Khaled Abu-Aker: Where do we stand today as Palestinians on the issue of regional cooperation? There has been a lot of talk about it, but so far nothing has happened on the ground. Is this due to the political situation?
Nabil Sha'ath: The Israelis talk about regional trade, but actually they want to impose heavy restrictions on us to prevent us from doing any regional trade, while using the slogan of regionalism in order to use us as a bridge for Israeli products to gain access to the Arab world. The Arab countries are not accepting this and, therefore, there is no progress in any of the regional projects relating to trade.
The border between Egypt and us is a very good example. The Israelis will not allow more than 10-15 trucks a day to pass from Egypt. They encourage the Egyptians to go to the Israeli rather than to the Palestinian border to collect custom duties. Armed by the Paris Protocol, they can permit what they want and stop what they want. They have really been blocking any attempt to implement the Paris Accords, misusing them by imposing arrangements under the pretext of security, thus, in effect, barring trade between Egypt and us.
The situation is not very much better with Jordan. Because the trucks are strip-searched on the Jordanian-Israeli border, about 25 trucks a day pass from Jordan. They want now to allow Jordan to trade with the Palestinians via an agreement with Israel, without reciprocity for the Palestinian side. We want reciprocal trade and reciprocal truck movement between the Jordanian side and us. So you see, the Israelis are doing everything possible to prevent us from having regional trade.
Tunisia has relations with Israel on a very small scale, but has normalized its economic relations with Israel. Israeli tourists go to Tunisia and vice versa. There is a Tunisian office in Tel Aviv and an Israeli office in Tunis, but, to this day, Israel will not allow the Palestinians to import Tunisian products because, they claim, Tunisia is an enemy country. It is ridiculous!

We can say that without political progress we cannot witness any regional cooperation.
It is not related, but I am coming to the political side later. The problems could be solved without using politics. Were Israel to decide today that it would allow the Palestinians to trade with Egypt and Jordan and cast off this charade of security as a pretext to prevent trade, were it to allow us to go forward and establish regional trade links even without serious political change - then they could create much better conditions for overall regional trade. Israel is not interested in regional trade. The Israelis don't want us to be participants in regional trade, using the misapplication of the Paris Protocol and their attempts to close our borders under the pretext of security. This is not political. This is sheer greed. The Israelis talk about regional trade, but they practice regional isolation. You have to add to that the political situation, which I think is a different matter.

So what the Israelis are looking for actually is cooperation with the countries in the region but without the Palestinians.
Absolutely. They want to use us as an excuse, as a bridge to reach some regional cooperation with our neighbors, without our involvement. This is not a political issue. This is sheer economic selfishness. They think they can keep our market under their hegemony, under their monopoly. They sell us rubbish products that they cannot sell anywhere else in the world, or products that cost 3-4 times as much as they cost in the international market, such as dairy products. At the same time, they want to use the pretext of regional trade to by-pass us so as to forge new markets for themselves in the Arab world.
And here comes the political factor. The Arab world is not ready to see Israel violate all conditions of regionalism with the Palestinians, and violate all political commitments to link a political solution to regionalism, in order to achieve regional cooperation with the Arab world. The Arab world is not ready to do that, and for good reason. Because of Israel's economic and political behavior, the Arab world has gradually boycotted all fora in which there could have been a discussion of regionalism, such as the multilateral negotiations on economic and other issues. The same applied to other attempts made in particular during the Peres days, with his "New Middle East" vision - all of these have died politically. This was due to the insistence of the Arab world that they were not going to go into full normalization with Israel, including economic normalization and regionalism, until Israel implements its commitments to the peace process, liberating Palestinian, Lebanese and Syrian land. Therefore, the political factor explains why the Arab world is not forthcoming. But it is the Israeli behavior that explains why they are not succeeding in persuading us that they are really interested in regionalism and free trade.
This is also true of what they are doing vis-à-vis our trade with Europe. We have a full interim association agreement with Europe and the Israelis say they do not recognize it and, as a result, they are blocking our trade with Europe, impeding any progress in our economic relations with them. Add to that the difficulties Israel places on imports from donor countries and from other channels, all the difficulties they place in our way of implementing projects that require land in the areas they still occupy, and you can understand why when people now talk to us about regionalism we are cynical.

So all conferences related to regional cooperation attempts to create an atmosphere conducive to such cooperation are useless?
Yes, until two things happen: Israel completes the peace process and Israel willingly treats the Palestinians as equals and ends the blockages that it has imposed on free trade between us and our neighbors. Israel must show that it is interested in free trade and regionalism for all the parties in the area. It must allow Tunisians and Moroccans to sell us products, free the entries and exits to Jordan and Egypt, allow us freedom of action on the level of the whole region, start seriously to look at regional projects as something that benefits all the parties, not only Israel. Israel must not only complete the peace process; it has to change its attitude to the region dramatically.

