Economic Sanctions

Economic sanctions can be a political tool to punish and hopefully stop or deter bad behavior by another country, group, firm, or individual. However, sanctions are rarely effective, often hurting the wrong people. Robert Pape’s examination of past sanctions on countries found that only 4% were clearly effective. Their virtue is that they tangibly register disapproval of bad behavior without going to war. An important policy question is when to use them. In my opinion sanctions should be used very rarely against countries when there is a broad global consensus that the behavior of the country is significantly and unacceptably at variance with established international norms. This is both because they are rarely effective, in part because they often hurt the general public rather than the leaders responsible for the bad behavior, and because it should generally not be the business of our government to dictate how other governments behave unless that behavior is directly against us. What that means, for example, is that sanctions should not generally be used against countries whose human rights behavior we disapprove of.

Under what circumstances might the use of economic sanctions be justified and effective? The effectiveness of economic sanctions varies greatly with their nature and the circumstances in which they are applied. In what follows I very briefly illustrate the range of experience and possibilities.

Cuba

Clearly the sanctions of one country against another, such as outlawing trade in certain products or outlawing trade and financial transactions of any sort, are of very limited effectiveness as the sanctioned country can simply trade with others instead. Cuba illustrates this point. First imposed over 50 years ago by President John F. Kennedy and now enforced through six different statutes, the United States forbids most trade with Cuba by its citizens or companies. President Bill Clinton extended and stretched the reach of this embargo to apply to the foreign subsidiaries of American companies as well. The purpose of this embargo as stated in the Cuban Democracy Act of 1992 is to encourage the Cuban government to move toward “democratization and greater respect for human rights”.

Though the U.S. has put a lot of pressure on other countries to restrict their own trade with and travel to Cuba, it has been largely ignored. The U.S. pretty much stands alone. The cost of the embargo has fallen more on the U.S. than on Cuba. The U.S. Chamber of Commerce estimates the cost to the U.S. economy at $1.2 billion per year in lost sales and exports. More over it has not improved governance in Cuba nor led to regime change. In 2009, Daniel Griswold, director of the Cato Institute’s Center for Trade Policy Studies, criticized the embargo by stating:

“The embargo has been a failure by every measure. It has not changed the course or nature of the Cuban government. It has not liberated a single Cuban citizen. In fact, the embargo has made the Cuban people a bit more impoverished, without making them one bit more free. At the same time, it has deprived Americans of their freedom to travel and has cost US farmers and other producers billions of dollars of potential exports.” Former Secretary of State George P Schultz called the embargo “insane.”

Cuba is a mess not because of U.S. sanctions but because of the highly repressive Marxist regime in control for the last 52 years. The American embargo has given the Castro government an escape goat for its own failures—and the Castro government still rules. President Obama recently reestablished diplomatic relations with Cuba but the embargoes will remain until Congress amends or removes them. The President has been criticized for not getting enough in return for reestablishing relations and its link with Cuba’s freeing of American spy Alan P. Gross is certainly unfortunate, but the U.S.’s diplomatic recognition of a country should have nothing to do with whether we approve of its government and its approach to governing. The 50 plus year-old embargo has totally failed in its objectives as well, which were not justified in any event. It should finally be lifted and we, and our government, should continue to criticize the Cuban government’s oppressive and destructive policies.

Iran

Economic and financial sanctions against Iran have been more successful. Though the U.S. initially imposed limited sanctions following the Iranian revolution in 1979, international sanctions were imposed by the U.N. Security Council in 2006 and later by the EU in response to Iran’s refusal to suspend its uranium enrichment program. These sanctions banned supplying Iran with nuclear-related materials and technology, and froze the assets of key individuals and companies related to the program. In the following years these sanctions were expanded to include an arms embargo and broader freezes on assets held abroad and monitoring the activities of Iranian banks, and inspecting Iranian ships and aircraft.

These sanctions have reduced Iran’s export (largely oil) revenue and sharply restricted its imports of materials needed for its uranium enrichment program. The international arms embargo has negatively impacted Iran’s military capacity as it is now reliant on Russian and Chinese military assistance. The U.S./EU embargo on oil shipments was made more effective when the EU extended its embargo to ship insurance resulting in most supertankers refusing to load Iranian oil. Excluding Iran from international payments via SWIFT has significantly complicated such payments. The value of Iranian rial plunged by 80% and the standard of living is suffering.

While smuggling has allowed wide spread evasion of many restrictions, they significantly raise the cost of, and thus reduce the gains from, trade. In the list of unintended consequences, Fareed Zakaria argues that sanctions have strengthened the state relative to civil society because in Iran the market for imports is dominated by state enterprises and state-friendly enterprises, thus smuggling requires strong connections with the government.

