7/29/80

The energy crisis touches the lives of Americans

in many direct ways: in the escalating price they

pay for fuel to heat their homes or drive their cars; or, as

has happened twice in the last seven years, when supply

cutbacks meant gasoline was sometimes not available at

all, at any price. But the energy crisis has also affected

us in an even more profound way, jeopardizing our national

security by triggering a crisis of global dimensions.

My topic is the international aspect of this crisis,

which illuminates:

--how we reached this state of affairs;

--the threat to our national security that it
entails; and

--the political dimension of any possible solution.

POLITICAL DIMENSIONS OF THE ENERGY CRISIS

Evolution of the Energy Crisis

The last three decades have been a history of our in-
creasing dependence on imported energy, until today our
economy and our well-being are hostage to decisions
taken by a group of nations thousands of miles away.

In 1950, the United States was virtually self-sufficient
in oil. In 1960, our reliance on foreign oil was still
only 16 percent of our requirements. During this period,
our domestic oil industry was producing far short of capacity;
our imports represented a strategic decision to leave our
oil in the ground undepleted while buying foreign production.
In an emergency we could have done without oil imports.
Our surplus capacity helped stabilize the price of oil; we
were in a position to resist exorbitant pricing or the
political use of oil by increasing our own production.

So long as these conditions existed, we were essentially
invulnerable to embargoes. These conditions have now changed

irretrievably. In April 1973, six months before the embargo,
I cited energy as a field in which cooperation among the in-
dustrial democracies has become imperative. By 1973, America's
dependence had doubled to 35 percent of our requirements and,
what was more important, we were producing at the limits of our
capacity. Henceforth, increases in our consumption were bound
to strengthen the bargaining power of the foreign oil producers.

The world's rapid economic growth was spurring demand; the
cartel found it had the power to restrict world supply -- and
thereby drive up prices. The theoretical possibility of using
oil also as a political weapon became starkly real in 1973,
when in response to the Middle East war the Arab oil producers
embargoed the United States and certain West European countries
and simultaneously restricted supply. Panic buying combined
with a real shortage led to the first price explosion. The
perverse twin effects of simultaneous inflation and recession
which have buffeted our economy since 1973 are in large part
the result of the fact

that the supply and price of this vital strategic commodity
are out of our control.

Since 1973, America's dependence on imports has grown,
not diminished. In the winter months of 1977, oil imports for
the first time reached a rate of 50 percent of our oil consumption.

## International Consequences of the Energy Crisis

It is questionable whether even OPEC realized in 1973
the full extent of its bargaining capacity. Still, in less
than a decade the total annual oil bill paid to OPEC by
all other countries has risen to $270 billion, or one quarter
of a trillion dollars. These enormous surplus earnings of the
oil producers now overhang the world economy and threaten
financial catastrophe. They are a factor of instability even
when not manipulated for political motives. They represent
a systematic impoverishment of the industrial democracies and

they threaten existing financial institutions which simply
cannot handle surpluses of this magnitude indefinitely.

With every passing year the vast accumulated petrodollars
become an ever more powerful threat to the world economic
and financial system. In unfriendly hands the combination
of the capacity to restrict production and manipulate vast
financial resources becomes an ever more dangerous weapon.

Our ability to conduct a responsible foreign policy according
to *our* values and *our* choices is circumscribed. Our freedom
of action in foreign policy--our own national sovereignty--
is compromised.

If the economic and political consequences of the energy
crisis are serious for the United States, the impact on
other countries more dependent on imported oil has been
correspondingly greater. Economic crisis has been a rude
shock to large numbers of people in the industrial democracies
whose aspirations had been raised dramatically by the prosperity
since the Second World War. For most of the industrial

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democracies the political problem of the postwar period
has been the fair allocation of an ever-increasing social
product. The energy crisis has transformed this into an
allocation of shortages, the management of a declining
standard of living. In some countries, political and social
tensions that were already at the margin of governments'
ability to manage, gave impetus to nondemocratic forces
and subjected democratic institutions to severe strain.

The consequences for the cohesion of the democratic
world have been grave. European unity and Atlantic solidarity
have been severely tested by economic disputes. Nations
in economic travail are inevitably tempted to resort to
protectionism in a desperate effort to preserve jobs and
markets. The open economic system that ensured prosperity
in the postwar period has been threatened by a vicious spiral
of shrinking trade and economic deterioration for all nations.
Likewise in the diplomatic sphere, the energy crisis has
undermined the political unity of the democracies as some

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allies, pursuing preferential arrangements in energy, have
been tempted to pay in the coin of allied cohesion. Separate
approaches on such vital issues as the Arab-Israeli dispute
demonstrate disarray and complicate the pursuit of peace.
Undertaken with the claimed purpose of helping the moderates
in the Middle East, such approaches, in fact, do the opposite.
For if once the democracies accept political dictates of
oil producers, radical forces will see to it that the
political price will escalate with the price of oil.

The oil crisis has its most devastating impact on the
nations of the developing world. They have suffered most
from the massive balance of payments drain caused by the
tenfold oil price rise since 1973. The most severe blow in
history to the economic development of new nations has
come not from the "imperialist exploitation" so loudly
assailed in international forums but from an arbitrary
price gouge by their Third World brethen. The developing
countries do not have the means, as the industrial nations

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have to some extent, to pass on the price rises to other nations in exports of manufactures. Their hopes of feeding their burgeoning populations depend on agricultural modernization, which require chemical, petroleum-based, fertilizers. To the developing nations, the constantly rising energy costs represent a permanent, massive, and devastating threat to all aspirations for progress. The increase in their energy costs in fact far exceeds the total flow of external economic aid they receive. The entire world's assistance thus barely enables them to stand still.

In short, the energy crisis has placed at risk the entire range of this nation's objectives in the world. It has mortgaged our own economy and left our foreign policy subject to pressures; it has weakened the industrial democracies economically, politically and potentially militarily. It has undermined the world economy and frustrated the hopes for progress of most of the new nations.

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The passage of time has made the crisis worse and the dangers greater. We are entering a period of pervasive instability, and we face potential catastrophe.

In the absence of effective countermeasures, the oil producers can sustain almost any high price simply by reducing their production. Ironically, even the moderate producers are now caught up in an ominous vicious circle. Their power over price and production is undermining the structure of the Western societies on which they ultimately depend for their security and progress.

They have a stake in our strength and stability, yet they are dragged along by radicals eager to destroy the current international order. Successive OPEC meetings turn into a stylized play which opens with the moderates opposing a price increase; the radicals then insist; a two-tiered system is created as a compromise; over the succeeding months the lower tier gradually slides toward the radicals' higher price. At the next OPEC meeting they go through the same process again--demonstrating that the pressures on the

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moderate producers are now uncontrollable, that objective
conditions enabling them to pursue what is in their own long-
term interest simply do not exist.

