Passing Around
the Tin Cup

Aid: What will peace cost? And who will pay?

By MICHAEL ELLIOTT

YOU'RE THE LEADER OF WHAT EVERYONE calls the only remaining superpower. You get the prime minister of Israel and the chairman of the Palestine Liberation Organization to shake hands on the South Lawn of the White House. You've just spent some quality time with the pope, so you know how to spread your arms around those old enemies beatifically, which makes for a great photo. You're probably looking forward to the roseate glow of approval from grateful foreign leaders and an admiring domestic audience. Here's the bad news: you and your officials are going to spend the next few months rattling a tin cup for contributions to rebuild Gaza and the West Bank. You're not going to get many plaudits if you do everything right, but everyone will blame you if things go wrong.

This week Secretary of State Warren Christopher will seek pennies for peace. In a speech at Columbia University, he will stress the importance of economic development in the occupied territories, where water and power are in short supply and public health is at risk. Christopher's effort at Columbia is the first of a fall offensive by the administration's top foreign-policy officials, who, like a bunch of Mafia godfathers, think that they have not received sufficient respect for all their good works.

The day after Christopher's speech, Anthony Lake, the national-security adviser, is to set out the administration's vision of a post-cold-war world (so silent has Lake been this year that insiders are dubbing the speech "Garbo speaks"). Madeleine Albright, the United Nations ambassador, has a big production in the works, to say nothing of Clinton's own offering at the United Nations General Assembly on Sept. 27. Clinton intends to take advantage of the presence of many foreign ministers in New York to call a conference of those willing to help in the economic reconstruction of the occupied territories.

How much cash is needed? Less than many think. The State Department reckons that the Palestinians need about $2 billion in aid in the first five years of peace—compare that with the $28 billion which in April the Group of Seven industrial countries thought was needed to rebuild Russia. The planned American contribution is sim-

ilarly modest, as these things go, about $150 million to $200 million over the first two years of the plan.

Even such a number will be politically acceptable only if other countries do their bit. The good news, so far, is that they look as if they will. The European Community is considering a plan to provide $590 million to the Palestinians over five years. The State Department expects Japan to be as generous as the Americans. What about the rich Arab states of the Gulf Cooperation Council, including Saudi Arabia, no fans of the PLO since its leaders backed Iraq during the gulf war? State Department sources think they will ante up—they say the gulf states stand ready to make a "major contribution" to aid, though the Kuwaiti Embassy said this week that Kuwaitis were still "deeply hurt" by PLO support for Iraq. But even if Kuwait stays out, it should not be difficult to raise $2 billion over five years.

**Picky rules:** The unexpected problem is this: unless some legal difficulties are resolved, it will be hard to spend the loot. American law prohibits sending money to the PLO, although Senate leaders have told the State Department that they are willing to see the law changed. And then there is the World Bank, the main source of financing for projects in the developing world, with its own picky rules. The bank can lend to projects only in the territory of a member state, and its loans must be guaranteed by a government. The West Bank and Gaza are not members of the bank, and there is no "Palestinian government" able to guarantee that any loans would be repaid.

Officials at the bank and at the State Department say, hands on hearts, that they are going to work this out. In the short term, the bank thinks that it can cobble together two "trust funds"—worth perhaps $85 million—to prepare feasibility studies for bigger projects and provide some emergency assistance to Gaza, where life is particularly hard.

Long term, Israel, Jordan and the occupied territories could always form a free-trade area in which goods and people can move freely, as proposed recently in a Harvard University study. Then aid to any one country could be said to benefit all. This is not as mad as it sounds; Bishara Bahbah, a member of the Palestinian delegation to the Middle East peace talks, says that Yasir Arafat told him recently that he wanted to see a common market in the region, though Israeli farmers—their olives and melons more expensive than those of their Palestinian neighbors—might not like it much.

