Belmont Club

Trapped in the Frame

Sometimes politics is really about economics.  At a speech in the UN, President Obama attempted the situate the Palestinian drive for statehoood within the larger changes in the region, notably the “Arab Spring”.

In his roughly 35 minute address, the president went down a list of events in which he said nations “stepped forward” to maintain international peace and security, and “more individuals claimed their universal right to live in freedom and dignity.”

Beginning in Africa, he noted that South Sudan obtained its independence and the people of Ivory Coast had weathered its political upheaval and is now governed by the man elected to lead them.

Obama turned to the so-called Arab Spring, beginning with Tunisia, where he said people “chose the dignity of peaceful protest over the rule of an iron fist.” He then spoke about Egypt.

Eventually the President got around to the subject of Palestine and offered this advice: ‘return to direct negotiations with Israel, rather than pursue a statehood bid at the United Nations, either in the Security Council or General Assembly’. Notably missing from the President’s calculus was another process: the economic race for survival among the countries of the Middle East. That is the problem of the Middle East, not the political aspirations of two semi-terrorist organizations who plan to lead and loot a place called “Palestine”.

The UN says the Arab world and East Africa face a food crisis in which up to 750,000 people may die. The root cause, according to the UN was “climate change”, which unexpectedly reduced food production in developed countries, from which the region draws its sustenance. In other words the region, once the breadbasket of history, can’t feed itself.

Spengler at the Asia Times has another theory about the lack of food. It isn’t caused by “climate change” but by chronic underdevelopment caused by mismanagement. “Cairo, Egypt – the site of President Barack Obama’s effusive address to the Muslim world in June 2009 – is becoming the world’s epicenter of despair.”  He says the Arab Spring, while picturesque, has done nothing to fix Egypt’s economic malaise.

More than half of Egypt’s population has nothing to do, and lives on one form or another of public subsidy. The world economy does not want them. With a 45% rate of effective illiteracy, Egyptians are unfit for modern factory work, and the products of the university system mostly are unqualified for engineering or administrative jobs. As Egypt’s state finances disintegrate under conditions of unrest, the position of the redundant half of the country’s people is becoming desperate. It is hard to see how a catastrophe can be avoided now that Egypt’s tourism industry has dried up.

One hotelier described the conditions he had to face. “Loss of customers. Falling revenues. Increasing costs. Poor cash flow. Staff absenteeism and breakdown in cohesion. Disruption in supplier services. Potential shut-down of business.”

Tourism and leisure industry owners and operators in countries that have been affected by the “Arab Awakening” may face some of the above scenarios in the aftermath of a political crisis.

These issues may be compounded by the failure of the national government and private institutions, such as the banking system, utility suppliers, transportation and communications infrastructure, to name a few.

The long-term impact of a political crisis on the tourism and leisure industry may not be immediately apparent. When we look at the above issues in their entirety, however, our industry is potentially facing a major crisis.

Business is bad.  But the President’s speech — and indeed the viewpoint of the diplomats — routinely omits the crucial dimension of economics from the Middle Eastern political equation. Their “Grand Bargains” are conceived as diplomatic deals between big men and leaders; as understandings among armed factions and militias. As if this alone governed the world. But they very rarely touch upon the crisis of governance in the region, the sheer inefficiency, crony capitalism and waste of human capital that make the place so tragic.

Palestine is going to seek a state, not because its attainment will deliver a single additional loaf of bread onto the tables of its residents, but because that’s what they’ve always done.  That state is a solution to nothing. But it doesn’t matter because fighting Israel is what politicians in the region have been doing for so long that it has become an end in itself; an goal which unfortunately transfixes some policy makers, who have chased it with the tenacity of a dog pursuing a car, though nobody can say what to do when they get it.

But perhaps that is too harsh an indictment on the intelligence of diplomats. Some of them may now reluctantly accept that the only way to remove the weight of this unhealthy obsession, to lift the blinding cloak of this hatred that paralyzes everything is to remove the Jewish State itself.  They may argue that only with Israel gone can the region snap out of the trance and start making a living, building a country, starting a future.  To Golda Meir’s observation “peace will come when the Arabs will love their children more than they hate us” they have added their own: “the Arabs will start loving their children when the Jews are gone.”

The worst effect of diplomacy’s obsession with the Israeli-Palestinian problem is that it has obscured almost to the point of annihilation what would objectively have been regarded as the real problems in the region. Hunger, poverty and ignorance. The lack of political and economic freedom; the shortage of human capital; the lack of a functioning and modern business system are the real problems, only they are not. It is Palestine. That is the problem of the “frame” and they are trapped in their own “frame”.

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