Behind the Headlines War or Peace? Sadat Still Has Time to Make a Choice

On May 15 Egyptians will go to the polls in a nationwide referendum to approve President Anwar Sadat’s “October Paper,” his program for far-reaching economic reforms drawn up following the October war. This will be the first step in the formal inauguration of what is widely termed now “The Second Republic”: a departure from Nasserism towards a new era of economic drive and political re-stabilization.

Israeli officials are closely following Sadat’s moves. Many of them believe that coming developments in Egypt may provide the key to the whole Middle East problem. For if Sadat is really set upon a course of internal rehabilitation, the chances of a new war would be enormously diminished.

On the whole it seems that Sadat is sincerely convinced of the necessity to pay more attention to Egypt’s own problems. Official figures indicate that Egypt cannot afford another prolonged period of military build-up and costly wars without grave consequences of economic debility. In his “October Paper,” Sadat says that Egypt has spent more than ten thousand million Egyptian pounds on its military budget between 1967 and 1973.

This awesome burden meant a drop of real economic growth rate from 6.5 percent to 3 percent annually, and a drop in development investments from 18 percent of the GNP to a mere 10 percent. This showed that Egypt had returned to its pre- 1952 situation when economic development lagged behind population increase.

For example, before the Six-Day War, Egypt’s economy absorbed 80 percent of the incremental labor force, but only 50 percent after 1967. Without financial aid from oil rich states, Egypt would have gone bankrupt. Sadat argues now that “success in economic development is a question of life and death. He has ambitious plans for foreign investments and economic projects.

PROLONGED QUIET ON ISRAEL’S BORDERS

Clearly the sine qua non must be prolonged quiet on the Israeli frontiers. Sadat does not formulate his dilemma in such clear cut terms before his audience. But he already hints that the task of his generation was only to wipe out the 1967 disgrace. The next generation will have to continue the struggle from that point. He knows that no massive investments can be seriously contemplated unless donors are guaranteed against another outbreak of hostilities in the Suez Canal zone where $9 billion are called for by the rehabilitation plan.

Most Israeli analysts believe that Sadat is really trying to switch from Nasser’s external adventures to internal rebuilding. However, they point out that the major economic investments, especially along the canal, will not start immediately. At least a year or two will pass before Egypt is capable of entering the serious stage of development.

And here they find the clue to Sadat’s consideration. In two years he hopes to complete a settlement. After a disengagement is implemented at the Syrian front, he will push for quick resumption of the Geneva conference. If a deadlock is created there then a new war would be feasible without endangering the new economic project which will be, by then, only in its early stages.

In other words, Israeli analysts are convinced that Sadat can go on “waving both flags” for another year or two. If no settlement is reached by then he will have to make a decision as to how to combine his economic drive with another period of military confrontation.