The Middle East

ATLANTIC

May 1949

on the World today

RECOGNITION of the Israeli government by Great Britain, and of Transjordan by the United Stales, has been taken quite logically by the Arabs to mean that Washington and London are again more nearly in step on Middle East policy. The Arabs responded to renewed Anglo-American solidarity by acknowledging, however reluctantly, the existence of Israel, and by turning to the West for financial help in attacking their domestic problems.

The unofficial but practical recognition of the presence of Israel in their midst has not only shocked the Arabs out of their chronic state of apathy and fatalism: it has also engendered a healthy new mood of self-examination. This mood is clearly discernible in lhe highly art iculale press of Cairo and Beirut.

Kgypt wakes up

On February 24, Egypt and Israel signed an armistice ending nine months of alternating war and truce in southern Palestine. The same pressures which succeeded in persuading Egypt to sign the armistice are continuing to demand long-overdue internal reform and reconstruction measures. The Egyptian government was able to put through the Senate a progressive income-tax law in February. Since it was intended by this means to finance social improvements for the masses out of the surplus wealth of the tycoons and the pashas, the law was bitterly opposed. Its passage marks a radical departure from Middle East custom.

Among other signs that change is imminent is the apparent effort to satisfy some of the land hunger of Egypt’s peasants. A bill pending in the Senate provides for the distribution of state-owned lands in threeto five-acre plots to heads of peasant families; housing at government expense on the land; and thirty-year loans with which to work it. Should this bill pass, it would be the first gesture toward helping Egypt’s unhappy masses to feed themselves.

There are important political overtones in Egypt’s recent decision to participate with Uganda in thebuilding of a dam and hydroelectric power station at Owen Falls on Lake Victoria. Egypt’s renewed interest in this first of a projected series of watersaving schemes for the Nile is a sign that AngloEgyptian coöperation may continue.

Similarly the compromise reached in March with the Suez Canal Company, whereby Egypt gains a greater share in the management and profits of the company but agrees to a gradual rather than overnight replacement of European personnel byEgyptians, points to a more realistic attitude on the part of the government.

If Egypt, which occupies a strategic role in Middle East affairs, can be brought into a better working relationship with the Western countries, the rate of political and social evolution in the entire region can be greatly accelerated. Egypt has the resources to build a modern state. She needs machinery and technicians to implement her plans to process much of her own cotton, make her own steel, and refine her recently discovered oil.

The Egyptian Companies Law of 1947, designed to cure acute unemployment and satisfy nationalist aspirations, requires that at least 40 per cent of the directors of any joint-stock company shall be Egyptians; the number of Egyptian administrative, technical, and clerical employees shall be not less than 75 per cent; and the number of Egyptian laborers not less than 90 per cent. This law does little to attract foreign technicians and capital.

Financing Iran

Similar problems plague Iraq and Iran. Both countries have been attempting to improve the terms on which foreign concessionaires hold rights to the rich oil deposits. Iran, under constant political pressure from the V.S.S.R. next door, seems further along in her efforts to save herself and build a durable economy.

The Seven-Year Plan enacted by the Iranian parliament some weeks ago into the Economic Development Law calls for a series of specific agricultural and industrial projects which, if achieved, will represent a new chance for survival. The plan — the first in the Middle East to be based on the principle that the income from oil royalties should be used to finance long-term capital improvements — places heavy emphasis on agriculture, irrigation, and transportation expansion. Mines and industries come next; and there is high priority for sanitation and education.

The government’s mobilization behind the SevenYear Plan demonstrates a fresh mood of determination to lift the country out of its feudalism and weakness. A provision in the enabling law sets up an extragovernmental and independent authority to execute the Plan, free of entanglement with the notoriously corrupt bureaucracy. The Plan represents an effort, in a country temperamentally disorganized at best, to meet the Soviet challenge and to keep clear of political domination by either the Russian or the Anglo-American power system.

