By Franz Schurmann

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Prediction for Tuesday, March 23rd,1999

Arafat will not proclaim Palestinian statehood and the peace process will resume

• Introduction:
  While tensions have been rapidly growing in and about East Asia --- including the China storms raging in Washington --- the Middle East has been uncharacteristically quiet (except for the ritualistic bombing of Iraq). Not only that, a number of events boding well for peace and prosperity have occurred. And there is talk about even more positive events to come.

  Here are some of the events and trends:

  1. Oil prices have risen dramatically saving a lot of Middle Eastern countries from economic and political destabilization. The key cause of the change is the formation of a para-OPEC made up of Saudi Arabia, Iran, Venezuela and Mexico.
  2. On April 6 Libya will turn over the two suspects in the Lockerbie plane crash legal process for trial in the Netherlands.
  3. Just about all political factions in Israel are now agreed that Israel must withdraw from southern Lebanon. Assistant US secretary of state for Middle Eastern affairs Martin Indyk's trip to Damascus suggests the possibility that both the narrower Oslo Israeli-Palestinian and the broader Madrid Israeli-Arab peace processes can be resumed.
  4. The formation of a coalition government in Afghanistan including both the Taliban and the northern opposition. The fact that the agreement was concluded in the Turkmenistan capital Ashgabad indicates broad international support. Also Iranian President's highly successful trip to the Vatican signifies Iran's acceptance into the full international community.
  5. The dramatic economic growth in Turkey evidenced in the 50 percent rise in Istanbul stock market prices since the beginning of 1999 and an equally dramatic decline in unemployment.

• Prediction:
  On or after May 4, when the five year implementation period stipulated by the Oslo accords will have expired Yasir Arafat will not proclaim Palestinian statehood. And whoever forms the Israeli government after the May 17 elections will agree to an extension of both the Oslo and Madrid peace processes.

• Outcome:
  This prediction is pretty much --- if not entirely --- on the mark. Yasir Arafat did not proclaim a Palestinian state and the new government of Ehud Barak has stated it will resume the peace process. It's choice to link up with the pro-peace Shas Party rather than form a coalition government with Likud which is hostile to the peace process makes resumption of the process virtually certain.

  There also are many signs that the broader Israeli-Arab peace process ("Madrid accords") will also resume:

  (a) A large Israeli consensus for returning to Lebanon the Israeli "security belt" in southern Lebanon.
  (b) The ever firmer Irani-Saudi alliance --- reminiscent of the Nixon era "twin pillar" Gulf policy --- which has stabilized the global oil scene and allowed oil prices to rise to the point where the new earnings can help finance a Middle Eastern "Marshall Plan."
  (c) Rapidly improving Israeli-Syrian relations which will lead to a return of the Golan Heights to Syria.
  (d) Strong backing for Arafat and the Palestinian Authority by the White House.
  (e) The oft repeated refrain in the Arabic media that "never has the time for Middle Eastern peace been better than now."

The necessary assumption for the prediction is my judgment that President Clinton, far from being presidentially incapacitated because of scandal and impeachment, retains the power --- and is willing and able to exercise it --- to make and implement American foreign policy.

The basis for the prediction is the well-known fact that American vital interests in the Middle East are oil and Israel. The fact that the Clinton administration was able to mastermind the recent oil agreement which saw an immediate $3 jump in prices was a show of strength convincing to all in the Middle East.

The prediction is also based on the severe political disunity in Israel which makes it impossible for any government to agree on a unified policy towards the Palestinians and the Arabs in general. This disunity has given the Clinton administration new power to push its own solution to Israel's dilemma.

What that solution could be was suggested in an Arabic-language magazine, Al-Majalla (February 14-20, 1999), in a report datelined Washington. The reporter quoted an unnamed source who flew with the President to attend the late King Hussein's funeral. Clinton reportedly told the source that he was carrying a plan for a "confederation" between Israel, Palestine and Jordan.

The confederation will start as an economic union modeled on the Benelux (Belgium-Netherlands-Luxembourg) common market of the 1950's. The rationale for the new triple confederation is that it will bring together Israeli technology, Jordanian natural resources and a Palestinian work force.

Over time it will become a political confederation as well.

If, later in the year, this option is placed onto the public arena, I shall make a new prediction about this.