While it is difficult to assess the impact of sanctions on public attitudes, they seem to be succeeding in increasing pressure on the government to reach an agreement with the U.S. and EU to reign in its uranium enrichment program. This qualified success reflects the broadly accepted purpose for the sanctions (thwarting Iran’s nuclear weapons potential), and hence broad (but not universal) enforcement of such sanctions.

Islamic State — Da’ish

Da’ish is not a recognized state but is so widely seen as an evil pariah that it constitutes an entity and cause for which sanctions should have their maximum impact. Moreover it is being resisted and attacked militarily as well. While direct U.S. military engagement would be counterproductive in the long run (it is their region and interest, not ours), logistical and weapons support to the government of Iraq and close coordination with Iraq’s neighbors has been and will be helpful. Blocking every possible source of income, payments, and weapons procurement by Da’ish will gradually degrade its ability to fight and to hold on to the territory it needs to fulfill its Islamic caliphate objective.

When virtually the whole world is behind sanctions, we have many tools and capability to make them effective. But even in this most obvious and potentially effective case, there are challenges. While strongly and rightly defending the right of anyone to offend the Prophet or anyone else we can hardly forbid public statements in support of Da’ish. The British “human rights group” CAGE, for example, is under attack for calling Jihadist John “a beautiful young man.” The group, led by former Guantanamo Bay inmate Moazzam Begg, is being attacked by both public and private groups in the UK for its jihadist sympathies. Similar issues exist in the U.S. Read more: http://www.dailymail.co.uk/news/article-2972757/Fury-charities-fund-ISIS-Jihadi-John-apologists.html and http://www.bbc.com/news/uk-31657333

But what about financial support to terrorist groups from their sympathizers? Striking the right balance between fighting terrorists and freedom of expression will require care. Who of my generation can forget the controversies raised in the 1970s and 80s over the financial contributions of Irish Americans and their charities to the Irish Republican Army (officially a terrorist group)?

Russia

In general, the modern world is blessed with many positive incentives for people and countries to behave well. The broadly embraced values of the Enlightenment, and classical liberalism’s respect for each individual and his and her rights has established a presumption against force and coercion and hence against war. It is far more profitable (for both sides) to buy what we want than to try to take it (trade vs war). But unfortunately this has not always been enough to deter bad behavior necessitating consideration of deterrents. Russia’s President Vladimir Putin, whose behavior I can only understand as that of a self enriching gangster who is happy to exploit the fears and paranoia of the average Russian to enhance his power and control, but who cares little for the future well being of his country, is grossly violating post Westphalian principals of sovereignty. Our interest in Ukraine is marginal and Putin’s is intense for reasons of Russian history and its emotional value for Russian support of its new autocrat. U.S. intervention of any sort in Ukraine would likely precipitate intensified interference by Russia. Where and when would the escalation on each side end? Would Russia’s bankruptcy end the fighting before reaching the nuclear level? We should not try to find out. Whether we should provide the pro west Ukraine government with defensive arms is a more difficult question, but would risk ill-advised escalation by Ukraine, a risk we should not take. This leaves us with economic sanctions as the most appropriate deterrent of Russia’s bad behavior.

Interestingly and frustratingly the vary interdependencies that develop with trade also create weapons that can be used by either side to promote a country’s aims. Da’ish is not in a position to deprive us of anything in retaliation to sanctions we impose on it. Even shutting down all exports of oil in the territories it controls or is likely to control would be barely noticed. On the other hand, Russian threats to shut off the flow of oil and gas to Europe and especially Germany, which receives 40% of its oil from Russia, must be taken very seriously. All of the natural gas consumed in Estonia, Finland, Latvia, Lithuania, and Macedonia comes from Russia as does over 50% in Bulgaria, Czech Republic, Greece, Hungary, Montenegro, Serbia, Slovenia, Turkey, and Ukraine. A Russian cut off of gas and to a lesser extent of oil would be devastating to Europe. On the other hand, the loss of that revenue would be devastating to Russia. This is the two-sided nature of trade. It introduces caution into measures to harm trading partners.