Will the atmosphere then be conducive to regional cooperation? What of fears among many thinkers, even politicians in the Arab world, that regional cooperation means the domination of the economy by Israel?
To have or not to have regional projects should be the independent decision of every Arab country, based on a calculation of its own interests and the Arab interests. I do not think that any Arab country can be pushed into regional cooperation with Israel unless it is really in its own interest, politically and economically. If the Israelis think they are going to have a free ride - do something that benefits them only - it won't work.
I do not really think there is a reason for excessive fear of Israeli domination for several reasons: The Israeli economy after a long period of boycott by the Arab countries is not geared to trade with those countries, but with those that allowed Israel to trade with a preferential system, like Europe, the USA, Japan and Hong Kong. Israel's trade avenues have basically to do with polished diamonds, still the highest item of export and now, of course, hi-tech. Hi-tech is related to the Europeans and its markets and very little to the Arab markets. Israel does not produce desktop computers; it produces sophisticated software in the military and other highly technical fields in which the Arab countries have not really developed. So, the Israeli trade was directed basically by history, and is now directed by design and by the development of the Israeli productive system, to the European and American markets. I see very little reason for changing that and orienting toward the Arab countries. Neither is Israel capable of competing with the East Asian products in consumer durables, or with Europe and the USA in automobiles and consumer goods of a higher quality.
The Arab world is definitely not going to give preference to Israel over its usual trade partners. Israel's ability to compete in the Arab world is very limited and it will require a major change in the direction of its economy and trade and I do not think the Israelis are interested in that. They are interested in the global market in Europe, the USA and Japan. If Israel is really going to have any influence in the Arab markets, it will be as an agent of American and European companies in mega-projects like major water projects, and that was the dream of Shimon Peres. The Arab countries should be wise enough, sophisticated enough not to be interested. They do not need it. They are not infant economies that need the guidance of the Israeli entrepreneur in carrying out projects with the Americans. They can implement the projects directly.
Why then is Israel interested in regional projects with the Arab markets? For totally different reasons: a. water, b. energy and gas, and c. major infrastructural projects, such as roads that open the arteries of tourism and human interaction between Israel and the area around it.
Water: Water can only come if the Israelis improve their relations significantly with Egypt and Syria - Syria to allow Turkish water to come through, and Israel still dreams of getting water from the Nile.
Energy: Most of the Israeli power stations are now fuelled by coal from Australia and South Africa and they have become very old. The Israelis have to shift their power stations to natural gas. They have discovered some natural gas (by the way, most of it is ours on the border with Gaza). This is not enough. They are thinking of the Egyptian natural gas carrier and, in the future, the Qatari contract that never worked out (the $7-billion contract that Shimon Peres signed with the Qatari foreign minister in Amman just before the assassination of Yizhak Rabin). So thinking more of water and energy, the Israelis want to join the electricity grid that will start from Egypt. They want to buy electricity and gas - gas to fuel their own stations, and electricity as a stand-by they can utilize, especially when they are not able to cope with all the requirements of energy. They also want to become partners in the big refinery in Alexandria. So they also hope to get more crude oil directly for their economy as they grow faster, and become more energy thirsty.
Therefore, refined gas, natural gas, electricity, water, these are the major requirements of Israel from the Arab world and not the consumer markets or even the producer markets the Arab economists or political writers are afraid of. The Arab world's fear of Israeli domination is totally imaginary. It is not based on any real study of the Israeli economy.
The future of regionalism should not be based on false fears, but on equality, mutuality and proper calculation of interest. If, in the future, once peace is fully achieved, the Arab countries find it in their interest to sell gas and electricity to Israel, they must do it in a way that is also in our interest. In that case, we would like to see natural gas and electricity come through the Palestinian territories and with our transportation system. Then we would not be dependent only on Israeli sources; we would become an important route on which Israel would depend for its gas and water. Such mutual and balanced relations will then be based on the interests of both parties. In that case, we will explore our needs from Israel.

Are we going to benefit from any regional projects as Palestinians?
We should and we have been studying this for a long time. Once Israel opens up and treats us as equals and as independent operators who have their own self-interest and their own choices of trade, Israel then might have wider trade relations with us (but not in the Tnuva milk and the rubbish orange drinks that flood our markets or the other products they impose on us because they cannot sell them anywhere). No, regional projects will deal with hi-tech, tourism, and environment protection. There will be many ways in which we and Israel, and possibly some of the Arab countries around us, will benefit from regionalism and interdependence rather than dependence and hegemony. In that case, the direction of trade will change so that Israel will gradually get out of those industries and products in which it is not competitive and gradually move into those products in which there is joint competitiveness. The Arab world and, particularly, the Palestinians have a lot of highly talented manpower in hi-tech and we might be equally interested in some joint projects.
But as equals. Take for example the present state of tourism in Jerusalem and Bethlehem. The Israelis take all the tourists to their airports and force upon them their tour buses; they put them in their own hotels, they feed them in their restaurants - the only thing we get are tourists coming in Israeli buses, with Israeli tour guides; they see the sights; go to our toilets and buy postcards. This is ridiculous. If Israel thinks this is regionalism, we don't want it.