In 1973 and 1974, after the first price explosion, it
was considered axiomatic that the total oil bill--it was
then $30-$40 billion for the industrialized countries,
at about $12 a barrel--was excessive and could not be
sustained for an indefinite period of time. The financial
problem seemed to be solved, however, largely through
recycling by commercial banks. But the second crisis,
in 1979, has caused the oil bill to more than double again.
As Walter Levy has pointed out in an illuminating article
in the spring issue of *Foreign Affairs*, the financial crisis
may not be soluble this time--and our future is now at the
mercy of a precarious political status quo in what is
probably the most volatile, unstable and crisis-prone region
of the world.

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This brings me to my next theme, the political future
of the Middle East and the Persian Gulf, which are today
the focus of the world's concern not only for energy, but
for the precarious conditions of international security
and peace.

## The Middle East and the Persian Gulf

Throughout history, the Middle East and the Gulf have
been considered strategically crucial. It is a region of
profound passions, remarkable personalities, and almost
perpetual ferment. Its stark landscape and vast skies draw
man to infinity; it is no accident that three of the
world's great monotheistic religions had their origins
there--as well as several of the world's recent wars.
Even beyond the crucial concern for oil, it is a cauldron
of political and strategic conflict.

There are three aspects to the region's political
turmoil: the area's relationship to the global balance
of power; the interaction between the moderate and the

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radical forces in the area; and the Arab-Israeli conflict.

It is not possible to deal with the region's problems by
addressing one of these aspects in isolation; they must be
dealt with concurrently or the chaos will multiply.

First, the global balance of power. History and personal
experience combine to endow Middle East leaders with a highly-
developed instinct for the nuances of the global balance of
power. They may proclaim the conventional litany of non-
alignment, but they understand perfectly well that their
security depends on an overall equilibrium. A global
imbalance of power enables expansionist countries to black-
mail them, to interfere with diplomatic efforts for peace,
to subvert domestic structures, or in the final analysis
to repeat the pattern of Afghanistan: military intervention.
They know that the only counterweight to these pressures
is American power. Understandably, some leaders who
cannot themselves contribute a great deal to a global balance

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might wish to keep aloof from the day-to-day diplomacy by
which the East-West contest is played out. They would be
horrified, however, if the West took their statements at
face value.

Proclamations of non-alignment by Middle East leaders
have their counterpart in assertions of renunciation in
this country. We have been told for too long that the
problems in the so-called "arc of crisis" have complex
socio-economic causes, that they are not essentially
military problems, that not every upheaval is of direct
concern to us, and that we do not really have that much
influence over events anyway. Much of this is true but
irrelevant; a posture of abdication makes such prophecies
self-fulfilling. The Administration has already had to
reverse its position in the Persian Gulf from announcing
that we did not need a policeman in the area to proclaiming
ourselves as the policeman. The crises in Iran and Afghanistan
have illuminated the West's military vulnerability to the

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surviving moderate regimes in the area. This has generated
a pervasive sense of insecurity, threatening to alter
political alignments and foreshadowing dangerous tendencies
even in the economic sphere. The crisis in the Middle East
has many causes; but central to it is the growing doubt that we
possess either the military capability or the strategic
doctrine to defend friendly governments in the area. Strategic
parity inevitably means increased vulnerability of the Middle
East to growing Soviet capacity for regional intervention.

Our military build-up has been slow, hesitant and ambivalent--
much of it a redesignation of existing forces rather than a
creation of additional ones. And the pace of it is too slow
in the face of a Soviet build-up occurring at the rate of five
percent a year over the past 18 years.

These fears are reinforced by the Communist assault on
the geopolitical balance. In the last five years, beginning
with the collapse of Indochina and the fiasco of Angola,
almost every significant change in the world has been produced

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by Soviet weapons, Soviet friendship treaties, Soviet proxy troops, or outright Soviet invasion. The Cuban army has imposed solutions in at least two African conflicts, and from the Horn of Africa threatens the security of moderate governments in the Arabian peninsula. There have been two invasions of Zaire from Communist-held territory.

MORocco is under pressure from Communist-armed guerrillas; Tunisia has been threatened by Libya. A strong pro-Western government collapsed in Iran, not as the direct result of Soviet pressures but with consequences nevertheless devastating to the regional balance of power. In Southeast

Asia the army of Communist Vietnam, stocked with Soviet weapons and backed by a Soviet friendship treaty, occupies Cambodia and threatens Thailand. The resulting sense of insecurity has affected the perceptions of many key countries--slowing down the Mideast peace process, removing Soviet inhibitions to the point that it felt safe to invade Afghanistan, driving traditional friends like Pakistan to

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reject our assistance and to embrace neutralism.

This is the context which explains the lack of enthusiasm for the so-called Carter Doctrine among its supposed beneficiaries. The principal obstacle is the pervasive conviction that we lack the means or maybe the will to implement it. Leaders in the area understand from Centuries of national experience the importance of an unsentimental appreciation of the balance of power; they do not believe that their countries' security can be maintained by declarations of nonalignement or of solidarity with other (Islamic) countries equally unable to protect themselves. Their dissociation from us reflects, rather, a dismal assessment of the trend in the global balance.

The impact of these shifting strategic realities is not confined to political relationships; it extends as well to the price of oil. Even at the reduced levels dictated by OPEC, several moderate oil producers in the Middle East are still producing more oil than their own economic necessities warrant.

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and absorbing more revenues than their development programs require. The present exorbitant oil price would be even higher were not some OPEC countries willing to produce beyond their purely economic needs, as the price for Western and particularly American political and military protection However, to the extent that the global balance of power is perceived to shift--or, to put it another way, to the extent that America's capacity to deter foreign aggression or domestic upheaval is perceived to decline--our persuasive-ness on even seemingly purely economic decisions such as the price of oil is also profoundly eroded.

For all these reasons it is imperative for the United States to restore its overall military strength. The President was correct to declare our strategic stake in the security of the Persian Gulf. Now that he has done so, we have an obligation to create rapidly the forces to implement our policy.