Thinking about whether to push such proposals is how Clinton and Christopher will now spend their time. The Washington Post reports that an overhaul of the whole American foreign-aid program is underway. This is all hardly the stuff to woo an electorate that seems fixated on domestic, pocketbook issues. Even peace in the Middle East has brought the president only modest political success. Jimmy Carter got an astonishing, though short-lived, 23-point bump in his approval ratings in the week after his mediation at Camp David. Bill Clinton's bump after the peace accord was announced? Just three points. ■

ALLAN TANNENBAUM—SYGMA

Crammed into camps, Palestinian refugees wait for the chance to run their own lives

SEPTEMBER 27, 1993 NEWSWEEK 31

myself as coming from Jaffa. My children, who have never lived in Palestine, will also tell you they are from Jaffa." At the same time, he was voluble—and I believe sin-cere—in protesting his yearning for peace.

The follow-on negotiations must strive to remove this ambivalence. They must make clear that there is a point beyond which Israel should not be asked to make concessions, and that Israel's international support has been enhanced by the risks it is taking for peace. They must also convince the Palestinians that their dignity is an essential aspect of a final settlement.

It will be painful for each side to accept the consequences of its own decisions. After the elections in the occupied territories, which must be held in nine months' time, the Israeli recognition of the Palestinian entity will be irrevocable, as will the withdrawal of Israeli troops. Israeli politicians who speak blithely of abrogating the agreement or of reoccupying vacated areas are deluding themselves. The international isolation such acts would produce would prove unsustainable. And even if Israel should withdraw its recognition of a Palestinian entity, the rest of the world would not follow.

**Benefits:** At the same time, the Palestinians must not delude themselves that they can resort to their traditional pressure tactics. The follow-on negotiations cannot succeed and coexistence in the occupied territories would be thwarted if the PLO returned to harassment, not to speak of terrorism.

In the immediate future, Israel will gain considerable benefits. It will no longer need to deal with the nearly half of the total Arab population of the occupied territories living in Gaza. It will be able to withdraw its forces from the population centers in the rest of the occupied territories and thus reduce, perhaps even eliminate, the impact of the *intifada*. Cooperative patterns between Israeli and Arab authorities on the West Bank are sure to develop. Relations with other Arab countries will improve, though I would expect full recognition to be withheld pending an overall settlement.

The Palestinians' major achievement in the initial period is the de facto recognition of a Palestinian entity and the establishment of the PLO as the governing authority in the occupied territories. After a while, this fact is bound to alter the negotiating pattern fundamentally. Once follow-on talks begin, the continuing presence of Israeli settlements, military bases, and unrestricted use of roads is certain to be challenged—perhaps even in the interim period of two years and surely after that.

An even more serious challenge may come from within the Muslim world. Since 1948, every major step toward peace in the Middle East has been followed by an in-

crease in terrorism. Dissident groups have tried to interrupt the process either by assassinating those who carried it forward, as happened to Sadat, or by triggering Israeli retaliation. Some leading Israelis seem to believe that Arafat and the police force that the PLO will be permitted to organize will help keep the West Bank quiet. But the "strong" Palestinian police force envisioned in the agreement is likely to become, at best, a study in ambivalence. With what energy will they resist acts aimed at subverting the Israeli presence? With what conviction will they pursue terrorists returning from Israel? When will they become the problem rather than the solution?

The most serious danger is that the dissentient groups will try to create Lebanese-style

conditions in the occupied territories. The central authorities may not be able to prevent terrorism, either against moderate Arabs or against Israelis. If conditions become too chaotic, Israel may intervene, or outside Arab forces may try to infiltrate the West Bank, or both. The same result could occur if the PLO entity seeks to intervene in Jordan. All these developments could usher in another Middle East war.

The prospects of a permanent peace thus depend on how well the interim arrangements can be made to work, and after two years whether the follow-on negotiations on Jerusalem, borders, settlements, etc. will show progress. In this respect, the outside world has a major responsibility. While the role of economic development is often exaggerated, in this case rapid progress in that

field is one of the few tools available to give the parties—especially the Palestinians—a stake in an evolutionary approach. A substantial aid program is necessary. America has quite properly taken the lead, but major resources must come from the Arab world. In addition, the world community has an obligation to come down hard on terrorism. Heretofore, the pattern has been token opposition to terrorism and passionate condemnation of Israeli retaliations. That pattern must end.