Mr. Peres tried to show a bright future for the Middle East. He has his own vision for the Middle East. I noticed you were critical of his vision. Do you think he has overly high expectations?
I am not criticizing. He is in his own right to propose a vision of peace, which I appreciate. The man is creative, forward-looking, and he found in the Middle East a raison d'être for a new foreign policy for Israel, which he championed. He thought of mega-projects: the Red-Med and the Med-Dead and the Red-Dead canals. His dreams went very high. I don't blame him, but I think the Arabs have to read him with a lot of grains of salt.
Before you dream all these dreams, you have to carry out the simple task of withdrawing from our country. Take your security people from the borders. I went to the Egyptian and Jordanian borders and asked the hablan mishtara (the demolition experts they put on the borders), "Why are you taking two hours to check every truck?" He answered, "To save the lives of Israelis." I said, "Fine, this is a noble objective, but how many bombs have you found in the last week?" "Last week, none really." I said, "Last month, or last year, or even the last six years? How many bombs have you found on the trucks?" He said, "None." So it is a distortion. The whole security issue on the borders, particularly of Egypt and Jordan, countries with which Israel has peace, is really an excuse for which Mr. Peres was responsible. During his time in office things became worse, not better. One should say to Mr. Peres, "Fine, your dreams are legitimate, but don't let them become a substitute for reality." Mr. Peres should come down from his grand designs and let us work together on realistic plans - to get real economic cooperation and real economic freedom of trade, in the interest of all. Israeli occupation and economic cooperation can't live together.

Do you see the possibility of having real cooperation in spite of doubts on the part of Palestinians regarding the possibility of a solution to the complicated issues?
Why shouldn't this happen in the future if the necessary conditions are fulfilled: if there is a peace process after which Israel will behave differently; if the Palestinians have all their country freed like Lebanon was, and if the Syrian track is followed through; if we solve the refugee problem by implementing the right of return coupled with compensation; and if that leads to a comprehensive peace in the area? Economic regionalism has a very valuable potential to all the parties.

They are anxious for industrial parks.
These did not work. We established industrial parks and we thought the Israelis would come rushing, in order to put up factories. They didn't, because the Israelis are maintaining the same restrictions, refusing to recognize us as an independent entity in issuing certificates of origin. They do not want to recognize our association agreement with Europe.
Our dependence on Israeli imports is being reduced, and we are fleeing from the Israeli economic jail where they impose trade on us and restrict our movement. Whatever cooperation is going on today is based upon Israeli domination of the market and total closure of our borders with the rest of the world, upon Israeli occupation and control of our borders. When we become free, all of us will have to think totally differently - a totally different image, based on independence and interdependence in which we and the Israelis choose those areas of cooperation that are of mutual benefit.

But, today, there is no place for talking about issues related to the multilateral talks. Were the Syrians then right when they decided to boycott the multilateral talks? And Lebanon?
The question is not right or wrong. All of these factors can be elements of pressure on the Israelis, and it is legitimate to make use of every pressure in order to get the Israelis to give us back our rights. In a situation in which there is no major military confrontation, political propaganda and economic pressure are the tools of the game. Otherwise, the only fact controlling the game is Israeli military occupation and preponderance of power. As against that there are other pressures in the region and one of these is the ability to withhold from Israel economic benefits until it complies with its political obligations.

Can integration into the region be achieved, or will the economic and cultural gaps block it?
The word integration is a very big word and the Arabs have not been able to integrate among themselves. For Israel, Turkey, Iran, etc., to integrate into a broader Middle East is even more difficult. Let us talk about joint projects, regional cooperation and regional trade before we talk about full integration.

What are the main projects you believe we are really in need of in order to help us politically and economically as Palestinians on the regional level?
All the projects have failed on the rocks of Israeli impediments to our freedom of movement. We cannot talk about regionalism if our people cannot move freely. How can you have regional projects if a businessman from Cairo cannot drive his car and come to Gaza? I think we should totally forget the dreams of any regional improvement until the political process achieves its results. Five years ago, we thought it may be possible to do a little in the existing political environment, but it did not work, basically because of Israeli policies. The political environment was more flexible than Israeli security and economic measures. But that is finished now. We are close to the termination of our peace process. There is no sense today in moving on the economic front before concluding, in the next three to four months, the peace process between Israel and us and between Syria and Israel. When that is concluded, I think we will have a new territory for thinking, for working and for doing.

Finally, what is Dr. Nabil Sha'ath's vision regarding the whole issue?
The future vision I think includes three areas in which Palestine has a very specific advantage in working closely with Israel and the Arab countries around us, particularly Jordan, Egypt, Lebanon and maybe Syria:
1. Joint ventures in the area of high technology, with world exports being the objective. It suits both our high-level manpower structure and the needs of international markets;
2. Tourism;
3. Cooperation in issues of water and energy and in their environmental components, on a fair and equal basis for the benefit of all of us.
But all of this will have to await the conclusion of the peace process before having any chance of success.