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Taking a stand

Al-Ahram Weekly Online
11 - 17 April 2002
Issue No.581

A boycott of Israel? The US, too? And by whom? Government, business or consumers? And would it work? Al-Ahram Weekly looks at the debates.

When Prime Minister Atef Ebeid recently announced that the Egyptian government had decided to "cut off all communications with Israel, except those benefiting the peace process," no one in the business community was quite sure what the decision entailed.

For some business people, the decision was read as a signal from the government that the private sector should cut off any exchange with Israel, which included cooperation in the fields of agriculture, textiles, oil and tourism.

But those who actually do business with Israel, when contacted by the Weekly, dismissed the decision as "a political ploy, which has nothing to do with reality." They also said they had received no official word that they should stop their contact with Israel.

"What do you mean, a boycott?" asked one. "Are we playing some sort of game here? There are people's livelihoods at stake. We started business with Israel on the basis of a green light from the government. We cannot stop at the push of a button."

The official position on an economic boycott has been intentionally ambiguous. Official sources told the Weekly that a boycott of Israeli, as well as American products is "a decision made at the popular level, and does not have anything to do with official decisions." The government, continues the argument, cannot impose on private enterprises who to do business with.

The Egyptian Federation of Chambers of Commerce (EFCC), however, has renewed an 18- month-old decision to boycott Israeli products.

"The decision, taken by the EFCC board, which represents 3.5 million Egyptian traders, has been in effect since the beginning of the Intifada in September 2000, but the EFCC has decided to renew it," said EFCC Chairman Khaled Abu Ismail.

However, the EFCC realises it has no means of enforcing the decision. Ismail said that the boycott decision is "not obligatory" for traders, counting, instead, on consumers. "Those who still deal with Israel will lose, since their consumers will refuse to buy any Israeli products," he asserted.

In the business sector, as well as among the wider public, feelings of anger at Israel are inseparable from resentment towards the US's apparent condoning of its policies.

According to Ismail, the Egyptian business community, headed by the EFCC, the Federation of Egyptian Industries and other business associations presented a statement to the US ambassador to Cairo in which they expressed their concern about "US double standards" in dealing with current events in the Middle East.

The businessmen also expressed their fear that US support for Israel "might lead to a negative impact on its economic cooperation with Egypt."

Only time will show the depth of the initiative taken by Egyptian businessmen to boycott Israeli products and stop all forms of normalisation with Israel, says Wagih Shindy, an international business and legal expert, and minister of investment and tourism in the 1980s. "In this case, trade between both countries should be revised on a quarterly basis to see whether or not the volume of trading is dwindling. If not, the initiative will prove nothing but mere clichés," said Shindy.

Shindy argues that Arab states should have an influential economic role to play in stemming Israel's attempts to grow into the most influential country in the region.

"What have Arabs done to grow into one integrated, influential economic bloc? Nothing," said Shindy. "Unfortunately, each of the Arab countries is living in its isolated island. The only way out of the dilemma is for Arabs to define a set of common strategic and economic goals and to put aside their political issues," he said.

While Shindy believes that action should be taken by Arab governments, Gouda Abdel- Khaliq, professor of economics at Cairo University and chairman of the economic affairs committee of the leftist Tagammu Party, confirms that now is the time for the general public to assert its will.

"If the Egyptian government is tied up by the peace agreement it signed with Israel, the people, on the other hand, have signed no accords and they can freely and effectively boycott both Israeli and American products in different ways," said Abdel-Khaliq.

Abdel-Khaliq provides many suggestions for an effective boycott. "Imagine if workers at Egyptian airports refuse to provide any services for El-Al planes, for example, or if workers in ports refrain from unloading containers that carry American or Israeli products. This, I believe, will be a stronger message to both countries than all condemnation remarks on the part of the government," he said.

In this phase, it is the business associations, trade unions and political parties that have a dramatic role to play to keep up the momentum. "Talking in my capacity as a member of an opposition party, these entities remain widely absent," said Abdel-Khaliq.

But Abdel-Khaliq praised action taken by the Syndicate of Pharmacists, which, in its latest meeting last week, listed US medicines that have a local equivalent or can be imported from other countries, in an attempt to limit the import of medicine from the US.

"It is necessary to define the list of products and the networks for their distribution so that the boycott can be organised effectively," said Abdel-Khaliq. He argues that American movies should be boycotted as well as household equipment and vehicles.

"The boycott is a tool the US can hardly misinterpret. It can barely argue the eligibility of such a tool as an effective weapon," Abdel- Khaliq said. "The US has successfully used this tool an infinite number of times. It was used against the former Soviet Union, Yugoslavia and China. It is now used against North Korea, Iran, Sudan, Libya and Iraq. Unfortunately, these stances demand a high rate of awareness on the part of the majority of the people and the number of Egyptian businesses that may be harmed is high. "We cannot say that such an awareness exists, yet, but the intensity of Israeli violations in the Palestinian territories has triggered a sense of patriotic enthusiasm that has been dormant for a long time," he added.

Although Abdel-Khaliq agrees that Egyptian- US relations are important, he contends "that this is the time to reassess the terms upon which this relation is based," adding that Egypt should have a better appreciation of its role as a strategic country in the region. He also remarked that "it is humiliating for a society to grow widely dependent on the aid given by another country, Egypt has to understand that American aid is given according to strategic calculations that can hardly be achieved without Egypt's consent."