Trouble In Syria

This desire to maintain political neutrality and at the same time to strengthen weak internal economy is evident in the successive changes of government in Syria this spring. The short-lived Azem cabinet, made up of partyless technicians and businessmen, was a distinct innovation. Khaled Azem lost no time in dealing with Syria’s money difficulties by working out a new monetary agreement with France, similar to that between Lebanon and France, and by concluding negotiations for the building of pipelines across Syria.

Internal political stresses, however, compounded by intransigent opposition to Azem’s intention to join peace talks with Israel, and by Communistinspired pressures against his program, led to the coup which replaced him. Political and economic stability is still to be achieved in Syria.

In Lebanon, where Soviet influence is strongest in the Middle East, economic relief cannot come too soon. This educational center of the East is also a sore spot politically. Besides a growing class of educated youth who are unable to find useful employment in the country’s restricted economy, Lebanon possesses a large Christian population beset by twin fears of Moslem domination and Israeli aggression. The added burden of many thousands of Palestinian Arab refugees compounds the difficult existing problems of both Lebanon and Syria.

Can Israel carry the load?

On purely economic grounds none of the young and struggling states surrounding Israel can carry the entire refugee load, so far only slightly lightened by the Unted Nations relief organization. There is a popular theory in Israel to the effect that an exchange of populations is practical, with the Arab refugees remaining in large numbers in the neighboring Arab states and the Jewish citizens of these states moving to Israel. This scheme fails to take into account that the Jewish residents of Syria, Lebanon, and Iraq are mainly solvent members of long-established communities, whereas the mass of Arabs who fled from Palestine are indigent villagers unfit to make their way in the already overstrained economies of the Levant states.

Internal stresses press hard on the new Israeli government. It is confronted with the difficult choice between restricting immigration in some fashion or instituting the strictest austerity regime in order to share Israel’s limited resources with all comers. Recognition of this basic issue lay behind Foreign Minister Sharet’s desire for quick settlement of the border war with Egypt.

How the UN can help

While Israel proceeds with the task of building the new state, it remains for the United Nations to attempt once more to deal fairly with the problems created by the establishment of Israel: the Arab refugees and the status of Jerusalem. The ultimate prestige of the United Nations in the Middle East will rest on the success of the Conciliation Commission’s efforts.

The UN has twice decided that Jerusalem should be internationalized. Yet the Arab Legion of Transjordan has continued to hold the Old City: and the Israelis have confidently replaced military with civil government in the New City. At the same time, before the commencement of armistice talks with Transjordan, Israeli military reinforcements were observed moving into the Jerusalem area. Neither side will yield Jerusalem to international rule without pressure.

The most hopeful solution offered unofficially, before the report of the Conciliation Commission, followed in many respects the plan of the Fitzgerald Report made to the Palestine government in 1945. In substance that plan and its successor call for division of the city along the present lines; but a central enclave under UN authority would be set up to oversee the holy places and essential services such as post office, water, and power facilities.

The equally difficult issue of the refugees weighs heavily on the conscience of the world. Some recognition by Israel of responsibility for these erstwhile citizens of Palestine can be expected. This is particularly important in the ultimate settlement with Transjordan since it is the country in the Middle East which has always taken the most realistic view of Israel. Transjordan in turn has used the refugee responsibility to reinforce her demands for control over most of Arab Palestine.

However unwilling her neighbors, Syria and Egypt, may be to see Transjordan emerge strengthened from the peace with Israel, it seems unlikely that either is in a position to prevent this much of King Abdullah’s dream of expansion from being fulfilled.

AngloAmerican goals

From the Western point of view it is supremely important that all family fights and border disputes be neutralized. The stabilization of the Middle East and its immunization, as far as possible, against the Communist infection are two goals on which the United States and Britain are set in the Middle East.

It remains to be seen whether these tasks can be accomplished by applying the largesse hinted at by President Truman in the fourth point of his inaugural address, to speed up Middle East reconstruction; or by fostering the Bevin idea of a regional bloc under benign protection; or by international bank loans to industrial enterprises; or by more closely relating the Anglo-American oil investment to the general economic development of the area.