Russia’s recent deal to supply oil and gas to China will reduce its reliance on its European market and hopefully Europe will also take steps to reduce its reliance on Russia. However, the U.S. has moved slowly if at all to increase its capacity to ship gas and oil to Europe, which is currently heavily dependent on existing pipelines from Russia. Russia has spent billions of dollars in Europe through environmental groups and others to discourage the development of Europe’s oil shale potential and to encourage the reduction of its use of nuclear energy. http://www.thenewamerican.com/world-news/europe/item/18546-nato-head-russia-is-funding-anti-fracking-movement http://www.washingtontimes.com/news/2015/feb/2/richard-rahn-vladimir-putin-funding-opposition-to-/

Sanctions so far have been carefully (and wisely) targeted to a few specific individuals and companies. It is difficult to determine whether they are having any effect on Putin’s behavior. If they are increased, the risk of Russian retaliation will increase as well, the burden of which would fall on Europe, not the U.S. Russia has cut off the flow of its gas and oil to Europe before for relatively short periods but has resisted doing so for the last few years. Putin is now threatening it again: http://www.washingtonpost.com/world/europe/putin-threatens-to-cut-gas-to-ukraine-as-showdowns-shift-to-economy/2015/02/25/b0d709de-bcf6-11e4-9dfb-03366e719af8_story.html.

Putin’s behavior justifies increasing sanctions but they should remain well targeted. A total blockade of Russia, which would be extremely difficult for Europe, would lead to a collapse of the Russian economy with unpredictable political consequences. The collapse of the Soviet Union in 1991 following the end of the cold war in December 8, 1987, with the signing of the Intermediate Nuclear Forces (INF) Treaty launched the transition (for a while) to a more liberal regime. It was the most dramatic and totally peaceful regime change the world has ever seen, but it took 70 years of patience to achieve. In a letter to this week’s Economist former British Ambassador to Russia Sir Tony Brenton said: “The solution to the Russia problem is not to sanction and isolate, but to hug close and thus, eventually, subvert.” We have a strong interest in an orderly political transition in nuclear-armed Russia.

Israel

Ironically the opposite side of the page of the Washington Post story on Russia linked above reported on the very disturbing use of economic sanctions by Israel against the Palestinians living in the West Bank. Israel refused to turn on the promised water to a new upscale city (residences, shopping mall, theater complex, sports club, school, etc.) being built on a West Bank mountaintop. “Before granting water access to the planned city of Rawabi, Israel — which controls the area that the water pipe would run through — wants Palestinian Authority officials to return to an Israeli-Palestinian Joint Water Committee. The Palestinians abandoned the group in 2010 because they don’t want to approve water projects to Jewish settlements in the occupied West Bank, which are built on land that Palestinians want for a future state — and which still get plenty of water.” http://www.washingtonpost.com/world/middle_east/new-palestinian-city-has-condos-a-mall-and-a-sports-club–but-no-water/2015/02/24/d5a28dcc-b92e-11e4-a200-c008a01a6692_story.html

After driving Palestinians from their homes in the war of 1948 that established the Jewish state of Israel, the new state of Israel and the international community accepted boundaries between Israel and the rest of Palestine that were somewhat enlarged from the UN approved partition of Palestine into Israel and the West Bank and Gaza Strip. The right of the 700,000 displaced Palestinians to return to their homes remain one of the unresolved issues in the Israeli-Palestinian dispute. The Jewish settlements referred to above are in the West Bank and have been ruled illegal in a number of UN resolutions and U.S. State Department opinions. http://works.bepress.com/warren_coats/26/

On several occasions Israel has also withheld the import tariffs that it collects on behalf of the WBG government (the Palestinian Authority) in order to pressure the PA not to challenge the construction of additional illegal settlements in the West Bank. “To protest the Palestinian Authority’s move this year to join the International Criminal Court in The Hague, Israel has also withheld for three months the transfer of $381 million in custom duties Israel collects on Palestinians’ behalf.” http://www.washingtonpost.com/world/middle_east/israel-to-let-water-flow-to-west-bank-development-at-center-of-political-feud/2015/02/27/d1b598de-be84-11e4-bdfa-b8e8f594e6ee_story.html

These are examples of a country’s use of “sanctions” to achieve its own, not widely shared, political ends. In the New York Times Nicholas Kristof said: “The reason to oppose settlements is not just that they are bad for Israel and America, but also that this nibbling of Arab land is just plain wrong. It’s a land grab.” http://www.nytimes.com/2015/02/26/opinion/nicholas-kristof-the-human-stain.html?_r=0 The same can be said of Russia’s land grab in Ukraine.

Fortunately in the case of Israel, Prime Minister Netanyahu intervened on February 27 and approved turning on the water before traveling to the U.S., presumably worried about bad press from Israel’s behavior, something President Putin unfortunately but predictably doesn’t seem to care about.

Romney on Culture

Mitt Romney is clearly an intelligent guy with an impressive business track record. This makes it all the more disturbing that while visiting Israel Romney felt called upon to blame the difference in living standards between Israel and the occupied West Bank and Gaza (WBG) on cultural differences. I will unpack the ignorance of this claim further on, but first, why did he do it?