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The military posture of the industrial democracies
is still too much influenced by the strategic doctrine
of the 1950's when strategic nuclear weapons were
considered capable of preventing every foreseeable
challenge including attacks on such regions as the
Middle East. Obviously, strategic equivalence is
the precondition of all security and it will require
major efforts. But it must not blind us to the fact
that we can never return to the conditions of the
Fifties. Precisely because the tendency of strategic
weapons is towards parity, the overwhelming
military problem of the next decade will be the

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crucial vulnerability of vital regions such as the Middle East. Unless determined efforts are made to restore regional military balances, by American power or aid to allies, the pressure on countries close to the Soviet periphery is bound to increase. The already pervasive insecurity will grow. Radicals allied with the Soviet Union or backed by it will grow bolder and we will face new challenges. States known for their traditional friendship with the West will grow demoralized and frightened.

And in those circumstances it will be almost impossible to conduct a responsible dialogue with even the moderate oil producers. Restoring the military balance is not the sole road towards a constructive policy; but no constructive policy is possible without it.

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The second dimension of the geopolitics of energy is the *balance betweenthe moderates and the radicals* in the Middle East. The area stretching from Morocco to Pakistan has seen a decade of great turmoil and upheaval.

The process of domestic change is inevitable and irrepressible, we are often told; we have to get on the side of the forces of change. There is merit in these propositions. But we must never lose sight of a crucial distinction: We have a vital stake in the *nature* of that change. The success of those who support peaceful change and ties with the West is of crucial importance; anti-Western radicals driven by ideology will not be charmed out of their hostility to us by professions of our goodwill. At stake in the contest between these two groups is, among other things, the world's energy future.

The disintegration of the pro-Western government in Iran was the principal cause of the oil crisis of 1979: the long

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gas lines and the redoubling of oil prices that is still
wreaking havoc with the world economy. Iran has sharply
reduced its oil production, for many reasons: internal
chaos, the departure of foreign technicians, the abandonment
of the previous government's development and defense
programs. And the fall of the Shah affected the calculations
of other OPEC members, because the collapse of a friend
of America of four decades--and our vacillating and
inhuman reaction to it--raised doubts in the minds of
other rulers associated with us about the value of American
friendship. Many moderate oil producers in the area know
only too well that their domestic practices are not better--
if as good--as Iran's. They fear the same fate from a
combination of domestic pressures and American disinterest.
OPEC meetings have increasingly seen the moderates hesitant,
on the defensive, fearful of exerting their power for
restraint. The definition of moderation has become the
minimum price radicals would accept.

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There is no doubt that there are forces at work
beyond our capacity to channel. But the art of policy-
making consists of identifying the range of effective
choice available to us. The conventional wisdom, in some
circles at least, is that our difficulties arise because we
have always associated ourselves with the wrong groups,
with leaders who lack public support, and that we should
make an effort to ally ourselves with the "popular will."

The reality is much more complicated. First, many
so-called "progressive" regimes maintain domestic order--
the test apparently applied to determine the loyalty of
the population--by more effective repression; by this
standard the "right side" to be on is that which is not
inhibited in its repression by association with us, and is
more successful at it. Marxist totalitarianism there-
fore seems exempt from human rights strictures as currently
practised.

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What we consider "normal"--constitutional democracy--
is in fact a rarity both in the sweep of history or the breadth
of the planet. This is no accident. Constitutional
democracy places authority in an abstraction: obedience to
law. But constitutionalism can function only if law is
believed either to reflect an absolute standard of truth
or at least to grow out of a generally accepted political
process. In most parts of the world and in most periods
of time, these conditions have not existed. Law has been
the verdict of personal authority, not of constitutional
arrangements; the political process has been conceived
as determining who has the right to issue orders. Personal
authority has either been made bearable by a concept of
reciprocal obligation as in feudal societies, or been limited
by custom as that of kings who claimed to rule by divine
right. In each case, tradition was a limiting factor; certain
exactions were impossible not because they were forbidden

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but because they had no precedent. No ruler of
eighteenth-century Europe could levy income taxes or
conscript his subjects; authoritarianism, in short,
was usually quite precisely circumscribed.

It was paradoxically the emergence of popular
government that expanded the scope of what authorities
could demand. The people by definition could not oppress
itself; hence its wishes--as expressed in elective
assemblies or rulers in its name--were absolute.

The growth of state power has gone hand-in-hand with the
expansion of populist claims.

In this context, modern totalitarianism is a carica-
ture, a *reductio ad absurdum* of democracy; modern authori-
tarianism--a quite different phenomenon--is an aberration
of traditional personal rule. This is why some authoritarian
governments--like Spain or Portugal or Greece--have been
able to evolve into democracies. No totalitarian state

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has ever navigated that passage.

The American dilemma is that in most developing countries, authority is personal. We seem obsessed with "reforming" authoritarian governments friendly to us while only totalitarian states hostile to us are ruled out of bounds for our interventionism. The tragedy is that we have no idea how to effectuate the delicate transition to constitutionalism--a process that in the West took centuries. What we do have is a predilection for harassing friendly governments, the result of which has been to encourage not the moderate constitutionalists but the radical totalitarians who emerge in the form of terrorists or guerrillas. The outcomes have been disastrous.

A vicious circle is created. Evolution of constitutional rule has historically required a period of tranquility and of at least moderate economic progress. These are inevitably thwarted when terrorists or guerrillas mark a society for assault. The government is tempted into acts of repression

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which undermine its authority, and the chaos polarizes
the society so that the premise of the democratic process--
that the loser accepts his defeat and in return is given
an opportunity to win on another occasion--cannot be realized.
The victims of terrorist attacks are usually the ablest
and most dedicated officials, leaving the corrupt in place
whose transgressions multiply as they attempt to compensate
for the peril of their station by accumulating the maximum
material compensations.

In recent crises of this sort, the American tendency
has been to force its imperiled authoritarian ally to
"save itself" by accelerating democratic reform. But once
matters have reached the point of civil war--particularly
if the assault is externally supported--reform is often
seen as a sign of weakness. Nor, generally, do the
radicals who challenge authority by violence seek democracy.
What they want is power for themselves, for their own brand

tyranny. Another favorite recipe for Americans is to urge
a coalition government. Yet the possibility of compromise--
the essence of democratic government--is the first victim
of such a struggle; civil wars almost without exception
end in victory or defeat, never in coalitions. The time for
reform is *before* civil disorders break out, in order to
preempt them--a lesson often neglected in recent decades
and that does not always work when the insurrection is
inspired, financed and trained from outside the country.

The next occasion for reform is *after* victory, but Western
inhibitions and authoritarian incompetence usually combine
to prevent the testing of this hypothesis. This was the
tragedy of Indochina, as well as of Iran.

I have dedicated so much space to these theoretical
reflections to point out that while America has sometimes
settled too readily for the status quo, recently the
American pressure for change has more often accelerated

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the process of domestic disintegration than arrested it.

