To the Editor:
"In Israel, a Ho-Hum Response to Peace" (World Markets, Oct. 30) was salutary. In questioning a so-called peace dividend, Paul Lewis took a step to correct grave misunderstandings about the peace process, a step that may help temper expectations in other areas.
Mr. Lewis, however, did not get to the root of the matter: the peace process itself is unlikely to advance economic reform in Israel. The talks in Casablanca aren't likely to help, either.
Mr. Lewis reports that reform of Israel's socialized economy is a key step to taking "advantage of the new economic opportunities that peace is creating." But changing the "sclerotic socialized economy" represents something far more fundamental than a mere step in Israel's would-be reforms. The economy is socialized and sclerotic because Israel is a socialist regime -- period.
The privatization success that Mr. Lewis cites is inconsequential -- 8 nonbank companies of the 160 Israel owns. Israel has no private sector in the Western sense; socialism based on aid is the highest policy of the Israeli state, for the Likud as well as the Labor Party. This is the heart of the matter.
Looking for the peace dividend in economic reforms turns reality on its head. The purpose of the peace process, in fact, is to make reform unnecessary. The aid that will now flow will go to Jordan and the P.L.O. as well as Israel. This serves Israel's socialist purposes: aid to the Arabs will find its way to Israel via the monopolies and cartels that the peace process is saving from privatization. This is the peace dividend. Of course, Syria is on the agenda; it is the hinge.
Thus the Golan: if Israel can persuade the Americans to send troops to the Golan, (convincing the Israelis will be much easier), the aid spigot will be wide open.
The United States will have become the protector of the peace, while the aid will be necessary to protect the troops. What surer way to guarantee continued Congressional appropriations than to put United States troops at risk if the appropriations stop? What better way to insure the troops remain than to make them responsible for the peace?
The Middle East peace process has arisen because of two factors: the balance-of-power vacuum created by demise of the Soviet Union and the Israeli socialist system's rapacious need for American aid, which is threatened by Soviet breakup. The peace process is supposed to bring about a balance of power by way of the implanting of United States troops on the Golan. In other words, when this unconventional aid-based peace is in place, the assistance will sustain Israel's socialism, making reform unnecessary. ROBERT J. LOEWENBERG Jerusalem, Oct. 31 The writer is president of the Institute for Advanced Strategic and Political Studies, based in Jerusalem.
