Not Just Another Recession
Why the Global Economy May Never Be the Same
For most of 1989 the Middle East languished outside the mainstream of global change. Stubbornly wedded to timeworn arguments about primordial conflicts, the region increasingly seemed a backwater of intellectual ossification and political stagnation. Toward the end of the year there were some tentative signs that Middle Eastern actors might yet transcend their pasts, but those changes were slow, hesitant and easily reversible. The Middle East remained a challenge to the rest of the world, but it was also in danger of becoming a mere bore.
Nothing better symbolizes the Middle East's declining salience in world affairs than the contrast between the regional landscape awaiting President George Bush in January 1989 and that which eight years earlier had confronted his predecessor.
When Ronald Reagan took office in 1981, attention was riveted on two crises: a massive Soviet counterinsurgency war in Afghanistan, which many Western analysts interpreted as the first stage of an aggressive Soviet strategy aimed at the Persian Gulf, and the Iran-Iraq War, which had just broken out and which threatened to destabilize the major source of the world's oil exports, and perhaps presage the spread of revolutionary Islam throughout the Middle East.
By the time George Bush embarked on his presidency, the Soviet Union had suffered an embarrassing defeat and virtually withdrawn from Afghanistan. The new Soviet leadership was actively promoting the idea of cooperative superpower efforts to resolve regional conflicts. Those developments not only signified the diminution of any direct Soviet military threat to the Middle East but also foreshadowed a general Soviet retrenchment throughout the Third World.
Meanwhile, events had exposed Iran's inability to impose its revolutionary vision on Iraq, much less on the rest of the Islamic world. Six months before Bush's inauguration, Iran had agreed to a cease-fire on terms previously described as totally unacceptable, and it had begun to experiment with postrevolutionary reconstruction and normalization of foreign relations. Those actions were tantamount to defeat in the war and the successful containment of the Iranian threat to the conservative Arab oil-producing states on the western side of the Persian Gulf.
Local instability, of course, was as pervasive as ever. Even so there was little to portend a serious disruption in the flow of oil or an imminent regional war implicating the superpowers. In the absence of such storm warnings on the strategic horizon, there was no clear incentive for aggressive American involvement in the Middle East and no obvious penalty for passivity. It is therefore not at all surprising that the initial inclination of the Bush Administration was to minimize its investment of effort and political capital in the area.
American circumspection was most evident in the Arab-Israeli conflict, whose conceptual parameters remained unchanged even as the protagonists stumbled on through what is wistfully termed "the peace process." Curiously, developments in that process were stimulated and sustained by the protagonists' expectation of genuine American interest and involvement in moving the process forward.
The grounds for such expectations were not at all clear. It is true that Bush began with an important diplomatic inheritance-Reagan's decision in December 1988 to enter into a "substantive dialogue" with the Palestine Liberation Organization. That decision undoubtedly constituted a significant milepost in U.S. policy, but it also appears to have been an isolated measure in response to statements by PLO Chairman Yasir Arafat that met longstanding American terms for such contacts. While Bush was obviously involved in the decision and resisted subsequent pressures to break off the U.S.-PLO dialogue, there was little to suggest that it formed an integral element of any coherent U.S. strategy or vision for the future. Nor was there anything in his election campaign or in his early presidential declarations to indicate that the new president felt a pressing need to move aggressively on Middle Eastern issues. On the contrary, the slow pace of U.S. appointments to the Middle East and the identity of those appointed reflected a view of the area that could be fairly summarized as "cautious continuity." Secretary of State James Baker defended the merits of "a more reasoned and measured approach," and Bush, when asked about Soviet Foreign Minister Eduard Shevardnadze's February 1989 tour through the region, pronounced himself unconcerned with the prospect of the Soviet Union seizing the initiative. Finally, the comprehensive foreign policy review undertaken by the new administration appears to have left the Middle East fairly low down on any list of priorities.1
Arabs and Israelis, however, found it difficult to take seriously the possibility that the United States might not be consumed with interest and intensely engaged in their problems. Captivated by the image of American power and ultimate willingness to use it, they felt compelled to undertake some actions themselves. Their actions were not necessarily intended to facilitate negotiations with adversaries; both sides believed that they could best promote their own objectives by persuading the American public and government of the rectitude of their respective causes. Even if Palestinians and Israelis were only responding preemptively to American activism that was not really planned, the effect was to create opportunities for progress that U.S. leaders could not easily resist. Thus, the United States was drawn into a magnetic field of diplomacy that often left local protagonists feeling distinctly uneasy about the implications of their own actions. In short, expectations about American policy became self-fulfilling prophecies that kept the engine of the peace process going; the problem was getting out of first gear.