Convinced that our model is of universal validity, we have sought to implant it without regard to historical circumstance. In truth we know next to nothing of the dynamics of other societies, perhaps least of all those in the oil-producing areas; for all our tinkering with "reform," we have given little useful advice on how to navigate the tricky passage to more liberty without wrecking authority. Hard-pressed governments beset by an implacable domestic enemy are often reduced to paralysis by advice which they know is dangerous but which they dare not reject because they have counted on our support.

Certainly we must understand and foster the process of change. Conventional Western academic wisdom has taken it for granted that economic development automatically would produce political stability as it had in Europe and Japan after 1945. But in those societies political institutions

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had a long history; the threat to stability was the
gap between economic expectation and reality. As this
gap was closed, the underlying political reality asserted
itself. In developing societies, by contrast, rapid
modernization undermines traditional social structures
and patterns and therefore produces political instability.
What we have lacked, in short, is a concept for the most
complex aspects of political change: the problem of political
authority during the process of modernization. The West
has a theory of economic development but no theory
of political development. The assault in Iran did not
come from acolytes of the Western liberal notion of progressive
change. Ironically the disruptive force in Iran was the
very process of modernization, led by a ruler who, like
his father saw himself as a secular modernizer in the mold
of Ataturk in Turkey. The reaction came from groups threatened
by economic progress, such as the conservative land-owning
clerics who resisted land reform and objected to mass

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education and women's rights; they found fertile ground
for agitation in the peasants that migrated from the
villages to the industrial cities and were rootless, isolated,
and spiritually threatened in soulless metropoles. They
all found moral sustenance in a religious fervor directed
against the secular modernism of the West--and, to some
extent, also against the Marxism of the East. Marxism
has flourished in much of the Third World not because
it fulfills economic or moral necessities--which it
clearly does not--but because it provides a rationale
for centralized political power once other structures collapse.

Islamic theocracy has now emerged as a reaction to moderniza-
tion in all its forms, Western or Marxist. The combined
impact of these forces, however different, is to undermine
all pro-Western governments. The consequence of radical
ascendancy--however different its origins--is to reduce
our influence over events and shrink our scope for creative
action--as it has already hindered the Mideast peace process.

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The West has so far supplied no serious answers to this dilemma. It oscillates between sentimental invocations of its good intentions and a purely strategic analysis.

Neither approach is adequate. The upshot in energy is that as the price of oil leaps and oil wealth multiplies, radical countries use their new-found wealth against us while all the incentives of the moderate regimes will be to reduce oil production, since they fear the disruptive consequences of modernization that destroyed the Shah.

Both developments spell disaster for the West.

The problem is that however different their motives, whatever judgment one makes of the degree of Soviet influence in any one of them, the combined significance of the radical regimes is that they threaten to undermine all those forces that believe in peaceful evolution and close association with the industrial democracies.

Thus, we must be clear in our own minds what we can responsibly advocate with respect to domestic change. If

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no friendly country in the developing world is deemed worthy
of our support, and if we are unwilling categorically to
oppose forces of radical change hostile to us, then
all we have done is to make the world safe for anti-American
radicalism. What kind of groups will take over from
governments friendly to us who do not meet Jeffersonian
standards of virtue? What do we tell some of the key oil-
producing countries lies down the road if they follow our
reformist advice? What help can they expect if they
maintain their traditional structures?

Until we have answers to questions such as these,
we have no possibility of a sensible dialogue with the
oil-producing countries, even those friendly to us, on
either oil prices or domestic reform. Our natural allies
are not radical groups and forces but the moderate groups
which affirm peaceful change and sympathize with Western
goals. If the moderates are not to dissociate from us,
they must know, first of all, that we understand the

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realities of their situation. They must be given reason
for confidence that we are prepared to cooperate with
them and, finally, to stand by them. For their own
survival, they must be willing to modernize not only
their economy but also their institutions. At the
same time they must understand the limits beyond which
we will not push them.

The Arab-Israeli conflict is without doubt a principal
factor in the turbulence of the Middle East. It does not
follow that resolving it is the sole key to peace. A
dangerous escapism has developed in the West, the illusion
that solving the West Bank problem is the *deus ex machina*
that will defuse all the region's other tensions. A
West Bank solution is important, but whether it contributes
to the solution of other problems depends on the nature of

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the settlement and the auspices under which it is
achieved. The outcome must not be one that tempts constantly
escalating demands by radical forces; it must create
incentives for moderation rather than be seen as a reward
for blackmail.

I do not believe that the status quo on the West Bank
can or should be maintained. I do not agree with Israel's
policy of continuing settlements on the West Bank during
negotiations or several other provocative actions taken
recently. But, given my analysis of the strategic and
ideological sources of the tensions in the area, it is
essential--as a matter of paramount principle--that we
not be driven by radical pressures. Those hostile to us
must not be given the message that we yield to blackmail.

A West Bank outcome that seems to reward anti-Western
radicalism will only accelerate catastrophe in the military

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and geopolitical dimensions of the Mideast crisis, leave
our moderate friends even more vulnerable, and compound
our energy problems.

I have consistently supported the Camp David process
and the Egyptian-Israeli peace treaty. I hope that the
Egyptian-Israeli autonomy negotiations succeed. Nothing
I am about to say should be construed as a criticism of
them, because they deserve a reasonable chance. But it is
important to remember that the central dispute about the
West Bank and Gaza is over political control, not over the
allocation of technical functions such as land use, water,
transportation or other municipal services. Sooner or later
the central problem must be addressed, either in the Camp
David process or in some other context if the stalemate
proves unbreakable.

In my opinion, the PLO's chief disqualification as a
participant in the negotiations is not simply its rejection
of U.N. Security Council Resolution 242, but its radical

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anti-American and anti-Western policies: its close
affiliation with and occasionally leadership of all radical
forces hostile to us in the Middle (including those
Iranians holding our hostages); its training of terrorists
on a global basis; and its intimate cooperation with Soviet
intelligence organizations. The PLO in its present incarna-
tion is not simply an implacable enemy of Israel; it supports
all forces hostile to the United States. Why we should
believe that such a group is waiting only to become
agrarian reformers in a demilitarized West Bank emirate
is not self-evident.

Secondly, far from becoming moderate after its
demands are satisfied, a PLO state in current circumstances
will have every incentive to attempt to subvert nearby
moderate governments, especially Jordan, if only to escape
the inevitable demilitarization provisions without which
no Israeli withdrawal of any extent is conceivable. The

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last thing the Middle East needs is another
radical state in the region attacking all existing insitu-
tions. This is not merely against the interests of the
United States; it is also against the interests of moderate
Arab states in whose well-being we have a stake. These
countries understand this perfectly well, whatever their
public statements, but our flirtation with the PLO compounds
their vulnerability.

