Commentary

Who Should Pay for Peace?

this article was originally published in the Washington Times, February 2, 2000
One of the constants of U.S. foreign policy is that America is expected to pay for everything all of the time. For instance, as Israel and Syria slowly maneuver toward a peace treaty, the only question for Washington is the size of the bill.

U.S. estimates range between $10 billion and $18 billion. But Amos Yaron, director-general of Israel’s Defense Ministry, has reportedly proposed a security aid package AWACS and Hercules aircraft, Apache and Blackhawk helicopters, Nautilus anti-missile system, and more running $17 billion alone. Some Israeli officials are talking about needing as much as $30 billion to finance the Syrian deal.

But no surprise here. Observes presidential press secretary Joe Lockhart, ”There has never been an agreement in the Middle East which did not include some sort of American aid.”

For years, the United States has provided $3 billion annually to Israel, as well as regular arms transfers and occasional loan guarantees, making that nation Washington’s most expensive foreign dependent. All of this was supposed to help make Tel Aviv secure in a dangerous region.

In 1976, peace began to emerge. But instead of reducing the need for U.S. aid, the Carter Camp David accords increased it. Egypt was paid off, while assistance to Israel continued.

Jordan and the PLO also became American dependents when they reached agreements with Tel Aviv. Now, Israel and Syria have begun a peace dance, and the cash register is ringing.

If Israel returns the Golan Heights, it says it will need $10 billion to move the residents and another $8 billion to relocate its bases. Additional will be security enhancements like those proposed by Yaron. Along with Syria’s as yet unstated demands.

All told, some analysts expect the total cost of peace for all of Israel’s neighbors to run as much as $100 billion. That includes direct aid, debt write-offs, private investment guarantees, water projects and compensation/relocation aid for Palestinian refugees. The largest share of this tidy sum would, of course, come from America.

Why?

Israeli Prime Minister Ehud Barak recently explained to visiting U.S. senators that doing so would promote U.S. strategic interests. As he put it, ”A peace agreement, even if it costs money, pays more than any war.”

Well, yes, but Israel and Syria have not fought since 1973. The question is: who benefits how much from a formal peace treaty?

First, one should recognize that foreign aid does not promote economic development. The international record, especially in the Mideast, is awful.

Assistance to Egypt has been almost completely wasted; money for Israel has subsidized one of the most statist economies on Earth. Abuse and waste of aid to the PLO are pandemic: in 1997, $323 million, one-third of the Palestinian Authority’s budget, simply disappeared.

Thus, the only real case for assistance is to bribe the Arab and Israeli governments to make peace. But who has the greatest interest in signing a treaty? Israel and the Arab states or the United States?

The original Camp David accords were linked to the Cold War. It might have been worth the money to cement Egypt’s shift away from the Soviet Union.

Although the Clinton administration doesn’t seem to notice, the Cold War is over. Thus, the benefit of Mideast peace is simply Mideast peace. It no longer relates to a larger geopolitical struggle involving the United States.

In such a world, let the countries benefiting most from peace pay for it. Most obviously, Syria doesn’t deserve a dime.

President Hafez al-Assad has immiserated his country.

Sufficient reward for making peace would be the opportunity to lower military spending and encourage foreign investment and trade.

Israel, too, deserves nothing. After all, it allowed the 17,000 settlers into occupied territory over U.S. objections.

So, too, should Israel bear the cost of shifting military facilities. Although Tel Aviv cannot take its security for granted, it has overwhelming military superiority against all of its neighbors.

Peace with Damascus should allow it to make selective reductions in its defense budget, money that could be used to acquire new weapons and adjust its military posture along the Syrian border. If it couldn’t, if Israel would require tens of billions of dollars in aid and military equipment from the United States to remain secure, the proposed deal doesn’t sound very much like peace.

In any case, American taxpayers shouldn’t be on the hook. Indeed, the United States should use this opportunity to reconsider its entire Mideast aid program. When the world changes, so should U.S. policies.

Peace in the Mideast is a good thing. But the real beneficiaries of peace are those nations making peace. They should pay the resulting price.

Doug Bandow is a senior fellow at the Cato Institute.