thursday that "the whole Middle East can burst into flames" unless the looming "economic catastrophe" in the region is averted.

"The economic issue is becoming the most urgent issue in the Middle East," Peres asserted at a meeting with Israeli reporters and later at a meeting with the Conference of Presidents of Major American Jewish Organizations at the Regency Hotel. The Prime Minister claimed that Egypt, Jordan, Syria and Lebanon are heading toward an economic disaster and their foreign currency reserves are at an alarmingly low ebb.

"We have to try to be ahead of the storm before the whole area bursts into flame," Peres said. He said economic stability in the region is necessary to create a political atmosphere to reach a peace settlement.

PROPOSAL FOR A ‘MARSHALL PLAN’

Peres said that in his talks in Washington, he discussed a "Marshall Plan" for the Middle East which, he suggested should be sponsored by the European countries and Japan. Peres said the Europeans and Japanese have gained some $70 billion as a result of the continuing decline of oil prices, while the Arab oil-producing countries lost in the process an estimated $100 billion in oil revenues.

"I found the response in Washington to the plan positive and responsible," Peres said. At his meeting with Israeli reporters, he expressed satisfaction with his visit here and his talks Tuesday with top Administration officials. He said the Administration is firmly behind Israel’s efforts for economic recovery and economic independence.

Peres said that he thought it was "unprecedented" that Secretary of State George Shultz received a large delegation of Jewish leaders members of the "Task Force" to help Israel gain its economic independence. Shultz received the group in Washington Tuesday.

The Administration was also forthcoming in its efforts to help Israel’s economic growth by agreeing to increase American purchases of Israeli goods and services, Peres said. He said the Administration was receptive to Israel’s request that the U.S. increase purchases in Israel for its forces in Europe.

REKINDLING THE PEACE PROCESS WITH JORDAN

The Prime Minister also said the major topic of discussion in Washington was how to rekindle the peace process with Jordan after the stalemate which developed following the breakdown of talks between King Hussein of Jordan and Palestine Liberation Organization chief Yasir Arafat.

"We have now reached such a good set of relationships between Israel and the U.S. that it is almost hard to imagine," Peres said. He described in glowing terms the warmth he encountered from President Reagan during their telephone conversation Wednesday evening and from other U.S. officials. He praised Shultz in particular, calling him "an extraordinary human being and friend of Israel."

OTHER ISSUES DISCUSSED

Asked about the growing scandal around former UN Secretary General Kurt Waldheim’s alleged Nazi past, Peres confirmed that if necessary, Israel will request the release of the file on Waldheim held by the UN. The Prime Minister, however, was reluctant to discuss the Waldheim affair at length, saying it is not a top priority on his agenda.

Asked by the Jewish Telegraphic Agency about the threat from Syria to peace in the region, Peres said that Israel should refrain from escalating the rhetoric. At the same time, he said, constant vigilance is required with respect to Syria’s intentions toward Israel.

On the state of relations with the Soviet Union, Peres said "unfortunately there is no change of Soviet policy in the Middle East." He charged that the Soviets continue to supply arms to Israel’s enemies and get themselves involved with "the most dangerous elements in the in the area."

Peres had a meeting Wednesday with President Arturo Del Velle of Panama who is also visiting New York. Del Velle, Panama who is Jewish, told Peres he is a descendant of Marranos, secret Jews who left Spain in 1492.

Peres left for Israel Thursday night.

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