Therefore, peace negotiations should be conducted
by existing states. The United States should promote
this not only be inviting Jordanian participation but by
demonstrating that any other route will lead to certain
failure. Our European allies on ly encourage radicalism and
stalemate when they push schemes incapable of realization.
Our allies indeed have a stake in diplomatic progress;
but they must not identify progress with demands the support
for which hides complex motives and will in the long run promote
instability.

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I also believe that the effort to solve the West
Bank problem in one grand gesture, defining all frontiers
and all relationships, is almost certain to fail. And
a prolonged inconclusive effort is bound, in its turn,
to compound the tensions in the area. In the current
negotiations based on the Camp David autonomy scheme do
not produce the desired outcome, I hope other avenues will
be attempted, including a Jordanian-Israeli negotiation.

These should aim at the rapid achievement of some interim
partial step, for example returning Arab populated areas
quickly to the jurisdiction of Jordan; further Israel
withdrawals and final borders would be the subject of
continuing negotiations to which all parties would be
committed. The political evolution of the populated Arab
areas from then on would be primarily an intra-Arab problem
and not an American, European, or Israeli problem.

It is in the common interest that we not chase abstrac-
tions but begin a process that can lead to some result. In
this manner progress can be made in the West Bank without

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further undermining the political stability of the area
and unleashing further radical tendencies.

## Response to the Energy Crisis

Since the first price explosion of 1973, we have learned
that the energy crisis is not a mere problem of transitional
economic adjustment; it is a grave challenge to the structure
of the free world's political and economic institutions.

The world's postwar financial system and mechanisms of cooper-
ation were never designed to handle so abrupt a price rise
in so vital a commodity or such massive shifts of wealth.

The problem will not go away by simply letting inflation
proceed; on the contrary, runaway inflation is part of the
vicious circle which drives up oil prices. Nor can the
financial imbalance be overcome by permitting the debt
of consumers to expand indefinitely, even though this is what
has been happening. The gradual impoverishment of the
industrialized world is certain to end in financial

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catastrophe with grave political consequences. Finally, for a consumer/producer dialogue to be effective, certain objective conditions must be met.

There is no secret about what we must do. The industrial democracies must adopt stringent conservation measures, develop new and alternative sources, st strengthen collaboration among the consumer nations, address the plight of the poorest developing nations, and seek a more reliable long-term relationship with the producers.

Conservation, which is essential to any energy program, is painful and therefore not easy to bring about in a democracy. Measures such as automobile fuel-efficiency regulations are important, but they will take years to have a major effect. There is no law of nature keeping our domestic gasoline price to half of Europe's. We thereby effectively subsidize consumption and discourage domestic production. A higher price for gasoline is inevitable. What is not imposed by taxation will be inflicted on us

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by OPEC price increases.

No matter how energically pursued, conservation cannot do the job by itself. Even if it should reduce our reliance on imported oil to 1973 levels--a tall order requiring a reduction of over 15% of our consumption--it would still leave us highly vulnerable to embargoes and other politically motivated production restrictions.

In the long run, an increase in supply is the most reliable answer. In 1975, Vice President Nelson Rockefeller proposed a hundred-billion-dollar facility to help finance new sources of energy. Something like it has just been passed five years later, in the form of a synthetic fuels facility. Decontrol of domestic oil prices has been favored by at least two administrations, but then runs into ideological objections to not only the burden on consumers but the possibility of profits for those who produce. At some point we have to sort out our priorities. Every delay increases our vulnerabiltiy.

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But I am not here to advise the Congress on the
crucial social choices that must be made to allocate the
sacrifices and the benefits. Nor am I a technical expert.
I simply wish to point out the disastrous international
consequences of our continuing vulnerability, and urge that
the problem be dealt with as a matter of highest urgency.
Aside from our military defense, there is no project of
more crucial importance to our national security and
indeed our independence as a sovereign nation.

The extent of our vulnerability is shown by the
pressures to which we have been subjected. In the late
Sixties we were being urged by OPEC to buy more oil. Now
we are threatened with production cutbacks if we seek to
build up a strategic oil reserve. But we cannot tolerate
the imposition on us of permanent vulnerabilities. Building
a strategic oil reserve is a sovereign decision of the
United States and an essential matter of survival; the attempt

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to interfere with our doing it is a demonstration of why
it is essential. No country has a right to demand that
we remain eternally subject to blackmail. Strenuous
efforts must be made to build up a reserve.

But to overcome the vulnerability requires major diplo-
matic efforts as well. Since the establishment of the Inter-
national Energy Agency in 1974, cooperation among the
industrial democracies has not been adequate to the
challenge. Too many of the industrial democracies have pre-
ferred currying favor with the OPEC countries, competing for
some transitory special position or dissociating from our
negotiating efforts in the Middle East conflict. Competition
for preferential oil deals advertises vulnerability
and invites new pressures. Once the principle is admitted
that political conditions can be exacted for favorable
consideration on oil, political demands will accelerate.
Any special position gained by one country can be rapidly

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transferred to another that outbids it. Such a course is
in fact against the interest of the moderate oil producers.
Once the principle that a political price can be exacted
is established, they will become the first victim of radical
pressures to raise the political price. The moderates
thereby doom themselves to undermining the very countries
on which their survival depends.

We thus return to the need for solidarity among the
oil-consuming nations. This has been my consistent urging
since 1973. I do not accept the proposition that it is
proper for the producers to organize but a confrontation
if the consumers seek to cooperate with each other.

Solidarity is needed to cope with so-called Third
World. The developing countries are caught in an impossible
situation. Higher oil prices absorb most of their export
earnings; the bill for other imports mounts because of the
global inflation fueled by the energy crisis; and their own

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capacity to export is reduced because of the recession
in the industrialized countries which is another result
of the energy crisis. Thus a reexamination of the
development needs of the new nations is imperative. The
devastation of the developing world's hopes for progress
is a grim omen for the future of international politics.

Another subject requiring urgent attention is the
recycling of financial surpluses. By 1983 the financial
claims of the oil producers on the OECD countries will
reach half a trillion dollars. That amount cannot
be recycled by the commercial banking system; it will lead
to the bankruptcy and instability of many developing
nations; it will overtax the financial institutions of
even developed nations. Recycling is easiest precisely
into those countries that need it least; it will not abate
the devastating impact of current prices on nations whose
export earnings and foreign assistance are now largely

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absorbed by paying for their energy bill.