We know that Romney is weak on foreign policy issues and regrettably influenced in this area by neocon advisors who tend to favor the one Israeli state solution to the Israeli/Palestinian problem favored by the Israeli right wing over American interests and policies. Since George W Bush American policy has explicitly supported a two state solution. Those unfamiliar with the history of these issues are urged to read my earlier blogs on the topic: “The View from the West Bank – a history of the conflict”, “Jerusalem in august 2006″, “Leaving Israel August 11 2006″. “The Invented Palestinians”.

The United States has a strong commitment to the military defense of Israel and it was appropriate for Romney to restate that commitment while visiting Israel. But it is neither in our national interest nor Israel’s to support or endorse every measure the current Israeli government might think up or take in relation to its neighbors. Israel’s well being depends on making a just peace with its neighbors and returning the West Bank and Gaza to the Palestinians that live there. This is well known and accepted by most Israeli’s but not, apparently, by Romney’s neocon advisors. Given Romney’s lack of understanding in these issue, wisdom would have called for him to remain silent on the issue. So why did he say it, then deny it and than say it again?

First, what did he actually say? According to the Associated Press (“Romney outrages Palestinians by saying Jewish culture helps make Israel more successful”) on July 30 Romney told a breakfast meeting with wealthy donors at the King David Hotel in Jerusalem:  “As you come here and you see the GDP per capita, for instance, in Israel which is about $21,000 dollars, and compare that with the GDP per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality…. And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things.”

Saeb Erekat, a top Palestinian official told the AP: “What is this man doing here? Yesterday, he destroyed negotiations by saying Jerusalem is the capital of Israel, and today he is saying Israeli culture is more advanced than Palestinian culture. Isn’t this racism?”

The next day in an interview with Fox News’ Carl Cameran in Poland, Romney denied that he has spoken of the role of culture in the differences in income between Israel and Palestine. (Cameron interview of Romney) It did not take long for Romney to correct this misstatement in a National Review article under his name, “Culture does matter-Mitt Romney”: “During my recent trip to Israel, I had suggested that the choices a society makes about its culture play a role in creating prosperity, and that the significant disparity between Israeli and Palestinian living standards was powerfully influenced by it. In some quarters, that comment became the subject of controversy.”

So why did he say it?  Sadly Tom Friedman probably has it right in his July 31 column in the New York Times: “Why not in Vegas”  “Since the whole trip was not about learning anything but about how to satisfy the political whims of the right-wing, super pro-Bibi Netanyahu, American Jewish casino magnate Sheldon Adelson, why didn’t they just do the whole thing in Las Vegas? I mean, it was all about money anyway — how much Romney would abase himself by saying whatever the Israeli right wanted to hear and how big a jackpot of donations Adelson would shower on the Romney campaign in return.”

So statesmanship, diplomacy, American national interest had nothing to do with it. So maybe Romney actually understood how stupid his comments were. But let me walk us through the facts.

First, Palestinians and non Arab Israelis are first cousins racially. So this can’t be what Romney had in mind. Religiously, Judaism, Christianity, and Islam, the three great monotheistic religions, with Islam the most recent in that evolutionary chain, all share cultures of individual responsibility and work ethic. So it is hard to see Romney’s point in this area. My point is not that culture is unimportant, though calling in “everything” is clearly wrong. My point is that anyone who knows anything about Israel and the WBG, knows that it does not apply there. A very informative and well worth reading criticism of Romney’s statement is in Fareed Zakaria’s Aug 2, Washington Post op-ed, “Capitalism not culture drives economies”.

If Romney had driven the short, but time consuming, distance from Jerusalem to the temporary Palestinian capital in Ramallah, he would have seen some of the physical evidence of how Israel is choking the economies of the occupied, land locked West Bank and the blockaded Gaza Strip (high concrete walls cutting through Palestinian farms, check points blocking the movement of people and commerce, illegal Israeli settlement on Palestinian lands, etc.). I would have thought that a man of Romney’s intelligence would chose to remain silent on these deeply explosive issues until he could consult a more balanced group of foreign policy experts. Sadly he seems to have put politics above national interest.

The Invented Palestinians

Five years after a previous visit to Israel and the West Bank and Gaza (or the OPT—Occupied Palestinian Territory—as the UN and the Palestinians call it), I am once again residing in the charming American Colony Hotel. As on my two most recent previous visits (in 2005 and 2006) I am advising the Palestine Monetary Authority that I helped set up in the mid 1990s on strengthening its capacities as a central bank and preparing to issue its own currency should the political and economic situation ever justify doing so.