But the ultimate challenge remains the follow-on negotiations. Fitting two states into a territory fifty miles wide—the distance from the Mediterranean to the Jordan River—would be difficult even if irredentism were not built into the situation. This

remains above all a psychological problem. Israel will have to navigate between the two extremes of an occupation mentality on the one hand, and a nearly mystical belief in a formal peace (for which there is no historical warranty) on the other. After all, most wars start between countries that are legally at peace; recognition has never precluded war or even conquest. The PLO must overcome the twin temptations of sustaining the intifada and using softer language to disarm Israel while pursuing its traditional objectives.

America's role should be to rally support for the development of the autonomous area, insisting that most of these funds come from the Arab world. It should use its influence with the moderate Arabs to end their boycott of Israel, and to encourage Palestinian restraint. It should be available at times of deadlock, but without returning to its dominating role. And it should organize plausible international sanctions against terrorism and make clear to the PLO that this is a key test of its seriousness.

What America must not do is to offer its military forces as the *deus ex machina* for solving every security issue. Nothing would more undermine the willingness of the American people to support the peace process than a permanent stationing of U.S. combat troops, especially in the heavily populated territories on the West Bank, where they could easily repeat the experiences of the Marine contingent in Beirut.

A formidable agenda thus lies ahead. Like all diplomatic documents, the agreement signed in Washington represents a compromise which must be compared not with what each side would consider ideal, but with what would exist in the absence of the agreement. All the parties must now learn to live with what they have built, which is quite different from what is familiar to them. The spirit of the emotional signing should be a huge help in getting the parties to their destination. ■

AP
Palestinian police train for duty in the occupied territories

## At what point will the Palestinian police force become part of the problem and not part of the solution?

SEPTEMBER 27, 1993 NEWSWEEK 33

NATIONAL AFFAIRS

# Clinton's Hard Sell

**White House:** Washington's political operating room is crowded with spin doctors. An advance look at the administration's health-care strategy.

BY HOWARD FINEMAN

BILL CLINTON IS BETTING ON A card. When he offers his massive plan for health-care reform to a joint session of Congress this week, he'll show off a model of the "health-security card" he wants every American to possess. This wallet-size bit of plastic is high tech: computer-en codable, able to contain its owner's entire medical history. It looks a lot like the social-security card—reflecting the goal of a man who wants to enact the most sweep- ing entitlement since the New Deal. But it also looks like a credit card, raising the theory that Clinton wants to send another subliminal message: Charge it! Let's get the benefits now and worry later about how to pay for them.

The health-security card actually is the centerpiece of two plans: Clinton's health-care reform and the approach to selling it. The first would reshape one seventh of the economy, revise the spreadsheets of every business and household, and force a re-examination of the role of medicine in American life. The second is aimed at Washington's political operating room, which is already crowded with more spin doctors than any presidential primary. Here's a closer look at the White House sales strategy at the start of one of the biggest lobbying campaigns of all time:

**Shout 'Fire!'** Clintonites claim that average Americans know all too well how unstable the existing system is. To make sure no one misses the point, the president and First Lady will spend much time highlighting "horror stories": citizens who lose coverage when they switch jobs, or contract an illness and are "dumped" by insurance companies. The message: this isn't about the laudable goal of "covering the uncovered," most of them poor. It's about you.

**Use real numbers.** The president thinks that voters will suspend their deep distrust of Washington in exchange for the promise of health-care "security." He'll lose that bet, worries a top White House insider, if he "comes off as just another tax-and-spend Democrat." So the numbers have to be valid, says former Ohio governor Richard Caleste, who heads the Democratic National Committee's lobbying effort on behalf of

## Special Interests Mobilize

As the Clinton administration prepares to sell a health-reform plan that promises to reorder one seventh of the U.S. economy, armies of interest groups are gathering along the Potomac. Among the participants:

### DOCTORS

The AMA is being cautiously supportive. Doctors want to be inside the tent to prevent price controls on procedures in fee-for-service private practice.

