The Telegraph
Since 1st March, 1999
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- American blandishments may conflict with Arab society’s grassroots urges

Nothing could be more simplistic than the hope that west Asia, with its deep-seated political grievances, simmering anger and religious passions, can be won over by the promise of a free trade agreement with the United States of America by 2013. This economic equivalent of being invited to George W. Bush’s Texas ranch is like Lyndon Johnson jumping out of his car in New Delhi to say with open arms to the crowd, “Hey, folks, we want to help ya!” or Richard Nixon distributing ballpoint pens inscribed with his name in the same city.

American munificence must be acknowledged. No nation on earth has donated so much money, equipment, manpower and expertise to less fortunate peoples. From Marshall Aid to PL480 wheat, we have reason to be grateful to the US. Nevertheless, two things rankle. First, the politics of economics looms large after Operation Iraqi Freedom. Second, Bush’s argument that since “free markets and trade have helped defeat poverty, and taught men and women the habits of liberty,” all that west Asia needs is the opportunity to savour the American Dream.

The free trade agreement that the US recently signed with Singapore streng- thened that conviction because Americans cannot grasp that what is sauce for the goose need not be sauce for the gander. Unlike west Asia, Singapore is a wholly urban society whose economy depends on the fortunes of some 3,000 multinationals. It has a $33 billion trade turnover with the US with which its economy is already closely integrated. Indeed, Lee Kuan Yew’s boast that he distanced the island from its stagnant neighbourhood at the time of independence and hitched his wagon to the rising US star explains the Malaysian joke that it is America’s 52nd state, Japan being the 51st, although Tony Blair’s Britain might dispute that honour.

Singaporean exporters hope to save $110 million annually as the US slashes 92 per cent of its tariffs right away, with the rest slated to disappear in eight years. Free access will make a vital difference to banking, legal services and intellectual property rights. These advantages do not apply to agricultural countries like Malaysia which is an exporter of food and raw materials. Indeed, FTAs make no allowance for the needs of developing societies. The rich nations cling to their substantial farm subsidies while insisting that poorer countries that depend heavily on food exports liberalize their services sector. As India and South Africa know to their cost, the developed world also demands protection for Western patents for medicines and other products.

Malaysia’s international trade and industries minister, Rafidah Aziz drew attention to the politics of economics when she commented, apropos of the US-Singapore FTA, “I don’t think the world takes too kindly to the US attitude about punishing and rewarding.” She was referring to Singapore’s support for the invasion of Iraq, which Muslim Malaysia naturally opposed. Of course, Aziz’s invocation of the “world” can be questioned à la Oscar Wilde, for Singapore is on excellent terms with this one. For instance, Jakarta is looking forward to the greater prosperity (in terms of investment, trade and tourists) that the agreement will mean for the two Indonesian islands, Batam and Bintan, whose development plans are managed by Singapore.

As for Aziz’s charge of allies being rewarded, that is what politics is all about as the first Gulf War proved. Even India benefited then in terms of loans and debt-rescheduling, thanks to Chandra Shekhar’s decision to allow overflight and airport facilities to the American air force. Of course, Singapore’s prime minister, Goh Chok Tong, denies that his stand on the war had anything to do with the FTA. That, too, is understandable statecraft. But it is no accident that Singapore, Israel and the stoutly pro-Western Hashemite kingdom of Jordan are the only countries in Asia to be so honoured.

Politics alone explains Bush’s new offer of similar arrangements with the rest of the region, though the reason he gives is that west Asians “deserve to be able to participate in the economic prosperity that has been experienced in many other parts of the world.” Despite oil, many of west Asia’s 22 countries are desperately poor. Several are not members of the World Trade Organization. Their share of world trade has declined since the Eighties from 13.5 per cent to less than 4 per cent. Forty years ago, Arab productivity was 32 per cent of north America’s level; it had fallen by 1990 to 19 per cent. Finland’s 5.5 million people produce more than 300 million Arabs. Illiteracy is higher than the international average. Foreign direct investment, both in value and as a percentage of gross domestic product, is less than half the global average.

The carrot dangled before them is that Jordan’s trade with the US spiralled 80 times from $500,000 to $40 million within four or five years of the FTA. The pact also created 40,000 new jobs. Despite these statistics, Jordan remains one of the poorest countries in west Asia, its half-English half-Hashemite monarch still unable to integrate Bedouins and Palestinians in a single nation. The conservative and also staunchly pro-Western kingdom of Morocco, which has lately suffered al Qaida attacks and has thus become even more entitled to marks of American favour, is likely to have an FTA by the end of the year.

Egypt and Bahrain, both status quo regimes, will probably be next. Naturally, Saudi Arabia is clamouring for inclusion. It is west Asia’s most vulnerable country. It is the home of most of the attackers of the New York Twin Towers. Many highly-placed Saudis are suspected of secretly funding the terrorists. Saudi rage is directed as much at the US as at its own royal family.

Let it not be thought, however, that FTAs are only for America’s poodles. Shades of Ronald Reagan’s strategy of courting — “co-opting” was the term used — countries like India which had close ties with the Soviet Union, Bush says that even Iran, Syria and Libya may join. There’s a price tag, of course. Candidates must denounce terrorism. They must not oppose Israel. They must introduce economic reform and guarantee free entry to American commodities and corporations. Finally, they must join the WTO.

Not many west Asians have jumped at the offer. Economic pragmatism is not a priority for the oligarchic and autocratic regimes that are America’s best friends in the region. The Saudi suicide blasts are another grim reminder that many ruling elites are at war with their own people. With strong Islamic roots, west Asians are less enamoured of the American way of life than southeast or south Asians. Finally, the stipulations regarding terrorism and Israel are bound to raise hackles among Arabs, 38 per cent of whom are aged under 14. This youth bulge makes for militancy. Even those who deplore violence see the martyrdom of suicide bombings as understandable resistance to foreign occupation. They see Bush’s offer as an extension of his strategy of marginalizing Yasser Arafat and forcing a complaisant prime minister on the Palestinians, while arming, funding, training and militarily and diplomatically supporting Israel to continue its oppression.

Bush’s “road map” is not seen as being any different from the Oslo process. Nevertheless, the Palestinians have accepted it, while the Israelis have not. No Arab expects Ariel Sharon’s hardline government ever to make voluntary concessions in Jerusalem or to dismantle the Jewish settlements in the West Bank and surrender occupied territory that the Israelis call Judea and Samaria and to which they claim a sacred Biblical right.

Those Arab rulers who clamber aboard the bandwagon should remember the bloodbath that liquidated Iraq’s Hashemite monarchy in 1958. It could be repeated in other west Asian kingdoms that are so taken in by American blandishments that they fail to respond to the grassroots urges of Arab society.

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