Wednesday, November 10, 1999

The Cards Are on the Table

Barak used the Oslo summit to lay his cards on table. They were fully consistent with a number of non-negotiable principles, or ‘red lines’ in the local term, which he had banded about since being elected. Barak’s red lines determine that 1) ‘Greater’ Jerusalem – will remain in its entirety under exclusive Israeli sovereignty; 2) Israel will establish three settlement blocs in the West Bank in wherein almost all the settlements will remain under Israeli sovereignty; 3) Israel will not only refuse to return to the June 1967 borders: it will demand some fifty per cent of the West bank territory for settlement blocks and security zones. 4) Israel will not discuss the repatriation of a single Palestinian refugee, though it is willing to participate, along with other countries in a possible international effort for the settlement of the refugees, including possible settlement in the area under Palestinian control. 5) Israel will express a willingness to recognize a Palestinian state conditional upon a number of essential restrictions. Among these: a) the Palestinians must sign on to a final and irrevocable agreement based on the above stipulations, 1-4; b) the state be limited in its arms level and it ability to sign accords with third parties.
He Means It
Barak tends to believe that the Palestinians will have to accept such a deal, since they do not have any alternative. The bitter pill of capitulation on the major Palestinian demands will be sugar coated by international recognition of a sovereign state. Since the international community has embraced Barak as a peacemaker, he believes that it will accept his interpretation of what it takes to end the conflict. Barak will move to convince the international community that Israeli public opinion and internal politics simply cannot countenance any concessions beyond his ‘red lines’ and that any attempt to go beyond them would be tantamount to political suicide for any Israeli leader. Barak sees the final status negotiations as the means to work out the details and the implementation of his policy along the above mentioned red lines.. The peace forces in the country have sensed for quite a while that Mr Barak is not actually a genuine alternative to his predecessor. However, Barak was shrewd enough to couple the introduction of his non-negotiable ‘red lines’ policy with some flexibility on slight incremental steps such as the re-negotiation of the Wye Accord, a very modest prisoner release and the partial opening of the safe passage route from Gaza to the West. Thus, people of good will can see some evidence of progress and still hope for the best. Moreover, many who know that, given Barak’s policies, peace is impossible, would like to convince themselves that Barak’s ‘red lines’ are just an opening position on the eve of some hard bargaining.
Theoretically, this is possible, but it is highly unlikely. Should Barak begin to seriously negotiate issues which he has declared non-negotiable, he will open himself to charges of deceit. This kind of deception would be grist for the mill of the right and its political vanguard among the settlers would have a field day denouncing Barak’s capitulation. They will be able to quote copious statements by him as to why it would be dangerous to do anything like making the concessions that are necessary for peace.. It is much more reasonable to assume that if he was serious about negotiating real solutions instead of imposing his policies, he would find a way to prepare the public, the overwhelming majority of which would support him. The evidence suggests that he believes that he can impose a settlement. And if not, there is an increasing amount of indicators that he is preparing for the possible collapse of the talks. Thus, if and when the talks fail, he wishes to hide behind the need to honor this so-called “national consensus” for which he bears major responsibility. Thus, with his famous, or should we say infamous red lines, Barak has converted an authentic consensus for peace and concessions which emerged after the May 1999 elections into what purports to a consensus for obstinate intransigence and the collapse of the peace process.

Wednesday, November 3, 1999

Passing Thoughts on Citigroup’s Coming to Town

Citigroup, the world’s biggest financial complex (3,400 branches in 100 countries and 165,000 employees) held a reception in Tel Aviv last week (Ha’aretz, November 1,1999) in order to announce their decision to open a branch in Tel Aviv. All the pillars of the local financial community, including Frenkel and the heads of the big local banks were out in full force to greet the newcomers.
Be Nice and Smile Even if it Hurts
Small fish do not usually welcome sharks into their small pond. However, there are many local financial wizards and business people who go by the theory that our local economy will somehow profit by the appearance of this giant Wall Street firm in the neighborhood. The hope is that if the big guys are interested in our turf, maybe there is more gold under it than we had assumed. Moreover, even if some of the local people were unhappy about the possibility that Citigroup will scoop up some of their clients, they were not going to show it or anger Citigroup by turning down the invitation to celebrate the occasion.
Citigroup’s New Boss
In an unrelated development, Citigroup made the international news last week announcing that it has a brand new boss, former U.S. Treasury Secretary, Robert Rubin, who was appointed on October 27, 1999 as a member of the firm’s three person directorate. The appointment followed Rubin’s decision a short while ago to leave Federal “service.” The U.S. economy did quite well under Rubin, so no one demanded a “cooling off” period. What could be more natural than the return of Rubin, former head of Goldman Sachs, to another central spot in the US financial oligarchy: From Wall Street to Washington D.C. and back to Wall Street. Our sense of logic and harmony are served by such smooth rotations.
Elegant Cattle Show
Just a small note on Rubin’s past activity will help to demonstrate how precisely the superb balance between money and politics is maintained. In February 1999, the International Herald Tribune ran a series analyzing the immediate background for the devastating crisis that ripped through Asia, Russia, Brazil and other countries from 1997 onwards. The crisis, which involved immense suffering for hundreds of millions of people, could not have happened were it not for ‘vulnerabilities’ fostered by Clinton-Rubin sponsored changes in the workings of international finance.
Our story returns to the beginning of the decade, when Bob and Bill first met.These were the circumstances.

“They were serious men, prosperous and pinstriped and they derided ‘he politics of class warfare’ as they conducted a job interview with a young governor from Arkansas. It was a steak dinner…in New York in June 1991 and the top Democratic executives on Wall Street were ….in one of a series of meetings with presidential aspirants in what an organizer called ‘an elegant cattle show.’”
“They were questioning a man with a meager salary but a silver tongue and this was another show in which Bill Clinton charmed his way forward to a blue ribbon……Aides describe that evening as an important step in the business education of Clinton, who came to repeat and amplify the themes, especially the need to move away from protectionism and push for more open markets in Asia and all over the world. It was the first time that Clinton met Rubin, from Goldman Sachs & Co. and the two men ..eventually forged a close partnership that has left an enormous imprint on the global economy. Clinton and Rubin took the American passion for free trade and carried it further to press for freer movement of capital…” (IHT, February 16, 1999)
Life has its ups and downs. Clinton will soon be out of a job. Bob Rubin is doing better. He has a new one. And his business will even have a branch in Tel Aviv.