It happened eight years ago, before Yitzhak Rabin was murdered and only a few months before Israel signed the Oslo Accords with the Palestinians in 1993. In those days a meeting took place in the building of the newspaper Davar, a daily then owned by the Histadrut (Labor movement).(1)
In the editor's room, then-foreign minister Shimon Peres was talking off the record to top Israeli journalists. Peres had two important matters, neither of which was for publication, to tell the journalists. The first of these two tidings was that "the establishment of a Palestinian state is inevitable." The second was that the essence of the peace to be established with the Palestinians would be "a peace of markets" as against "a peace of flags." In Peres's words, "We are not seeking a peace of flags; we are interested in a peace of markets."

Capitalist Economic Models

Peres knew then, as many people know today, that two things are important in the new millennium: the first is that the era of direct colonial rule is over (see how colonies like East Timor have won their independence, and how Macao and Hong Kong have been restored to China). The second is that, in this new situation, one can make efficient use of several economic models that the central capitalistic powers devised as methods of control or rule, or as ways of competing with other great powers.
A practical expression of Peres's view is to be found in his book A New Middle East.(2) In this book, Peres stresses the central role of the economy in political processes - including the peace process with the Palestinians. He describes the global economic structure as two-tiered: in the top one are the free-trade areas and in the second are multinational companies that lead the global economy. Peres relays a simple and clear message: the capitalist Israeli economy, striving to find its place in the global capitalist economy, must achieve the longed-for peace with the neighboring countries (and above all with the Palestinians), must aspire to win a leading place in local trade areas, and must link its fate with the multinational companies that set the tone in world economy.
Peres is not alone in his opinion. As far back as the 1980s, the masters of the industrialists' associations - headed by Dov Lautman, owner of the biggest textile complex in Israel, Delta Textiles - started to express "heretical" opinions about the industrialists' readiness to consider supporting the idea of the establishment of a Palestinian state, as long as the colonial-economic ties between the parties would remain intact. Lautman, as head of the industrialists, has also since the early 1990s started supporting the signing of a NAFTA-type agreement between Israel and the Palestinians. The reference is to the agreement between Mexico and the USA - and it is clear who is who in the Middle East, i.e., who is to play the role of Mexico and who the role of the USA.(3)

Globalization for the Poor

The same development that characterized Mexican-American relations in the course of the 1980s and 1990s is now manifested in the trilateral Israeli-Palestinian-Jordanian relations. From the point of view of Israel itself, the state is in the midst of a rapid process of integrating manpower and means of production into the business environment of those multinational companies that are active in the most profitable branches in the world - the Internet, telephones and computer programs. Parallel to this, we are witnessing the transfer of labor-intensive industries to places outside the borders of Israel, including the Palestinian territories and Jordan.
The aim is to exploit Palestinian and Jordanian cheap labor. The transfer abroad of these plants leads to the closing down of factories in Israel and to unemployment, especially in development towns and the Arab sector. No wonder that the head of the industrialists, who as far back as the early 1990s preached the signing of Middle Eastern NAFTA agreement, is now among the owners of the leading complex in the whole textile industry, and that half of his production has now gone over to Jordan and Egypt, soon also to spread over into the areas of the Palestinian Authority.
The transfer of labor-intensive industries leaves behind tens of thousands of unemployed, but it is also a means of putting moral pressure on Israeli workers and squeezing them more effectively. The workers are stuck between the hammer of transferring factories and the anvil of bringing masses of foreign workers into the labor market, all part of deliberate government policy in support of capital. These foreign workers are ruthlessly exploited. The system works even in sectors where there is no direct threat of transferring the plant or of introducing foreign workers. We can take the ports as an example.

The Ports As an Example

The port workers in Israel have, in recent years, been engaged in a struggle against privatization and for the protection of those rights they had won, which were set down in collective agreements, and to which they and their employers are signatories. This struggle did not end with the establishment of the Barak government, which is trying to implement what the Netanyahu government attempted unsuccessfully to accomplish: the privatization of the ports.
A previous serious effort in this direction by the rightist Likud government ended in a ten-day strike by the port workers and a handwritten letter by the then-prime minister promising the leaders of the port works committees that "the workers won't be harmed and the ports won't be privatized." As we have noted, where its predecessors failed, the Barak government is trying to flex its muscles, resulting, meanwhile, in a large dose of sanctions by the workers, lasting for days on end. These were only discontinued with the intervention of the labor court. However, the struggle has not been resolved.