Not surprisingly, it was the Palestinians who displayed the most urgent interest in doing so. The intifadeh, the uprising in the Israeli-occupied West Bank and Gaza, was now more than a year old and already institutionalized. It had not yet shaken Israeli will or ability to remain in control of the territories, and declining media interest cast doubt on its continuing political utility. Israel's suppressive measures, meanwhile, along with self-imposed disruptions and the failure of Arab countries to honor their pledges of financial assistance, were taking a mounting toll. For the most part, the residents of the territories remained willing to defy the Israeli authorities and pay the price. But as their frustration level rose, so did signs of disunity and undiscipline, especially the spread of internecine violence to pursue factional disputes, punish "collaborators" and other violators of public virtue, and even to settle private scores or extort money under the cover of national resistance.
The political concessions made by Arafat at the end of 1988-affirming the principle of partition, accepting the existence of the state of Israel and renouncing terrorism-had not produced the desired political payoff: Palestinian independence in at least part of the old British Mandate area of Palestine. Support for that objective was forthcoming, and had been for a long time, but not from the parties that mattered most. The Israeli government remained adamantly opposed to the idea of a Palestinian state and rejected any direct dealings with the PLO, regardless of what Arafat did or did not say, and the United States stressed not only that it did not endorse Palestinian statehood but that it refused even to discuss the substance of a final-status agreement.
As a result, even Arafat's supporters expressed impatience with the political strategy, and his critics demanded immediate resumption of the "armed struggle" against Israel. The PLO, however, did not really have a viable military option. Nor were veiled threats to escalate the intifadeh very credible; although weapons were available in the territories, hints that a signal from Tunis could unleash a vast, unutilized capacity for armed revolt simply did not ring true. The potential for violence stemming from personal desperation, bureaucratic calculation or ideological passion remained, but any reasoned analysis indicated that diplomacy was still the least unpromising of all the unpromising Palestinian options.
Arafat, who had always been an indefatigable traveler, now became more peripatetic than ever, using every opportunity to restate the enormity of his concessions, the reasonableness of his demands and the sincerity of his commitment to peace. During a state visit to France at the beginning of May, he used the French word caduque, outworn or obsolete, to describe the Palestine National Charter, which rejected the principle of partition and called for the destruction of Israel. Arafat by himself was unable to sustain an effective diplomatic campaign in the United States and he continued to rely on help from Arab supporters, especially President Hosni Mubarak of Egypt. Mubarak's mission was to press the Bush Administration to become more actively involved in the peace process-which was universally understood (except, perhaps, by Israeli leaders who made similar appeals) to mean more vigorously critical of Israeli positions.
What Mubarak desired, of course, was precisely what Israeli Prime Minister Yitzhak Shamir feared. Israeli leaders were obviously anxious that the new American president would not be as sympathetic to Israeli policies as was his predecessor. During an April meeting with Mubarak, Bush did agree that Egypt and the United States shared a number of goals: the importance of Israeli security, the end of Israeli occupation of the territories, and the achievement of Palestinian political rights.2 There was nothing new, however, in that posture. What most concerned Israeli leaders was the prospect that Bush might accept the longstanding Arab demand for an international conference on the Arab-Israeli conflict or apply even cruder pressure. The mere fact that exhaustive analyses of the new administration failed to turn up any evidence pointing to such a change was not enough to reassure decision-makers in Jerusalem. From the beginning of 1989, the prevailing view among politicians and pundits was that Israel had better come up with something during Shamir's April meeting with Bush if Israel wanted to buy time and avoid American pressure. As a result, Shamir produced a four-point plan focusing on elections in the West Bank and Gaza.
In May Shamir's four points were reworked into a 20-point government initiative that provided for several longstanding Palestinian requirements, including direct talks with a distinct Palestinian negotiating partner. However the initiative also restated Israel's traditional rejection of any explicit PLO involvement in the peace process and of any prior linkage between an interim settlement, based on Palestinian self-rule in the territories, and a permanent settlement. Though it avoided any reference to the issue of territorial claims, the initiative reiterated Israel's determination to oppose the establishment of an independent Palestinian state, arguing instead that the objective of the process was a peace treaty between Israel and Jordan.