The American Colony Hotel, now decked out for Christmas (see pictures), has a long history here—over 150 years—and has hosted many interesting guests. There are the politically important visitors such as Winston Churchill, Mikhail Gorbachev, Senator George Mitchell, George Shultz, James Wolfensohn, Kofi Annan, and T. E. Lawrence. There are the artistically important visitors such as Graham Green, Leon Uris, Saul Bellow, John Steinbeck and Marc Chagall. There are some big names in the media business such as Ted Turner and Barbara Walters and in music such as Sting and Juan Baez (my personal favorite). The list of movie starts is long, including Sir Ben Kingsley, Lauren Becall, Peter Ustinov, Ingrid Bergman, Omar Sharif, Richard Gere, Uma Thurman and Vanessa Redgrave. But the one that tickles me the most is Peter O’Toole, who visited here many decades after the visit of T.E. Lawrence who he portrayed in Lawrence of Arabia.

The Hotel is in East Jerusalem, that part of the city that is in the West Bank, OPT, or Palestine as you wish, that was occupied by the Israelis in the Six Day War of 1967. Following that war, famous visitors were generally making a political statement in favor of peace. The American Colony was considered neutral territory. I have written a lot in the past about the Israeli-Palestinian situation and if you are interested I urge you to reread earlier blogs (posted here for the first time): “The View from the West Bank – a history of the conflict”, “Jerusalem in august 2006”, “Leaving Israel August 11 2006”.

While here this past week, American politicians demonstrated again a lack of balance and/or understanding in addressing the truly difficult situation here. In the case of Newt Gingrich, who brushed aside the desire of Palestinians (Arabs or whatever you want to call the people driven out of their homes by Zionists sixty years ago and the Israeli Defense Forces almost 45 years ago) to return home, it is surely blatant dishonestly and vote pandering, as he knows better. The Israeli Press is ablaze with debate about Newt’s comments (as it always is about something), and Israel’s political relationship with the U.S. more generally.  Secretary of State Hillary Clinton’s visit and comments about women are still reverberating.

Balancing America’s commitment to the military defense of Israel with promoting the peace in the region that we rightly see as essential to Israel’s well being, has grown particularly difficult of late. President Obama stated the obvious several times during his administration (Israeli settlements being build in the West Bank are illegal, and the border between Israel and a new Palestinian state should be based on the borders of Israel approved by the UN long ago) then rolled over dead in the face of Israeli President Netanyahu’s (who we know from French President Sarkozy is a liar) shouts of outrage.

I had not appreciated before that when some Israelis quote Hamas and some other Palestinians as refusing to recognize Israel’s right to exist (which sounds rather like the desire for another holocaust) they are referring to the Palestinian demand for their “right to return” to their homes, the other insoluble issue preventing a resolution of the Israeli Palestinian conflict. Two articles on the front page of Monday’s The Jerusalem Post illustrate the issue. The banner article was titled: “Cabinet approves plan to fight illegal infiltration; Netanyahu: We will close businesses, so that the enterprise known as the State of Israel does not close – PM to consider repatriating workers when he visits Africa.” What is this all about? Statements by Israel’s Justice Minister, Yaakov Neeman, in the article just below the one quoted above help clarify that question.

Reacting to criticisms from visiting American participants in the Jewish Council for Public Affairs (JCPA) leadership mission to Israel of pending legislation containing loyalty oaths, the Minister scolded the American’s with raised voice saying: “There is no discrimination in any of the legislation…. We will have a majority of non-Jews if not. This is a Jewish state. If you don’t like it, you can move to another country.” He followed this with: “All Jews need to come home to Israel. I want them here. A Jew who doesn’t live here in Israel is not doing the most important thing.”

The Minister and many Israeli’s want a democratic Jewish state. That required them to drive out those living here who were not Jewish and preventing them and other non-Jews from returning (about 20% of Israelis are Arab). The refusal of Hamas and some other Palestinian’s to accept the legitimacy of the Israeli state is not anti-Semitism, it is an expression of their demand for their “right to return” home. It is anti-Zionist.

Israeli Jews are divided on this issue. Palestinians are divided as well. Those in the West Bank and living in Jordan as Jordanian citizens lead relatively prosperous lives and are prepared to give up their past claims on their homes and move on. These Palestinians are generally well-educated and hard-working. For them some token return of a few hundred thousand of the almost 5 million Palestinians driven out of their homes would be enough. But those 1.4 million still living in refuge camps after all these years (largely in Gaza, Lebanon, and Syria) have little to gain from, nor interest in, moving on. This split in the Palestinian ranks largely reflects the Hamas – Fatah divide.