### INSURANCE COMPANIES

The bitterest foes, except for a handful of giants already in the health-care network business. Focus groups show the industry to be Public Enemy No. 1.

34 NEWSWEEK SEPTEMBER 27, 1993

SEP 18 '93 12:37PM 2123505146

164aster
999,34,34,34,516

Turning a Fairy Tale Into Reality
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BY HENRY A. KISSINGER

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ifor veterans of what goes by the name
of the Middle East peace process, the
ceremony at the White House had
the aura of a fairy tale. It seems only
yesterday that I walked the streets of
Tel Aviv with my valued and trusted friend
Yitzhak Rabin after the '67 war, when he was
the hero of conquests. Now he was seeking
to become an instrument of conciliation.
And next to me sat the serene and beautiful
Mrs. Sadat, suspended between hope
and regret that it took nearly twenty
years for Yasir Arafat, the leader who
had vilified her husband, to embrace
Sadat's noble path. In my last conver-
sation with Sadat a few weeks before
his assassination, he spoke of his
dream of building of building a
mosque, a church, and a synagogue on
top of Mount Sinai to symbolize the
hope for peace and reconciliation.
Would it now be Arafat who at last
fulfills that vision?

It was one of those rare occasions
on which hope suspends all doubt.
Neither I nor anyone else present will
ever forget the anguish and hope in
the nearly Biblical remarks of Prime
Minister Rabin. Nor could one fail to
be affected by the culmination of Ara-H
fat's torturous journey, which had fi-
nally brought him acceptance as a
world leader on a level with the other pro-
tagonists. President Clinton's dignified
chairmanship of the ceremony and the Rus-
sian foreign minister's minimal role also tes-
tified to the unchallenged global leadership
that is now America's.

Only the most churlish or fanatical would
refuse to join the almost palpable hope ex-
pressed at that historic ceremony. On the
other hand, statesmen who base their policy
on the expectation of recurrent miracles usu-
ally suffer shipwreck. In the years ahead, the
idyll on the White House lawn can only be
fulfilled if all the parties concerned apply its

SEP 18 '93 12:38PM 2123505146

P.2

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spirit to resolving the nagging questions
which remain. For example, what exactly
was being recognized by each party? Was it
premature (however unavoidable) to invest
Arafat with the aura of a head of state three
years after his support of Iraq in the gulf war,
and on the basis of ``granting'' Israel a status
that is the automatic prerogative of nearly
every other nation? Was the euphoria in
which we all shared a spur to the process?
Or will it prove an obstacle if it leads to
disillusionment after the inevitable dead-
locks appear? 17, .25, .5, 1

Whether the agreement leads to greater
flexibility or greater tension will depend cru-
cially on the United States. Until now, every
Arab-Israeli agreement has been brokered
by the United States, and many of the formu-
lae leading to solutions were designed in
Washington. Yet in the phase that is now
beginning America must not assume respon-
sibility for breaking all the deadlocks, lest it
give each party an incentive to shift the diffi-

cult choices to us. After the signing ceremo-
ny, one of the PLO negotiators said to me
that the PLO had learned that American
pressure on Israel for specific concessions
usually backfired and that a settlement could
be sold best to the Palestinians if it was
freely negotiated. 17, .25, .5, 1

On this occasion, the United States al-
lowed just that-staying on the sidelines at
crucial junctures and even allowing itself to
remain uninformed. Even now, America is
not needed on a daily basis, hard as this may
be for some of our more missionary experts
to accept. But what America should do-and
is the only country in a position to accom-
plish-is to use the confidence of both sides
to create the conceptual framework for pro-H
gress. America alone has the ability to recon-
cile the clashing notions of sovereignty, and

perhaps even to create areas of mixed sover-
eignty where the populations are particular-
ly intermingled. It should hold the line
against outside intervention, making clear to
traditional friends, especially to Israel, that
the peace process strengthens America's
commitment to their future, and making
clear to traditional adversaries that contin-
ued moderation is the only road to progress. 17, .25, .5, 1

The ceremony at the White House was
made possible, paradoxically, by ex-
haustion: material exhaustion on the
part of the PLO; psychological ex-