Distracted by Shamir's presumed motive-to impress Americans-the Palestinians dwelt exclusively on the flaws in his proposal and dismissed it as "warmed-over Camp David," ignoring the dynamic that might be stimulated if they themselves were to respond positively. For the rest of 1989, the diplomatic record consisted of arguments about ostensibly procedural questions that actually involved profound substantive issues. The most intractable of those questions were:
-would preparatory discussions deal with anything beyond the modalities of elections (i.e., what was to be the link, if any, between an interim agreement and a permanent settlement);
-would East Jerusalem residents participate in the negotiations and elections (i.e., is East Jerusalem part of the West Bank or of Israel);
-aside from residents of the West Bank and Gaza, which Palestinians if any would take part in an Israeli-Palestinian dialogue to prepare the elections (i.e., how visible a role would the PLO play in Israeli-Palestinian negotiations)?
Given the political realities on the ground, it was sometimes difficult to understand the intensity of the argument, especially about the PLO's explicit involvement. After all, years of searching had failed to turn up a more congenial alternative. No Palestinians had been found who were willing to settle for less than what the PLO now accepted, and the only challenge to its authority came from nationalist hard-liners or religious fundamentalists who rejected even that. Israel's determination to exclude the PLO was often explained by the fact that the aspirations of the "outsiders" who form the PLO's major constituency are focused on Israel proper. But even West Bank and Gaza "insiders" (almost half of whom are themselves 1948 refugees or their descendants) insisted that they would ultimately settle for nothing less than a state and that the PLO, which officially demanded nothing more, was their only legitimate representative. Thus, pre- or post-election negotiations about a settlement could not succeed or even take place without the PLO's consent, and it seemed immaterial whether this consent was formal or merely implied. Furthermore Israel and the PLO were already engaged in a negotiation of sorts through their parallel discussions with third parties about the same issues.
By the same token, it was not altogether clear why the PLO remained so adamantly insistent on an explicit role from the very outset. If the PLO was truly confident that its preferences would be faithfully reflected by an elected Palestinian delegation, it could have endorsed a useful fiction and removed a major obstacle to progress, without sacrificing any real influence on events. Its refusal to do so suggested that the PLO's real concerns might be institutional: Palestinians elected in the territories, even though nominally loyal to the PLO, might gain sufficient legitimacy to challenge the preeminent status of the PLO leadership in Tunis. It was also possible that elections in the occupied territories would reveal widespread identification with rejectionist forces; the most radical Syrian-sponsored terrorist factions may be of marginal importance, but the Islamic movement has become a genuine Palestinian phenomenon, and an unexpectedly strong showing in elections would discredit the entire basis of the PLO's peace offensive. Such considerations may have explained the desire of PLO supporters to bypass elections entirely and turn a preparatory Israeli-Palestinian dialogue into a full-fledged negotiating forum.
But whatever the reasons for their postures, neither the Israeli nor PLO leaders were inclined to give much ground. Nor did domestic considerations push them in that direction. On the Palestinian side, pragmatic elements, especially from within the territories, wanted to cultivate American and Israeli opinion and make possible some political advance that could ease, if not altogether eliminate, the pressing double burden of occupation and intifadeh. By the end of the year, over 150 Palestinians had died at the hands of other Palestinians and there was growing concern that the uprising might degenerate into mere anomie. Nevertheless, the intifadeh could not be fine-tuned according to current policy needs. No one wanted to turn it off without some tangible progress toward statehood, lest it prove impossible to turn it back on again if a stalemate developed a few years later. Moreover nationalist and religious forces, even those within the PLO, were highly critical of the concessions Arafat had already made, and they strongly opposed any direct dialogue with Israel, much less negotiations and/or elections on Israel's terms.
In Israel, Shamir faced demands for greater flexibility from within what is euphemistically called the "Government of National Unity," but his coalition partners in the Labor Party lacked both the strength to replace him and the will to go into opposition. More worrisome was a counteroffensive launched by hard-liners within his own Likud Party, who believed that consequences were more important than motives. Those forces, led by Trade Minister Ariel Sharon, took very seriously the dynamic of which Palestinians were so contemptuous, namely, that the initiative was the first step on a slippery slope leading inexorably to a PLO-dominated Palestinian state. In July the group persuaded the Likud Central Committee to adopt some highly constrictive guidelines. While unable to abort the initiative entirely, they did embarrass the prime minister and provided Shamir a further incentive, if any were needed, not to deviate from the plan as originally formulated. Furthermore the spread of the intifadeh over the Green Line, in the form of violent attacks on Jews and Jewish property within Israel proper, appeared to be hardening overall Israeli public opinion.