Why then hasn’t the U.S. and the Quartet (U.S., EU, UN, and Russia) focused more on better treatment and integration of refuges in their host countries, largely Lebanon, following the good example of Jordan? And why has Israel so often frustrated the economic development of the West Bank and especially Gaza where most of the refugees still living in camps can be found. There in lies a very complicated story of conflicting interests among Israeli Jews, and among Lebanese political groups. The Lebanese do not allow Palestinians to work or become citizens for fear they will upset the delicate, existing balance between Christian, Sunni Muslim and Shea Muslim political groups and interests. The political conflict in Israel between those wanting a greater Israel and turning a blind eye if not actually encouraging illegal settlements in the West Bank and the peaceniks who favor a “two state solution,” is complicated by monopolistic business interests who continually use their economic and political influence to stifle (if not crush) economic competition from often very adept Palestinian enterprises. Thus no proposal for peace with the West Bank and Gaza can gain wide-spread support in Israel or in Palestine.

The Governor of the Palestine Monetary Authority told me at dinner last night that he feared that the resent wave of so-called “price tag” attacks on Palestinians and mosques in the West Bank and on the IDF (Israeli Defense Force) by right-wing Ultra Orthodox Jewish settlers risked turning what is now a territorial dispute into a religious dispute (Muslims vs Jews). For decades Ultra conservative Jews would park their campers in target areas of the West Bank and stay. When they were harassed by Palestinians for being on Palestinian property, the about to become settlers would seek protection from the IDF, which has occupied the West Bank since the Six Day War. Some months later they would demand adequate water and waste disposal, and then electricity and a few years later they would demand permission to build homes their on the grounds that they had already been living there for some time.

Many Israelis have lost patience with these settlers and periodically the IDF remove them from their illegal settlements. The settlers have dubbed their current attacks on the IDF as the “price tag” for being evicted from their illegal settlements. But right-wing Israeli governments have tolerated the continued advances of these settlements for years. The mystery is that the U.S. seems to tolerate it too. Netanyahu’s sharp rebuke of President Obama’s criticism of the settlements last year and Obama’s quick back down is a case in point. For the moment, the Israeli government seems to be creaking down. According to the Jerusalem Post: “IDF feels that to tackle ‘price-tag’ phenomenon, the gov’t needs to toughen legislation, increase policing, send a clear message.”

The United States has already faded as a major influence on events here. Speaking the truth would be the best way to serve the best interests of our friends in Israel, Palestine, and region. It would help if Newt Gingrich and other politicians stopped pandering to the Jewish and religious right voters in America who ally with them with unprincipled and inaccurate characterizations of the situation here in Israel and the Occupied Palestinian Territory. “Look who is talking about ‘invented’ peoples”

Leaving Israel, August 11, 2006

This is the re-posting of an earlier note:

Hi from Home

Sorry for two notes so close together, but travel conditions today warrant an update after British authorities arrested 24 terrorists who planned to blow up 10 planes over the Atlantic yesterday. I left Israel this morning on Lufthansa with the Governor of the PMA heading for Washington DC. We assumed that we were on the same flights all the way. Thus in Frankfurt I followed him to his gate. After one hour of extra security procedures we arrived at the gate to discover that we were on different flights and I was in the wrong terminal. Thus I passed through another security check point in the correct area and boarded my flight. To my disappointment the plane lacked the sleeper seats I was expecting. I am afraid that I grumbled about it to the steward. Half an hour later my name was called along with 5 other first class passengers and informed that we were being moved to another flight using a 747 with proper seats. The steward whispered that it was because of my complaint. This, however, meant that we had to go through the original security check point yet again. This time they took away my toothpaste and other similar items from my PC bag. They were not impressed when I told them that all of these items had passed through there three hours earlier. Go figure. Anyway, I am home safe (except for the security warning about demonstrations in Washington against US support of Israel’s war against Lebanon).

I would like to share with you the experience last week of one of my fellow advisors at the Palestine Monetary Authority (PMA). He was leaving Gaza, where the PMA has a branch, to return to Ramallah where I was working when he and his driver come under fire from an Israeli tank. This occurred at the Palestinian side check point of the border crossing from Gaza into Israel (the only way to get to the other part of Palestine in the West Bank). The gun fire lasted three hours during which he spoke by phone from the floor of his car to the Governor of the PMA and the U.S. Embassy. He is a fellow American and was born and raised in Virginia. You will be shocked, as he and I were, at what the American Embassy said to him. The woman on the phone said that his name, Akram Baker, sounded Arabic and asked if he was of Palestinian decent. He said yes. She asked what he was doing in Gaza and informed him that the Israeli government does not want American’s of Palestinian decent in Gaza and that the U.S. government would not help him. Israel basically keeps Palestinians living in Gaza prisoners within Gaza and makes it very difficult for Palestinians to enter and leave Gaza. The PMA Governor contacted the Palestinian President Abbas who got the Israelis to call off their tank. We seem to have a new second class American citizen.

