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The Promise of Post-Oslo Peace
and Prosperity:
Fantasy in the Guise of Vision

Martin Sherman
Policy Paper No. 87, from the book,
Israel and a Palestinian State: Zero Sum Game?, 2001


The article presents a gloomy analysis of the economic prospects for the Middle East in general and for Israel in particular, as a result of the implementation of the Oslo "peace process". It points out that unless one is willing largely to "de-Arabize" a Palestinian state there is no reason to believe that its economic performance will be significantly better than the dismal economic performance of other oil-devoid Arab states. Furthermore, the essay exposes the basic contradiction in the position of Oslo advocates, who insist that even after the implementation of the peace process, Israel will still require a "strong army to maintain the peace". Unless one is willing to discount totally military threats from the co-signatories of peace agreements with the Jewish state, the new borders to which Israel will be obliged to withdraw will impose a huge escalation in the defense spending needed to deal with such threats. Thus, contrary to the claims of the Oslo adherents, this increased expenditure on conventional defense will not only reduce the amount of resources available for the civilian sector, but is also most likely to diminish the resources available for spending on defense systems against non-conventional threats from the "outer ring" countries such as Iraq and Iran. Likewise, the vision of an economically prosperous "New Middle East" is dismissed as dangerous fantasy. For there is little chance of establishing a new economic order on the basis of the prevailing political order in the region, where most of the regimes are military dictatorships which cannot permit the freedoms required for the promotion of pan-regional development. For Israel, the most prudent way to economic prosperity would be to adhere to the tried and tested method embodied in the classic Zionist formula of "one more acre, one more goat", that of gradual and doggedly determined progress which brought the country its considerable economic accomplishments up until the Oslo era.

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