All these factors underline the urgent necessity
of a dialogue between consumers and producers. The agenda
for such a dialogue is obvious. The consumer countries
have a political stake in the independence of the
producer nations, even those whose domestic policies
are repugnant to us, such as Iran. The producers in turn
have a stake in a stable and growing world economy,
because many of them depend on it for their technology,
for their development and in a deeper sense for their
independence.

Whoever is President of the United States next year
has the duty, and the opportunity, to lead the way out of
these dilemmas. The United States is better able than others
to regain some mastery over events. We have the domestic
resources, the technological skills, and the creative
genius to transform the world's energy market and reduce
the cartel's stranglehold on the world economy.

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Decisive American efforts to surmount the energy
crisis would transform the international environment--
dispelling the clouds of political demoralization,
reinvigorating the world economy, and strengthening our
security. Thus will freedom be vindicated and the democracies
flourish, bequeathing to our children a world not of crisis
but of hope.

OIL AND INTERNATIONAL POLITICS

Evolution of the Oil Crisis

The last three decades have been a history of our
increasing dependence on imported energy. In 1950, the
United States was virtually self-sufficient in oil.
In 1960, our reliance on foreign oil had grown to
16 percent of our requirements. However, we still were
producing short of capacity;
we could have done without oil imports. We thus were
in a position to affect supply and demand and thereby to
reduce prices by increasing our own production.

So long as the United States was self-sufficient, we
were invulnerable to embargoes and we had some influence
over the world price. We could go far toward ensuring
that the world economy had available to it adequate supplies
of oil at reasonable prices. OPEC's power as an effective
cartel, as it developed only in the early 1970's, was only
dimly perceived.

By 1973, America's dependence had doubled to 35 percent and we were producing at capacity. Henceforth, any increase in consumption would increase the bargaining power of the foreign oil producers. Any restriction in production by them would drive up prices. The theoretical possibility grew into crisis when in response to the Middle East war the Arab oil producers embargoed the United States and certain West European countries. Since then, our dependence has grown, not diminished. In the winter months of 1977, oil imports for the first time reached a rate of 50 percent of our oil consumption, a figure which has now become the average.

In April 1973, I gave a speech about the so-called Year of Europe, listing energy as one area in which cooperation among the industrial democracies was imperative. There was no serious response to this initiative. Insofar as any comments were made in Europe, the reaction was that this was a device by which the United States sought

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a preferred position among the Mideast suppliers.

I seriously wonder if even OPEC realized in 1973 what the implications would be: that in less than a decade the total oil bill paid to OPEC by all other countries would amount to $270 billion, or one quarter of a trillion dollars. This is a colossal drain on the world economy and a colossal shift in the world balance of power. In 1973 and 1974, after the first price explosion occurred, it was considered axiomatic in our government that the total oil bill--it was then $30-40 billion for the industrialized countries, at about $12 a barrel--was excessive and could not be sustained for an indefinite period of time. Perhaps the industrialized world became complacent because the financial problem seemed to be solved largely through recycling by commercial banks.

A second crisis in 1979 has caused the oil bill to more than double again. As Walter Levy has pointed out in an illuminating article in the spring issue of *Foreign Affairs*,

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the financial crisis may _not be_ soluble this time, and
our future is now at the mercy of a precarious political
status quo in what is probably the most volatile, unstable
and crisis-prone region of the world.

Let me address myself now to the international
environment in which the world must now seek to address
the energy problem, particularly the Middle East and
Persian Gulf. Then I will suggest what the energy-
consuming nations, the industrial democracies, can do to
influence this environment.

This is not the first time in history that the Middle
East and Persian Gulf have been a focal point of world
affairs. The region has always been considered geopolitically
crucial. It is a region of profound passions, remarkable
personalities, and almost perpetual ferment. Its stark
landscape and vast skies draw man to infinity; it is no
accident that three of the world's great monotheistic

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religions had their origins there. The area has
always been a hub of world affairs, producing itself
several of the recent wars. Today it is a focus of potential political
and strategic conflict above and beyond the crucial
concern for oil.

There are three aspects to relationship between
geopolitics and oil. First, the area's relationship
to the global balance of power. Second, the interaction
between the moderate and the radical forces in the Middle
East. Third, the Arab-Israeli conflict and the efforts
to resolve it. I do not believe it is possible to deal
with the region's problems by addressing one of these
aspects in isolation, even one as dramatic as the
Arab-Israeli conflict.

It is important to understand that Middle East leaders
have a highly-developed sense for the nuances of the balance

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of power. They may clothe it in the conventional liturgy
of non-alignment, but they understand that their security
depends on an overall balance of power. Their perception
of America's ability to prevent superpower pressure is
therefore crucial. They knew that an equilibrium of power
would make it impossible for expansionist countries either
to blackmail them, complicate efforts, subvert their domestic
structures, and in the last resort, to repeat the pattern
of Afghanistan. Understandably, leaders who cannot themselves
contribute a great deal to a global balance might wish to
remain aloof from the day-to-day diplomacy by which the
East-West contest is played out. Their danger, however,
is that the West might take their statements of disinterest
at face value.

We have been told for too long that the problems in
the so-called "arc of crisis" have complex socio-economic
causes, that they are not essentially military porblems,

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that not every upheaval is of direct concern to us,
and that we do not really have that much influence over
events anyway. This is true but irrelevant; the
attitude of abdication leads to self-fulfilling prophecies. The
West's military vulnerability has produced a pervasive
sense of insecurity whose direct effect is to shift
political alignments and alter the course of events to
our detriment in almost every sphere, economic as well
as military.

We face at this moment a crisis of global dimensions
produced in significant degree by the fact that the
industrial democracies have neglected their defenses.
For too long the Soviet Union has been increasing its military
capacity at the steady rate of 5 percent a year, which
compounded over 20 years means a tripling of that capacity,
while the West's defense efforts have been impeded by
domestic divisions or lassitude.

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In the last five years, beginning with the collapse
of Indochina and the fiasco of Angola, almost every
significant change in the world has been produced by
Soviet weapons, Soviet friendship treaties, Soviet
proxy troops, or outright Soviet invasion. The Cuban
army has imposed solutions in two African conflicts and,
in the Horn of Africa, threatens the security of moderates
in the Middle East. In Southeast Asia the army of Communist
Vietnam, stocked with Soviet weapons and backed by a Soviet
friendship treaty, occupies Cambodia and threatens Thailand.
A strong pro-Western government collapsed in Iran, not
directly caused by Soviet pressures but nevertheless
profoundly affecting the regional balance of power. There
have been two invasionsof Zaire from Communist-held
territory. Morocco is under pressure from Communist-
armed guerrillas. The resulting sense of insecurity has
affected the perceptions of many key countries, slowing

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down the Mideast peace process, removing Soviet inhibitions
to invading Afghanistan, driving traditional friends
like Pakistan to reject our assistance and to embrace
neutralism.