It was readily apparent that Israel and the PLO alone could not bridge the gap separating them. Although it often seemed as though the entire world was volunteering to help, the main burden was assumed by Egypt and the United States. About a month after the Israeli cabinet decision, Mubarak suggested ten conditions that might encourage the PLO to signal its approval of elections. Mubarak did not specifically mention either the PLO or a Palestinian state, but he did stipulate that preparations for the elections be made by a joint Israeli-Palestinian committee. He also required the participation of East Jerusalem residents as voters and candidates, the commitment of Israel to a final-status agreement based on "territory for peace," and a prohibition on further Israeli settlement in the occupied territories. When Labor leaders proposed cabinet acceptance of Mubarak's plan in early October, the motion was defeated on a tie vote.
As a result, the only remaining life-support system for the peace process was direct American involvement. Secretary of State Baker's speech to the American Israel Public Affairs Committee in May 1989 had been widely interpreted as evidence that the United States might be distancing itself from Israeli positions. In fact, a closer reading of the text revealed that it was fully consistent with long-standing American attitudes, and State Department officials spent most of the summer pressing for PLO endorsement of the Shamir initiative, both in the Tunis dialogue and indirectly in discussions with senior Soviet diplomats. Despite the thrust of its activities, the United States resisted the impulse to stake out its own position, preferring instead to stay in the wings and urge others to take the leading roles. Only in October did the United States reluctantly move to center stage.
Even then, the result was not an American design, but rather a set of ambiguities intended to facilitate what Egypt had been unable to accomplish. Since Baker's five points aimed at obscuring the same fundamental disagreements about the negotiating agenda and the role of the PLO, it is not surprising that neither the Israeli government nor the PLO showed much enthusiasm. Yet, the intervention bore too impressive a cachet to permit a categorical rejection. Israel extracted two cosmetic changes before finally accepting the proposal in November, "on the assumption" that U.S. assurances of six Israeli requirements would be forthcoming, the most important being that "Israel will not negotiate with the PLO." Though not formally invited to respond, the PLO sought precisely the opposite assurances through Egyptian intermediaries. In early December, Egypt finally communicated its own willingness to proceed on the basis of the five points, thus clearing the way for a preliminary meeting of American, Egyptian and Israeli foreign ministers. Nonetheless, it was still not clear what conditions, if any, were attached to Egypt's acceptance and whether or not its position was fully coordinated with the PLO.
In short, the United States still had not achieved what was, by definition, a very elusive objective: PLO participation in a negotiating process that could be simultaneously affirmed by the PLO and denied by the Israeli government. The experience of 1989 illustrates once again the basic conundrum of Israeli-Palestinian peacemaking: No one, including the United States, can overcome the obstacles to peace except Israelis and Palestinians themselves, but only the United States can give them the resolve to do so. Despite dissatisfaction on both sides with elements of American policy, Israelis and Palestinians still view the United States as the only real superpower; voices on both sides call for its continuous, active involvement. Global changes may mean that such involvement is no longer an urgent strategic necessity for the United States, but the political and moral imperative remains as valid as ever.
The glacial pace of the Arab-Israeli peace process found parallels in the search for resolutions of both the Lebanese civil war and the Iran-Iraq conflict. In the Persian Gulf political stalemate meant only an uneasy truce, but in Lebanon the result was truly catastrophic.
The specific direction of Lebanese developments in 1989 flowed from the failure of the Lebanese parliament to elect a successor to President Amin Gemayel. Just before he left office in September 1988, Gemayel appointed Army Commander General Michel Aoun as interim prime minister, flouting the convention which reserved that office to a Sunni Muslim. After Aoun moved into the presidential palace in Baabda, two Lebanese governments existed in Beirut, neither of which functioned elsewhere in the country. Aoun declared that his mission was to reunify Lebanon by liberating it from foreign occupation, and his primary target was the Syrian army, which controlled over half of Lebanon's territory.
Aoun lacked the military capacity to expel the Syrian forces; his only conceivable course of action was to weaken Syria's local allies and provoke Arab and/or international intervention in favor of Syrian withdrawal. At the beginning of March, Aoun therefore moved to close down the private ports of Muslim militias south of Beirut. Beyond their symbolic value, these ports generated huge revenues from the smuggling of drugs grown and processed in the Bekaa Valley. Aoun's action set off a new round of fighting in Beirut so vicious that the apocalypse, so long predicted, seemed finally to have arrived.
