- The Washington Times - Sunday, May 29, 2011

When he unsuccessfully tried to cut Israeli Prime Minister Benjamin Netanyahu off at the (congressional) pass with a purportedly seminal speech, President Obama laid out a rather immodest economic agenda for the Arab region. The “developmental” proposals were immediately overshadowed by his unfortunate call for 1949 Israel-Arab armistice lines as the basis for any Israeli-Palestinian settlement.

Still, this speech, Mr. Obama’s third ballyhooed proffer to the Arab/Muslim world, was somewhat more realistic. At least we were spared another call for “a Middle East Marshall Plan.” The severity of Washington’s economic problems and the euro crisis made any such new “initiative” with big bucks a non-starter.

Soaring visionary rhetoric often gets out of hand, ignoring, for example, major differences of time and place. It was the Europeans — contrary to the myth that it was Washington’s genius instead of American dollars — who rebuilt their own industrialized economies from wartime ruins. Nor were the Europeans “nation-building” and attempting “take-off” for an “underdeveloped” economy — politically correct jargon to disguise attempts to modernize backward societies by creating nation-states out of whole cloth.

But Mr. Obama’s new proposals were just about as vapid. And there was a glaring omission: His recommendations — debt relief, encouragement of private investment, expansion of trade — trumpeted no call for Arab petro-sheikhs to put their vast dollar holdings where their mouths are.

In Mr. Netanyahu’s somewhat condescending if accurate review before Congress of Mideast history since 1947, one base left untouched was the obvious parallel between the region’s Arab and Jewish refugees. Some 800,000 Arabs originally fled or were expelled from a small part of the British Mandate for Palestine when six Arab states tried to smash a U.N.-proposed but self-proclaimed Jewish state. Almost the same number of Jews, curiously enough, who had lived, many for centuries, in Muslim countries, simultaneously fled for their lives. The wealthier ones (particularly in French-colonial North Africa) immigrated to Europe. But the vast majority, with little more than the clothes on their backs, was absorbed by the nascent Israeli state funded by the Jewish diaspora Zionists and generous American taxpayers.

Nothing like that happened for those seeking refuge in the vast, oil-rich Arab world. Israel’s Arab neighbors mostly refused to accept the new arrivals, even many with tribal and family affiliations. Worse, the Arab regimes — with enthusiastic help from often incompetent, prejudiced United Nations do-gooders — chose to create “open political sores” — surrounding Israel with semi-permanent, fetid refugee camps. And despite occasional highly publicized “aid” checks, Arab regimes have not made any effort since to address the problem.

That, as they say, is history. But one new fact on the ground is the current economic boom in what everyone but the Israelis and the Palestinians calls “the West Bank.” Mr. Netanyahu can claim some credit — as he certainly can for the roaring Israeli economy for breaking the socialist hold on his own countrys economic policy that held back more rapid growth. Jerusalem, for its own purposes of course, has encouraged the Palestinian entrepreneurial elite, boosting West Bank GDP growth to more than 10 percent annually. In describing conditions Mr. Netanyahu may have overstated things a bit, but once again Palestinians have demonstrated what they can accomplish when they turn from obsessive revenge.

That’s not new. On the eve of the first Iraq war, individual Palestinian refugees were already widely recognized in the professions and business circles in the Gulf States. But Palestinian politicians — not excluding Jordan’s King Hussein, facing pressure from his own “Palestinian” majority — sided with Iraqs Saddam Hussein against the U.S. and even Washingtons Arab allies. The Palestinians were again expelled, for example, from Kuwait, where many had made good before Saddams forces invaded.

In his speech, again for what it was worth, Mr. Obama inferentially acknowledged one important if little respected fact of the last half-centurys experience: Government-to-government economic “aid” to pre-industrial economies largely has proved a dismal failure, especially when administered by multilateral agencies.

Unless and until the Arab/Muslim states break with their traditions of reliance on foreign subsidies, state capitalism, cronyism, protectionism, hypocritical redistributive strategies and threatening political rhetoric, they will remain backward and at the mercy of domestic instability and outside forces. Whether that can happen without a commensurate revolutionary break with Islamic religious obscurantism is doubtful. But Mr. Obama did not touch on that forbidden subject, either.

Sol Sanders, veteran foreign correspondent and analyst, writes weekly on the convergence of politics, business and economics. He can be reached at sol.sanders@cox.net.

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