The impact of shifting strategic realities on
the price of oil occurs on two levels. The first is the
attitude of moderate oil producers. Even while
restricting production, several Middle East countries
are still producing more oil than their own economic
necessities warrant and absorbing more revenues than
their domestic development programs require. Thus
paradoxically the present exorbitant oil price is
being held down by some OPEC countries' willingness to
produce beyond their needs. This is the price they
are still willing to pay for Western and particularly
American military protection. To the extent that the
global balance of power is perceived to shift--or, to
put it another way, to the extent that the American

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capacity to manage events to deter foreign aggression
or domestic upheaval is perceived to decline--our
ability to engage in a useful dialogue on seemingly
purely economic questions such as the price of oil is
also profoundly eroded.

The second impact is the reverse side of the first.
The so-called Carter Doctrine has been received with
such a lack of enthusiasm among the countries supposedly
protected by it because of a growing doubt that we have
the means or maybe the will to implement it. Leaders in
the area understand from centuries of national experience
the importance of an unsentimental appreciation of the
balance of power; I am sure that they do not believe that
their countries' security can be maintained by declarations
of goodwill or solidarity with other countries equally
unable to protect themselves. Their dissociation from us
reflects, rather, their assessment of the trend in the
global balance. Therefore it is imperative for the United

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States to restore its military capacity and, above all, to
make it relevent to the relevant areas of the world.

The President was right to declare our strategic
stake in the security of the Persian Gulf. Having done
so, it is a bipartisan obligation to contribute to a
concept for its implementation and to provide the means
to do so.

The military policy of the industrial democries is
still too much influenced by the strategic doctrines of
the 1950's when strategic nuclear weapons were considered
capable of preventing every foreseeable challenge including
attacks on such regions as the Middle East. Obviously,
we must ensure that strategic equivalence is maintained.

This will require major efforts. But henceforth it will
solve only one of our perils: the danger of an all-out
attack on the United States and perhaps on Europe. The
overwhelming military problem of the next decade

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will be the crucial vulnerability of other areas under
conditions of strategic parity. Unless determined
efforts are made to restore regional military balances,
the pressure on countries close to the Soviet periphery
is bound to increase. The existing sense of pervasive
insecurity will grow. Countries allied with the Soviet
Union or backed by it will grow bolder and bolder. States
known for their traditional friendship with the West will
grow more demoralized and frustrated and threatened.

And in those circumstances it will be increasingly difficult
to conduct a responsible dialogue with the oil producers.
Restringging the military balance is not the sole road
towards a constructive policy; but no constructive policy
is possible without it.

The Balance Between Moderates and Radicals

The second dimension of the geopolitics of energy
concerns the *balance between the moderates and the radicals*

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in the Middle East. In the area stretching from
Morocco to Pakistan, the past decade has seen great
domestic turmoil and change.

Whether moderate or radical regimes predominate
depends on many factors outside our control. Nevertheless
it affects crucially the diplomacy of energy. The collapse
of the pro-Western government in Iran was a major factor
in the latest explosion of oil prices. This was partly
as a result of Iranian production cutbacks, partly
because the collapse of a friend of America's raised
doubts in the minds of other rulers associated with us
about the value of American friendship. OPEC meetings
have increasingly seen the moderates on the defensive.
The definition of moderation has become the minimum
price radicals would accept.

There is no doubt that there are forces at work here
beyond our capacity to channel. But the art of policy-
making consists of identifying the range of effective

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choice available to us. The conventional wisdom,
in some circles at least, is that our difficulties
arise because we have always associated ourselves
with the wrong groups, with leaders who lack public
support, and that we should make an effort to ally
ourselves with the popular will.

I believe the reality is much more complicated.
First, revolutions are not invariably caused by repression.
There seem to be no revolutions, or no successful ones,
in totalitarian countries that are infinitely more
repressive than the authoritarian ones with which we are
associated in the Middle East. What we

consider "normal"--a constitutional democracy--is in fact
a rarity both in the sweep of history or at any one point in
time. This is no accident. Constitutional democracy places
authority in an abstraction; obedience to law. But this
can function only if either law is believed to reflect an

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absolute standard of truth or at least to emanate from a
generally accepted political process. In most parts of the
world and in most periods of time these conditions have not
existed. Law resulted from authority, not from justice;
the political process has been conceived as determining who
has the right to issue orders. Authority has been made
bearable by a concept of reciprocal obligation as in feudal
societies, or as limited by custom as was the case with
the kings by divine right. In each case tradition was a
limiting factor; certain exactions were impossible not because
they were forbidden but because they had no precedent.

No ruler of 18th century Europe could levy income taxes
or conscript his subjects; authoritarianism in short was
quite precisely circumscribed. It was paradoxically the
emergence of popular government that expanded the scope of
what authorities could demand. The people by definition
could not oppress itself; hence its wishes--as expressed in

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elective assemblies--were absolute. The growth of government
has gone hand-in-hand with the expansion of populist claims.

In this context modern authoritarianism is an aberration
of traditional personal rule; modern totalitarianism a
caricature, a *reductio ad absurdum* of democracy. This is
why some authoritarian governments have been able to evolve
into democracies--witness Spain or Portugal or Greece.
No totalitarian state has ever navigated that passage.
Personal rule has inherent limits; government that claims
to reflect a popular mandate knows no such restraint.

But for this precise reason authoritarian governments
are infinitely more susceptible to internal subversion than
totalitarian ones. They are inferior in the means of
repression; above all they usually lack the conviction to
employ them ruthlessly. When the personal bond of reciprocal
obligation is broken, both rulers and subjects become
demoralized; the former because they have no legitimacy for

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governing by naked force, the latter because once the
criteria of obedience have evaporated all exactions turn
oppressive. Our dilemma is that in most developing
countries authority is personal. But the transition to
constitutionalism is a delicate process; the notion of
accepting electoral defeat is no more natural in traditional
societies than of registering political views at the ballot
box. That transition requires a period of tranquility and
of at best moderate economic progress. It is inevitably
thwarted when a totalitarian movement succeeds in organizing
a guerrilla movement. This forces the government into acts
of repression which undermine its authority and demoralize it;
it divides the society so that the premise of the democratic
process--that the loser accepts his defeat and in return
is given an opportunity to win on another occasion--cannot
be realized. The victims of terrorist attacks are usually
the ablest and most dedicated officials, leaving the corrupt

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The American reaction to this process derives from the
conviction that the imperiled authoritarian government can
best maintain itself by accelerating democratic reform.