During the next six months, the destruction of lives and property, far from serving any discernible political objectives, seemed driven by a logic of its own. Exchanges of artillery and rocket fire killed over 800 people and forced hundreds of thousands from both sides of Beirut's Green Line to seek shelter in the comparative safety of the countryside. Calls by Arab League foreign ministers for a cease-fire went unheeded, as did an appeal by Pope John Paul II to stop the "genocide" in Lebanon.
The Syrian contingent in Lebanon played no direct role in the combat, but Syria provided material and logistical support for Lebanese elements, including some Maronite Christians, opposed to Aoun, and it strongly resisted any concerted Arab action threatening its own presence in Lebanon. Despite Iraqi protests, the Arab summit conference held in Casablanca in May 1989 made no reference to Syria. Instead, it established a tripartite committee to consult with the various Lebanese factions and to reconvene parliament so that a new president could be elected. But only in late September did a cease-fire finally go into effect. Even then, conditions precluded any conference in Lebanon and the parliament, scarcely mindful of the irony, instead met in Saudi Arabia, a country with no parliament of its own.
These consultations produced the Ta'if agreement, which held out the first faint hope of reconciliation in many years.3 The conceptual basis of the Ta'if agreement was a commitment to the eventual elimination of confessionalism in the allocation of state offices and privileges. Until then, power would be slightly redistributed in favor of Muslims. The charter did not mention Syrian withdrawal from Lebanon, but it did stipulate that Syrian forces would redeploy in two years to the Bekaa Valley.
Except for its promise to end the killing, there was little in the agreement to arouse real enthusiasm. The deputies who met in Ta'if were the elderly survivors of a parliament elected 17 years before. While their proposed reforms were not trivial, they hardly reflected the radical changes in Lebanese politics and society since 1972, much less since the so-called National Pact of 1943 had been formulated. Nor did the agreement disguise the fact that Syrian predominance would continue for the foreseeable future. Still, the Druze community and most Shi'ites preferred that prospect to Maronite hegemony even if they themselves stood to gain little in the short run, while the Sunnis retained rather more than their numerical and military weight in Lebanon might indicate. Even some Maronite Christians convinced themselves that the likely alternatives-loss of all power or the total disintegration of the country-would be worse. As a result, a rump parliament was able to meet in northern Lebanon on November 5 and choose a new president, René Muawad. That action may have restored the legality of Lebanon's government, but restoration of its authority was impossible without Aoun's concurrence or elimination-and General Aoun proceeded to denounce the entire effort as a Syrian fraud.
Seventeen days after he was elected, President Muawad was blown up by a car bomb in West Beirut. Although the killers could not be identified, it was widely assumed that Muawad's assassination was Aoun's way of defying Syria, which responded by quickly reconvening parliament in territory under its direct control. Under the watchful eye of Syrian security forces, the deputies, some of whom had been flown in from Paris to ensure a quorum, chose Elias Hrawi, an obscure Maronite Christian politician, to succeed Muawad. Hrawi then announced that he intended to take his rightful place in the presidential palace in Baabda, by force if necessary, and he gave Aoun 48 hours to get out of town. Amid much publicity, Syrian troops around the Christian enclave were also reinforced. But when the ultimatum expired, Aoun was still in his bunker, shielded by thousands of civilian followers.
Despite the confrontation between General Aoun and the Syrian government, what is striking about the perpetuation of Lebanon's agony was the secondary role normally played by outside forces. Third-party intervention had originally been precipitated by internal Lebanese conflicts; it was continuously solicited by at least some Lebanese factions because of its anticipated impact on the domestic balance of power, and it was perpetuated by the political standoff. Moreover, such intervention often took the form of support for Lebanese belligerents rather than massive direct involvement in combat (though there were obvious exceptions to that generalization).