The day before this incident one of the PMA employees in Gaza and her daughter were killed by an overhead Israeli helicopter. Akram asked me how I would define terrorism and answered his own question by saying the UN defines it as terrorizing (intimidating, frightening, even murdering) civilians in order to promote some political or ideological goal. Doesn’t that describe, Akram asked, Israel’s continued use of collective guilt and pressure against Palestinians to pressure their government to control terrorists in their own midst. For example, placing dozens and dozens of check points throughout the West Bank to make it difficult for Palestinians to travel around their own homeland (I had to go through two permanent check points every morning and again every afternoon between East Jerusalem and Ramallah—all in the West Bank—plus the occasional impromptu ones). Or closing the border to Palestinian day workers in Israel whenever a suicide bomber blows himself up in Israel? Or by arresting Palestinians legally and fairly elected to the Palestine National Authority (PNA) Parliament for simply being members of the Hamas political party because some terrorists affiliated with some members of Hamas held an Israeli solder. Or by destroying vast parts of Lebanon’s infrastructure and killing over a thousand of its men, women, and children to punish them (Christians included) for not being tougher against Hezbollah fighters in their midst (before the current war, a majority of Lebanese opposed Hezbollah and now a majority support them). Or, killing the PMA employee and her daughter as they walked down the street because they “tolerated” Palestinian terrorists in their midst who held an Israeli solder hostage.

For Palestinians, Akram said, Israeli solders are terrorists. That is why Palestinian children sometimes throw stones at the Israeli solders as they drive through their neighborhoods. It is the only weapon they have. A few become suicide bombers.

But what is Israel to do to defend itself when so many of its neighbors do not accept its right to exist. Become a better neighbor perhaps? But what does it mean that many Arabs do not accept Israel’s “right to exist?” This is a sanitized reference to the desire of many Palestinians to drive Israelis back off the land they took from Palestinians in 1948 and 1967. Hamas, Islamic Jihad, and other Palestinian terrorists are the small minority that cannot get over that historical fact and move on. Most Palestinians—everyone I have ever met—have moved on and would just like the Israelis to withdraw from the territories the UN demands them return (West Bank and Gaza) so that they can get on with their lives. In fact, like almost all political movements anywhere, Hamas really simply wants to govern like any other political party and has separated itself from its militant wing (sounds like the IRA of old). It is in Israel’s interest to make normal political participation more rewarding for Hamas than terrorism—to let Hamas or any other elected government succeed or fail on their merits and to hold them accountable for their performance. Israel and the rest of us should do all possible to help the Palestinian government succeed. A successful Palestine would be a safer neighbor for Israel. Instead, Israel has stopped transferring the taxes it collects for the Palestine government on imports through Israel, proliferated walls and checkpoints throughout the West Bank and made proper administration by the Palestinian government impossible. Now the failure of the PNA will be blamed on the U.S. and Israel. When will they ever learn,… when will they ever learn.

Jerusalem in August 2006

This note was written in August 2006 following the earlier (October 2005) posting of a brief history of the Israeli Palestinian conflict: “The View from the West Bank – a history of the conflict”

Hi from Jerusalem (East Jerusalem for those of you in the know),

After leading the IMF technical assistance teams that helped establish the Palestine Monetary Authority in 1995 and 96, I returned a year ago to prepare a blue print for the steps needed for the PMA to introduce its own currency some time in the (ever more) distant future. People in the West Bank and Gaze largely use the Israeli shekel and to a lesser extent the Jordanian dinar for payments and contracts. Keeping the notes in good condition and clearing checks in shekel requires arrangements with Israeli banks. These banks recently notified the PMA that they intend to end these arrangements soon. I have returned to help the PMA figure out what to do.

The political situation in and around Israel has gone from bad to worse, to much worse. You may substitute Iraq for Israel in the previous sentence as well. When Palestinians democratically elected representatives of Hamas in enough numbers to take over the government of the West Bank and Gaze (the Palestine National Authority) from the ineffective and corrupt government of Al-Fatah (Arafat’s party), political life for Israel and the West became more complicated. The military wing of Hamas is on the U.S. list of terrorist organizations, as is Hezbollah, the Lebanese terrorist group sponsored by Iran and Syria. Hezbollah also has democratically elected representatives in the Lebanese Parliament.

