Ya'alon: Positive relations with Egypt via economic ties

"A change in the [economic] situation can manufacture such opportunities that will influence our security situation in the future,” says Ya'alon.

yaalon office 311 (photo credit: Ariel Jerozolimski)
yaalon office 311
(photo credit: Ariel Jerozolimski)
Economic motives could provide Israel with its best chance for establishing positive relations with Egypt once the latter elects its new government, Deputy Prime Minister Moshe Ya’alon said Tuesday.
“Egypt is struggling to feed 87 million people, and the economic challenge stands before whichever leader is elected there,” he said. “Will this create an opportunity for the development of economic relations with Israel? We need to find opportunities, because a change in the situation can manufacture such opportunities that will influence our security situation in the future.”
Ya’alon made his remarks during the opening speech at a conference entitled “The Israeli economy in the shadow of security threats,” which was hosted by Tel Aviv University’s Yuval Ne’eman workshop for science, technology and security, headed by Prof. Yitzhak Ben-Israel.
Ya’alon also referred to the growing boycott, divestment and sanctions efforts by Israel’s opponents, saying it was imperative that Israel use all the tools at its disposal to fight the delegitimization campaign being waged against it in international forums.
“I won’t delude myself that the retraction [of claims that Israel targeted civilians during Operation Cast Lead in 2009] by Judge [Richard] Goldstone will prevent those trying to harm us from continuing to attack us through blood libels.” he said. “[Delegitimization] is a sophisticated campaign based on lies, but to our misfortune it has been accepted in the West.”
Kadima leader Tzipi Livni touched on the delegitimization campaign when she made the closing speech at the conference, saying Israelis could not afford to make themselves feel better by looking only at recent positive data on economic growth and unemployment.
“We have to understand the warning signs that are hanging on the wall, which tell us that the same process of delegitimization, the same process of isolation, can turn very quickly from economic isolation into security isolation,” she said.
Bank of Israel Deputy Governor Zvi Eckstein, also speaking at the conference, said economics textbooks show that a lack of certainty and the risk derived from public feelings of personal insecurity can affect investment and therefore damage long-term production.
The state has always faced a dilemma over finding the right balance between the necessary defense expenditure and maintaining economic growth, while simultaneously having to pay heed to public sentiment about short- and long-term security, he said.
Eckstein presented figures that indicated defense expenditure was relatively low in the first two decades after Israel’s establishment, but it rose significantly after the Six Day War in 1967, before peaking at about 35 percent of gross domestic product just after the Yom Kippur War in 1973.
According to the data he displayed, even after a gradual decrease in defense expenditure to its current level of just under 7% of GDP, that expenditure still had a significant impact on the level of public debt.
The conclusion to be drawn is that Israel’s debt-insurance costs are very sensitive to changes in the geopolitical security situation, Eckstein said.