But the fundamental cause of a civil war (of which guerrilla
war is a special category) is the breakdown of domestic
consensus. Compromise--the essence of democratic
government--is its first victim; civil wars almost without
exception end in victory or defeat--never in coalitions, our
favorite recipe. The time for reform is *before* civil
wars break out in order to preempt them--though this does not
always work when the *insurrection* is inspired, financed and
trained from outside the country. The next occasion for
reform is *after* victory, but Western inhibitions and
authoritarian incompetence usually combine to prevent the
testing of this hypothesis.

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There can be little question that our pressure more often accelerates the process of disintegration than arrests it. Convinced that our model is of universal validity we seek to implant it even under conditions when in the United States our civil liberties were restricted--as during the Civil War. When the crying need is for an assertion of authority our advice usually dilutes it. And hard pressed governments beset by an implacable domestic enemy are often reduced to paralysis by advice which they know is dangerous but which they dare not reject.

The causes of domestic turmoil to some degree arise from the fact that the West has a concept of economic development but no theory of political development. The eruption in Iran did not come from those who fit the conventional Western liberal notion of progressive fighters for democratic change. The disruptive force in Iran was the process of modernization triggered by a leader who saw himself as a

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progressive secular modernizer in the mold of Atatürk in Turkey. The instability came from groups threatened by this process, such as the conservative land-owning clerics, and from the mass that migrated from the villages to the industrial cities and found themselves rootless, isolated, and spiritually threatened. They found moral sustenance in a religious fervor directed against thematerialism of the West and, to some extent, also against the Marxism of the East.

Conventional Western academic wisdom took it for granted that economic development automatically would produce political stability as it had in Europe and Japan after 1945. But in those societies political institutions had a long evolution; the threat to stability was the gap between economic expectation and reality. As this gap was closed the underlying political reality asserted itself.

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therefore produces political instability. All these
countries face the problem of what form of political
authority replaces what is displaced by the process of
modernization. Marxism has flourished in the Third
World not because it fulfills

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economic or moral necessities--because it does not--but
because it provides a rationale for centralized political
power. Islamic theocracy seems to be a new alternative
whose viability is yet to be determined.

The West has yet to provide its own answer. If we
have no alternative model to offer, the paradoxical result
will be that as the price of oil rises and wealth multiplies,
the radical countries will use their new-found wealth
against us while all incentives of the moderate regimes
will be to reduce oil production, since the impulse for rapid
economic development has waned.

The conflict between moderates and radicals within
the developing world is thus a central issue of our time.
Not every radical regime is the same, of course. Some,
like South Yemen, are clearly pro-Soviet and _de facto_
Soviet military bases. Libya, while not pro-Soviet in
its domestic orientation, is operationally a Soviet ally
in its foreign policy; it supplies arms to every anti-

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Western country or movement or terrorist group in the
Middle East and Africa. Iran is a radical regime with
clerical bias; it is hardly pro-Soviet but it is certainly
anti-American for its own reasons and a supporter of
other radical groups in the area. Then there are radical
governments such as Iraq or Syria, of more secular orientation.

The problem we face is that however different their
motives, whatever judgment one makes of their long-term
prospects or the degree of Soviet influence in any one of
them, their combined impact is to undermine those forces
in the region that have relied on the West and believe in
peaceful evolution. Their impact is to reduce our scope
for creative action--as their apparent ascendancy has
already hindered the Mideast peace process.

We must be clear in our own minds what we can responsibly
advocate with respect to domestic change. Friendly countries
are now asking what we want them to do in the face of

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pressures from the outside and the challenges of modernization,
whether the changes we press on them are compatible with
their own image of themselves, whether we will back them
up if liberalization generates radical domestic pressures
threatening to go out of anyone's control.

This is not an easy responsibility for the United
States to undertake. If no allied country in the developing
world is deemed worthy of our support, and if we are unwilling
to oppose forces of radical change hostile to us, then all
we have done is to make the world safe for anti-American
radicalism. What kind of groups will take over from
governments friendly to us who do not meet Jeffersonian
standards of virtue? What do we tell some of the key
oil-producing countries lies down the road if they follow
our reformist advice?

With answers to questions as these, we can have a
sensible dialogue with the developing oil-producing countries.

We do not need client states. America's interests are served if all the countries of the Middle East are genuinely independent, self-reliant, and nonaligned. But the states in the area also have a choice to make. They cannot use us as a whipping boy to play out their domestic dramas; if they continue on this path they will not only jeopardize their own security (which is their own problem) but will undermine the security of the whole region, including that of our traditional friends.

In the Middle East, as elsewhere, we must free ourselves of the illusion that the radicals are our natural allies. They are not. Our natural allies are the moderate governments that have been associated with us. They must know, first of all, that we have a grasp of intangibles of their situation. They must be made to feel that we understand their necessities. They must be given an understanding that we are prepared to cooperate with them and finally, to stand by them.

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The Arab-Israeli Conflict

The Arab-Israeli conflict is without doubt a
principal factor in the turbulence of the Middle East.
It does not follow that it is the sole key to peace.
A dangerous escapism has developed creating the impression
that solving the West Bank problem is the deus ex machina
that will defuse the region's other tensions. Whether this
is in fact the case depends on the nature of the settlement
and the auspices under which it is achieved. A "solution"
of the West Bank problems must not tempt constantly new
demands; it must create incentives for moderation rather
than be seen as a reward for radicalism. I do not believe
that the status quo on the West Bank can or should be
maintained. I do not agree with Israel's settlement
policy.

But, given my analysis of the strategic and ideological
origins of the tension in the area, it is essential as
a matter of principle that we not let ourselves be driven

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by radical pressures. Those hostile to us must not be
given the message that we yield to blackmail. On the
contrary, it is healthy if they learn that pressure is self-
defeating. It is crucial that the military balance
and the geopolitical aspect of the Mideast problem be
dealt with if peace is to result from dealing with the
West Bank problem.

I have consistently supported the Camp David process
and the Egyptian-Israeli peace treaty. I hope that the
Egyptian-Israeli autonomy negotiations will succeed.
Nothing I am about to say should be construed as a criticism
of them, because they deserve a reasonable chance to overcome
the remaining obstacles. But it is important for all of
us to remember what the real issue is: The central
dispute is over political power, not over the allocation
of technical functions such as land use, water, transportation
or other municipal services. Sooner or later the central
problem must be addressed, either in the Camp David process