Israel is now at war with Hezbollah and more or less with Hamas. At least one well-known American commentator argued that Israel has a moral right to defend its borders and thus to attack Lebanon (its bombs have fallen on far more than its Hezbollah enemy). This totally and tragically misses the point. Israel is again acting against its own interests, which in the case of Hezbollah is to help build a strong Lebanese government and army that can disarm Hezbollah (as demanded by the UN) and enforce a peaceful and secure border with Israel.

I shudder at those who argue that (if you are strong enough) you just need to smash your enemies. Be tough. They don’t seem to live in the same world I do. Can the Shi’a Muslim Iraqis who now dominate the Iraqi government really wipe out all Sunni Muslim terrorists in Iraq or can the Sunni and Christian Lebanese and the Jewish Israeli’s really wipe out the Shi’a Hezbollah terrorists in Lebanon? Walid Jumblatt, the leader of Lebanon’s Druze community and a harsh critic of Hezbollah stated Saturday that “We have to acknowledge that they [Hezbollah] have defeated the Israelis….” Being tough and launching war on Hezbollah/Lebanon has greatly weakened Israel (militarily, economically, and politically), just as the miscalculated U.S. attack on Iraq has weakened America (militarily, economically, and politically). These acts of war have weakened the security of both of our countries, not strengthened it.

Wars between tribes and religious factions can only be “won” diplomatically. The infamous Hatfields and McCoys ended their vicious cycle of feuding only when they mutually came to accept that they would never succeed in totally exterminating the other. There would always be a son, or a relative, or a friend of a son left somewhere to carry on the hatred and revenge. The famous feud ended only when a combination of carrots and sticks and harsh experience led both sides to accept a credible truce as the best that they could do. Read or watch again Shakespeare’s Romeo and Juliet and weep.

A few weeks ago I watched a TV reality show called “The Nanny” (please done ask me why). In the show the well-meaning and conscientious parents of three little monsters were sinking into despair as their spoiled and confused kids walked all over them. The parents were not dumb, but they were failing as parents. My first reaction was that the Third Geneva Convention (on the Treatment of Prisoners of War) should be suspended for these awful brats. Where is George W when we could really use him? The British Nanny brought in to save this family, was wise indeed. She found as many ways to pull out and encourage the cooperation of the children (carrots) as she did to establish clearer and more consistent rules and punishments for violating them (sticks). In short, she found the right balance of incentives that encouraged these children to redirect their considerable energies into positive and pleasant behavior that became a joy to be around. It was brilliant. It is what societies need as well—values and rules under which everyone can get along. I am sure that you have seen perfectly behaved but regimented and dull children and laud, rude and out of control ones and said to yourself, please don’t make me have to be around either.

My boss in Baghdad emailed me last week: “Please don’t go to Jerusalem.  I don’t think that you will be safe there.  Come back to Baghdad.” She has quit a sense of humor. The security situation in Iraq has finally degenerated beyond my comfort level and I have not returned to Baghdad since December despite many requests to do so. I have been highly critical of that war, when we should be fighting Al-Quaeda in Afghanistan and elsewhere (they didn’t exist in Iraq until we attacked it). And I have been even more critical of our ineffective follow-on efforts to establish a stable democracy there. However, there is one aspect of our conduct of that war I am proud of.

Every war has produced atrocities (torture, rape, murder, etc). It is a tragic and unavoidable part of war. We are again seeing examples of this ugly fact with the revelations of the killing of 24 Iraqis, mainly women and children, by American Marines in Haditha in the heat of war. The rape of an Iraqi girl and murder of her family by an American solder (Steven D. Green) in Mahmoudiya was purely criminal. Four of his U.S. Army buddies have also been arrested in connection with those crimes. Iraqis are not surprised that Americans have done these things (in very limited quantities). But they are surprised at the openness with which we expose and punish them. We can be very proud of that. It gives credence to our belief that we try to live by high principles.

Our principles of government revere openness and honesty—what more recently has come to be known as “transparency.” We can thank our free press for making that principle meaningful. While the most professional, well-trained, and well armed military in the history of mankind protects our freedom from attacks from abroad, the most professional and dedicated press in the world protects us from attacks on your freedom at home. Our practice of transparency is the ultimate check and balance on government (or corporate or labor) abuse. When combined with the high standards that guide our military leaders, transparency has helped contain the abuses of power that exist in every military, police force, and government. Three cheers for our free press.

I hope that all is well with you.

Warren