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News Analysis: Israelis, Arabs Talk Business Despite Stalled Peace Process

November 19, 1996
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The host was less than hospitable, but nonetheless, Israel was able to find a comfortable place for itself among the other invited guests.

This was the mixed assessment that emerged from the third annual Middle East- North Africa economic summit held last week in Cairo.

Without a doubt, Israel had enjoyed a more prominent place at the table at the 1994 conference in Casablanca, Morocco, and at last year’s meeting in Amman, Jordan.

The previous two meetings took place amid hopes for a new regional order in which former enemies would forge economic partnerships that would ensure a peaceful future for the region.

In sharp contrast, the Cairo conference threw a harsh spotlight on a growing rift in Israeli-Arab relations.

Egyptian President Hosni Mubarak threatened weeks ago to cancel the meeting altogether to protest the stalled Israeli-Palestinian negotiations.

But he ultimately abandoned his plan to link the economic conference to progress in the peace process, and he gave the Egyptian business community a free hand to run the show.

In the week preceding the conference, key Israeli business leaders received messages from Cairo to attend the conference, even as Israeli and Palestinian negotiators struggled to reach agreement on implementing a redeployment of Israeli forces in Hebron.

Still, Egyptian Foreign Minister Amre Moussa orchestrated conference events with an eye toward keeping Israel from the center of attention.

Mubarak did not mention Israel when he addressed the conference.

Despite Egypt’s chilly posture, the broader Arab business community could not ignore Israel’s position as the region’s leading economic power.

“The Egyptian Foreign Ministry wanted to put an end to Israel’s centrality in the previous conferences,” said Reuven Azzar, commercial attache at the Israeli Embassy in Cairo. “But the private sector in Egypt was not ready to step backwards.”

The conference brought together some 3,000 delegates from more than 80 countries. Among those attending was a 100-member Israeli delegation that included six government ministers.

Although no dramatic Israeli-Arab business ventures were announced at the conference, the event enabled Israelis to continue to do business with the Arab world.

The Arab delegates “received an order from higher echelons to do business,” said Israeli businessman Ya’acov Nimrodi.

“Up to now they only talked,” he added. “Now they are doing.”

Nimrodi, owner of the Israeli daily Ma’ariv, said he was working on a possible deal with Al-Ahram, Egypt’s leading daily newspaper.

Based on the comments of some Egyptian businessmen, it seemed impossible to tell that the Cairo government was decidedly frosty toward Israel.

“Until now, we have no exports to Israel,” said Mohammed Hussein, a representative of an Egyptian chocolate factory. “But relations are good, and we have no objection to doing so.”

He and others gave the impression that economic links would continue to be forged regardless of the latest ups and downs of the peace process.

“I don’t relate to the political differences,” said Dov Lautman, chairman of the Israeli firm Delta Textiles. “I relate to facts and reality.

“I feel in this conference that it is precisely the business sector which affects the political process, and not vice versa.

“We didn’t come to meet with politicians. They are unimportant to me. We came to meet Egyptians.”

Lautman said his company had invested $5 million in its Cairo plant, which became profitable after two years and boasts annual exports of $5 million.

He used the conference podium to announce that the Cairo plant would be expanded, thereby creating more jobs for the local economy.

“Business is good, relations with the authorities are good,” said Lautman.

The economic conference proceeded, in fact, on two parallel tracks, the political and the economic.

On the political side, the event was marked by tensions between Israel and the Palestinians over the stalemated Hebron talks.

Conference delegates adopted a declaration stressing the urgency of progress in the peace process, but stopped short of blaming Israel for the current impasse.

Meanwhile, the Egyptian authorities allowed political groups opposing the normalization of relations with Israel to hold a “Confrontation Conference” during the economic conference.

The leftist Egyptian weekly Al-Ahali quoted a public opinion poll showing that 80 percent of the Egyptians surveyed opposed Israeli participation in the conference, because Israel was “the enemy of the Arabs.”

Perhaps the conference’s darkest moment for Israel came when Egypt signed a memorandum of understanding with Turkey to sell that country some 350 million cubic feet of natural gas annually.

There had been negotiations to include Israel in the arrangement, but Egyptian officials said the separate deal with Turkey had been struck because of what they described as Israeli foot-dragging in the discussions.

Israeli officials, seeing this as yet another slap in the face from Cairo, were furious.

Israeli Foreign Minister David Levy criticized the summit during remarks to reporters.

“This is different from the previous conferences, which were done in participation with Israel,” said Levy, who did not directly address the summit.

“This conference is an Egyptian economic conference to which Israel has been invited.”

Israeli Trade Minister Natan Sharansky said it was undoubtedly “Egypt’s inclination to put Egypt at the center, not only of the conference, but also of the entire economic system in the Middle East.”

But any assessment of regional economic cooperation must be seen in mixed terms.

True, Israel did not wrap up any major deals with its Arab neighbors.

But trade among Arab states, which totals about $22 billion annually, is just 7 percent of Arab trade with the rest of the world.

And for all the talk of cool relations between Jerusalem and Cairo, annual Israeli-Egyptian trade, excluding oil sales, jumped from an insignificant $7 million only four years ago to $77 million last year.

In addition, business deals between Israeli firms and Arab entrepreneurs from the Persian Gulf states are quietly proceeding.

There was one other positive indicator: The Israeli delegation returned from Cairo with an invitation to attend next year’s regional economic conference in Qatar.

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