BigMo’s Blog

Politics and Economics in Israel

Shooting Ourselves in the Foot?

25 February 2010
Rehovot, Israel

For quite some time it’s been said, the Palestinians never miss an opportunity to miss an opportunity. Lately, however, it would seem to be that it is us – Israel – that is missing opportunities. Perhaps it would be more correct to say, we are deliberately shooting ourselves in the foot. Repeatedly.

The Likud-led coalition has been working diligently to align itself with so-called moderate Arab states. There has been some limited success in this area. Israeli businessmen and athletes are becoming regular visitors to countries like the United Arab Emirates, Bahrain, as well as Jordan and Egypt. Why then, was the decision made to assassinate a leader of Hamas in one of these countries, embarrassing both Israel and the UAE?

Yes, I know that Israel has not confirmed that it was behind the assassination. It never will; that is long-standing government policy. Some will say it is part and parcel of the war on terror and that in this particular case it was long overdue. No argument there, but the timing was certainly not coordinated well with other priorities. Some will claim that there is no solid proof that Israel was behind the assassination. However, what other government has the capacity to get a hold of the passports of Israeli citizens who immigrated from four separate countries?

Speaking of which, why would the government authorize an operation utilizing the passports of citizens holding dual nationalities? At the same time it has been assiduously lobbying some of those same governments to implement crippling sanctions against Iran and to shun Hamas. Certainly, this was a “high-value” target, but isn’t Iran’s nuclear weapons program also?

Another issue on which the Likud-led coalition has dropped the ball lately was the recent announcement to allocate funds to restore Jewish heritage sites in Israel – and also in the Occupied Territories. I’m all for this, having recently been to Harel and having found the observation tower closed because it was unsafe to climb. However, the inclusion of sites in the Occupied Territories wasn’t going to go unnoticed by the Palestinians, who have been waging a fierce (and largely successful) propaganda war.

I’m not one to be a Monday morning quarterback, so for what it is worth, here’s how I would have handled these two issues.

Regarding Hamas, in the past Israel has used targeted assassinations within Gaza with great effectiveness. This policy should be re-instated and the leaders of Hamas targeted, albeit, when they are in Gaza. Every assassination will assuredly bring a salvo of rockets into southern Israel, but every leader eliminated will have an impact on the organization’s structure, capabilities and morale. In addition, it would not overshadow foreign policy initiatives vis-à-vis moderate Arab states, Europe and Iran.

Regarding Jewish heritage sites, Israel should offer to pay for restoration and improvement of the sites in the Occupied Territories, stressing their importance to all three monotheistic faiths. Such an announcement should also point out the immediate economic benefit of such improvements, and the long-term economic benefits of religious tourism. It would also put the Palestinian Authority in the position of having to explain, if the refused the funds, why they were against economic development and equal access to religious sites.

Israel’s leaders, both current and future, need to have a more nuanced and thoughtful approach to interconnected issues. Some critics will say that the Occupied Territories, Iran, Jewish heritage sites and terrorism are not connected. And in truth, amny of these issues are not directly related to one another. However, I have to remind you: when you are asking someone else for help (be they moderate Arab states or Europeans) you have to take into consideration their policies and how they see the issues.

February 26, 2010 Posted by | Middle East | Leave a comment

Target the Oil

The sanctions against Iran being discussed by western leaders are expected to target the Islamic Revolutionary Guard Corps (IRGC), and the financial and industrial assets it controls.  This will be largely ineffective at slowing the pace of Iran’s march towards a nuclear weapon.  To be a member of the IRGC, let alone one of its top commanders, one has to be a true believer.  Economic sanctions are extremely unlikely to cause a change of heart.  Instead, the Iranians will do what they have already been doing successfully for years: building shell companies, false-invoicing, smuggling and bribing both government and corporate officials in the countries they do business.

Since the 1979 revolution in Iran, the country has been under constant US unilateral sanctions. The first U.S. sanctions against Iran were formalized in November 1979, and during the hostage crisis, many sanctions were leveled against the Iranian government.  By 1987 the import of Iranian goods into the United States had been banned.  In 1995, President of the United States Bill Clinton issued Executive Order 12957, banning U.S. investment in Iran’s energy sector, followed a few weeks later by Executive Order 12959 eliminating all trade and investment and virtually all interaction between the United States and Iran.  The impact of these largely unilateral sanctions by the US – the world’s largest economy – has been negligible.

Despite the sanctions, Iran continued to attract foreign investment and technical cooperation for its energy sector. France, Italy, Norway, UK, Spain, Holland (all members of NATO) have taken advantage of absence of the American competition and tried to fill the gap.  So have Japan, Brazil, Malaysia, China and Russia.   However, the threat of American retaliation against foreign firms has kept the investment way below the levels necessary to maintain the present energy infrastructure and develop additional capacity.  Current investment only allows Iran to continue to keep its oil export at its OPEC determined quota level.

Iran has the third largest proven oil reserves, roughly 10% of proven global reserves. It is the fourth largest oil producer in the world and OPEC’s second largest exporter.  There are, at present, nine refineries (in Tehran, Tabriz, Isfahan, Abadan, Kermanshah, Shiraz, Bandar Abbas, Arak and Lavan Island).  Refineries, tanker terminals and liquid natural gas (LNG) processing plants are limited and concentrated mostly in Iran’s southern and western provinces.

Iran’s petroleum industry is its Achilles Heel. For any sanctions to have a meaningful impact, they must include a total ban on importing Iranian oil & gas, as well as exporting technology, and financing exploration and development.  This will be a painful step for western economies still struggling with the global recession.  However, Israel must make clear to its would-be allies that mealy-mouthed protests are no longer enough.  It must also make clear that if Israel is compelled to act alone, it will.  It must be made clear that not only will Iran’s nuclear programs be targeted as part of a military campaign, but so will Iran’s petroleum industry!

February 15, 2010 Posted by | Middle East | 1 Comment