However, while Abdel-Khaliq argues that an Egyptian boycott of US products could be effective, Aviv Ezra, officer in charge of economic affairs at the Israeli Embassy in Cairo asserts that an Egyptian economic boycott of Israel is "not a tool to make a difference."

"The size of trade [between Egypt and Israel] is the equivalent of what an Israeli software company exports to the US," Ezra said.

During the period of January-September 2001, Israel imported around $15 million worth of merchandise from Egypt. This is a drop from the previous year's figure of $16 million. During that same period in 2001, Egypt imported $35 million worth of Israeli merchandise compared to $46 million during the same period in 2000, a drop of 20 per cent.

These figures exclude oil which represents the bulk of Israeli imports. Ezra puts the size of Israeli oil imports at approximately $100 million annually. A major gas deal, under which Egypt would supply a third of Israel's energy needs, came near to fruition last year but was later put on hold.

Israeli imports from Egypt include chemical products, agricultural, mineral products, as well as food, vegetables and paper products. Israel also exports to Egypt chemical products, textiles and machinery.

Israeli investments in Egypt stand at a few tens of million, in the textiles sector. Until recently there were Israeli investments in the MIDOR refinery in Egypt, but these have been pulled out.

"Business between Israeli and Egyptian business people could have been much better. It could have meant prosperity for both sides, but the business climate is not making it possible," Ezra said. "Egyptian businessmen can make a lot of money if there is greater cooperation. The level of trade is small but the potential is large."

Many Egyptian consumers, realising there are few Israeli products to boycott, have turned their anger to where they think they could most be effective: the American fast-food chains which do multi-million dollar business in Egypt. Calls to boycott the US chains have been circulated on the Internet, apparently winning support: a general tour around these outlets revealed that business was unusually quiet during the past week.

However, when contacted by the Weekly, many of the chains denied that a public boycott was affecting business. Caroline Greiss, marketing manager of McDonald's Egypt, said a slow- down could be attributed to "other factors such as seasonality, exams etc."

"We are an Egyptian joint-stock company, not involved in any political issues," Greiss said. "We are part of the community. These are Egyptian investments employing Egyptian workers. McDonald's Egypt is a supporter of the campaign to raise funds for the Children's Cancer. Those who boycott us are doing an act that will affect only Egyptians."

Hisham Fahmy, executive director of the American Chamber of Commerce in Cairo, agrees.

"They're trying to boycott Israeli products, but since there aren't many, they are going to what they think is the next best thing. Unfortunately, they are taking it out on (US) brands that exist in the Egyptian market through Egyptian investments and are operated by Egyptian workers. We need to get our voice heard, but we need a more effective way. We do not want to shoot ourselves in the foot."

But according to Shafik Gabr, head of Egypt's International Economic Forum, and a former president of the American Chamber of Commerce in Egypt, boycotting US products is not an effective way of pressuring the US to take a more pro-Palestinian stance.

"History has proven that boycotts and economic sanctions don't work," said Gabr. "If we want to have an effect, we must influence the decision-making process. We need to ask ourselves why Jewish lobbies [in the US] are more influential. This is a process that requires resources, planning, careful implementation and an understanding of the US decision-making process."

He adds: "The effect of any boycott is temporary and its execution is more emotional than practical," Gabr said. "Emotions should not overcome proper thinking."

Establishing Egyptian and Arab economic relations with Israel has always been a bumpy ride. In the early 1990s, following Egypt's example, other Arab countries overcame their reluctance to establish economic ties with Israel as the peace process unfolded. The Madrid Middle East peace conference, launched in October 1991, under the co-sponsorship of the US and Russia, opened talks between Israel and Arabs including the Palestinian Liberation Organisation (PLO). At that time, Arabs' economic boycott of Israel was showing signs of crumbling.

The establishment of a Palestinian self rule area and prospects of a more comprehensive resolution of the Arab-Israeli conflict raised hope for the emergence of a giant market of an estimated 200 million consumers, stretching from the Atlantic ocean to the Gulf.

In October 1994, senior officials, donor countries, financial institutions and representatives of the private sector met in Casablanca for the "Middle East North Africa Economic Summit" (MENA) to draw up an agenda for regional cooperation. The conference hosted business people from Saudi Arabia, Israel, Morocco, Jordan, United Arab Emirates, Kuwait, Egypt, Bahrain and Palestine plus corporate executives from more than 40 other countries. This was the first attempt at bringing Arab and Israeli businessmen together after the breakthrough in regional peace brought about by the Israeli-Palestinian Oslo agreement.

But the MENA summit, scheduled to be held in Tunis in 1998, was cancelled in the light of the deterioration of the peace process at the hands of Israeli Prime Minister Binyamin Netanyahu.

Originally, MENA was the brainchild of Israel's former prime minister, Shimon Peres, who was keen to integrate Israel's economy with those of the Arabs in an attempt to end its regional isolation.

The high expectations with which the first MENA summit was held were short-lived. In 1996, Egypt refused to host MENA at the summit level and insisted it be downgraded to a lower-level conference. Since then, all the outcomes of MENA -- a regional bank, a tourism organisation and a private sector forum -- have ceased to operate.