How to End a Strike

Mainly conservative governments all over the world, including the Middle East,(4) tried in recent years to privatize the ports. Sometimes they succeeded and sometimes they failed in the face of struggles by the port workers. There is nothing new in the Israeli experience: the government attempts to transform the assets of the state into the property of a small number of wealthy people, either local or foreign. However, this time there was an innovation - the employers' organizations, led by the strong bourgeois Industrialists' Association, tried to grapple with the question of how to put an end to the strike, even though they don't own a single private port capable of breaking the workers' strike in the three state-owned ports.
The leaders of the employers' organizations put their heads together and found a solution: to direct cargo ships to ports in neighboring countries like Egypt or Cyprus. However, another obstacle then arose. After unloading the cargo in, say, the Egyptian port of Ismailia, arrangements must be made to bring it to Israel, incurring high transportation costs.
The Israeli industrialists thought again and came up with a better solution. Gaza port is "nearer" and would be "cheaper." Accordingly, they approached the Palestinian Authority, whose minister of transport quickly replied in the affirmative. But now another serious problem arose: there is no port in Gaza! Many plans exist for establishing a port in Gaza, but, as of today, there is no port. Why? Because, for generations, the Israeli government had objected to the establishment of a Palestinian port. The reasons? "Security," of course.
From this short account of the port workers, one can draw at least three conclusions. First, those who are rich and powerful, including their respective organizations, are more creative than their governments. Second, if it is necessary to put pressure on the workers, here one can also rely upon the enemies of yesterday. Third, there are those who are trying to build on the enmity between the Israeli workers and their Palestinian counterparts - in this case, the port workers from Ashdod, Haifa and Eilat against the workers of the Gaza port (which has yet to become a reality).

Neo-Colonial Agreements?

We have noted that almost a decade has passed since the heads of the Industrialists' Association started to speak of the establishment of a Palestinian state as an option both realistic and desirable - along with the preservation, of course, of their economic and social interests. The guaranteeing of these interests was expressed in the Paris Accords, the economic agreements signed between the Israeli government and the PLO in 1994. (Incidentally, one of the signatories was Avraham Shohat, who was, and is, today Israel's minister of finance.)
A colleague of Shohat in the Barak government, Professor Shlomo Ben-Ami, wrote as follows: "The social-political elite in Israel lost faith in an approach founded on confrontation and force. It understood that the price of the occupation [of the West Bank and the Gaza Strip] was higher than the 'fruits' which it bestowed."(5) And Ben-Ami went on to write that:
"In practice, the Oslo agreements were founded on a neo-colonialist basis, on a life of dependence of one on the other for ever. The Paris agreement, the economic protocol written after Oslo, was one of the expressions of the above. Instead of directing the Palestinian economy to look eastward, to Jordan and to the Arab world, it imposed almost total dependence on Israel. The agreement created an extended colonial situation. It assumed on a permanent basis that, when there will finally be peace between us and the Palestinians, there will still be a situation of dependence, of a structured lack of equality between the two entities."(6)
These lines were published at the end of 1998. A few months later, as a result of the elections,7 Ben-Ami was appointed minister of internal security. Among other tasks, the minister is responsible for implementing these "neo-colonialist" agreements. For this there is a police force and a Border Police force under his authority. And where is Shimon Peres today? He is a possible candidate for the presidency. Meanwhile in the framework of his role as minister for regional cooperation, he is attempting - not always successfully - to implement what he preached years ago.

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(1) Nowadays, agile Palestinian building workers are pulling down this building in the center of Tel Aviv to make way for new high-rise luxury apartments.
(2) Peres wrote as follows in his book: "The whole world is organizing in a two-tiered structure: at the bottom regional communities and above them, groups of multinational companies. The political power of the groups of multinational companies and the development of the supra-national economy expedite this process, which sooner or later will lead to diplomatic and judicial recognition of the international political status of these giant companies. This recognition will express the change which has already occurred in the term 'sovereignty.'" From Shimon Peres, A New Middle East: Framework and Processes for the Era of Peace (Tel Aviv: Steimatzky, 1993), p. 91 of the Hebrew version.
(3) On the discussions that took place in the framework of capitalist organizations concerning the implications of peace with the Palestinians, see Efraim Davidi's article "Israel's Economic Strategy for Palestinian Independence," The Middle East Report, No. 184 (September-October 1993).
(4) On the processes of globalization, privatization and the workers in the Middle East, see Prof. Joel Beinin's excellent article which is about to appear in a book on the subject: "The Working Class and Peasantry in the Middle East: From Economic Nationalism to Neoliberalism," The Middle East Report, No. 210 (Spring 1999).
(5) Shlomo Ben-Ami, A Place for All (Tel Aviv: Hakibbutz Hameuchad, 1998), p. 106 of the Hebrew version.
(6) Ibid., p. 113.
(7) Before entering politics, as a lecturer in history at Tel Aviv University, Ben-Ami wrote an article called "Koor Ready to Cooperate," Palestine-Israel Journal, No. 1, Winter 1994.