In 1989 Syrian policy remained one of ensuring paramount influence through manipulation of Lebanese divisions, rather than of direct rule through force. Iraq was inclined to back General Aoun in order to make Syria's president, Hafez al-Assad, pay for his support of Iran during the Gulf war. Nevertheless, despite Iraq's criticism of the Ta'if agreement, the flow of supplies from Baghdad was intermittent, and Iraqi leader Saddam Hussein showed no appetite for a full-fledged confrontation. Iran retained ties with the Shi'ite community through its support of Hezbollah, but while clashes between Hezbollah and the Amal Party did not end, Syrian primacy was essentially conceded at the beginning of 1989 in an agreement between the Iranian and Syrian foreign ministers. Since withdrawing the bulk of its forces in 1985, Israel has been preoccupied with its security zone in southern Lebanon and shown a studied indifference to political developments in the rest of the country. Parties further afield, including the Soviet Union, continued to urge reconciliation, but the great powers that had such prominent roles in Lebanon's history-France and the United States-now resisted urgent pleas by Aoun's supporters to intervene more aggressively. Indeed, the American ambassador pointedly left Beirut in early September, following Maronite Christian demonstrations protesting U.S. "collusion" in Syria's occupation.
Despite the continued suffering, most veteran Lebanese politicians seemed incapable of thinking about a new constitutional structure that would properly reflect the upheavals in Lebanese society. Determined to avoid anything that might recognize the de facto triumph of sectarianism and encourage de jure partition, they aimed instead at resuscitating a strong central government and focused on the necessary reforms. As a result, any negotiations inevitably became a struggle to redistribute power among communities: a zero-sum game. While a peaceful solution of that game was not inconceivable, conditions in late 1989 made the resurrection of the state of Lebanon seem more remote than ever.
Although Iran and Iraq came no closer to a political settlement of their conflict, they at least did not face the immediate prospect of renewed fighting. But while both sides continued to honor the cease-fire, there was little evidence of psychological demobilization, and political-military postures reflected an expectation that the war that ended in August 1988 would not be the last one.
Iran's acceptance of the cease-fire and the growing influence of Parliament Speaker Hojatolislam Hashemi Rafsanjani prompted much speculation that the country was entering a post-Khomeini era even before the death of the Ayatollah Ruhollah Khomeini. That prognosis was not borne out by subsequent developments. The mid-air explosion of a Pan Am airliner in December 1988 and a wave of killings at home showed that terrorism, both international and domestic, was still a tool for at least some elements in the regime. Reports soon surfaced of an intense power struggle between pragmatists favoring a relaxation in Iran's internal regime and its relations with the West and a hard core of purists determined to preserve "revolutionary values" in all matters. In February, Khomeini's exhortation to kill Salman Rushdie, author of The Satanic Verses, signaled his preference for the purist camp. The following month, his designated successor as Iran's spiritual leader, Ayatollah Hossein Ali Montazeri, resigned his post after having questioned some aspects of Iran's war policy and having expressed cautious approval of domestic liberalization.
Even Khomeini's death on June 3, 1989, did not necessarily mean the end of the Khomeini era in Iranian politics. Rafsanjani was elected president in July and managed to exclude several prominent hard-liners from his new government, but there was serious friction between Rafsanjani and a "camp of the Imam" (reportedly led by Khomeini's son, Ahmad), which was irreconcilably opposed to any deviation from revolutionary orthodoxy. In such circumstances, no one was eager to placate other countries, least of all Iraq. The major exception was the Soviet Union, and a central feature of that emerging relationship was Soviet help in rehabilitating Iran's battered armed forces.
Iraq may have suffered greater economic losses than Iran because of the war, but it enjoyed clear military superiority and had registered some significant successes in the months before the cease-fire. Hussein, though hardly eager to resume hostilities, saw no need to make concessions for the sake of a peace treaty. In response to the Iranian demand that Iraq withdraw from about 2,500 square kilometers of Iranian territory seized during the final stages of the war, Iraq claimed that it was impossible to redeploy to international boundaries until some agreement established those boundaries. In Iraq's view that required repeal of the 1975 Algiers agreement, which placed the border at the thalweg (line of deepest flow) of the Shatt-al-Arab, and Iranian recognition of Iraqi sovereignty over the entire river. Pending such an agreement, Iraq demanded that Iran permit dredging operations in the Shatt's shipping channels and carry out the repatriation of prisoners of war.
Efforts by U.N. mediators to resolve those differences produced little more than mutual accusations of bad faith, and although relations between Iran and Iraq did not portend an imminent resumption of armed hostilities, they remained highly acrimonious. The most ominous aspect of the diplomatic exchange was that Iraq's demand on the Shatt was precisely the war aim it had set for itself in 1980.
Mindful of the impact of international isolation on Iran's warmaking capacity, elements in Iran's leadership made some fitful efforts to diversify the country's foreign relations. Nevertheless ties with most states remained uneven and uneasy. A dispute with Saudi Arabia over Iranian participation in the pilgrimage to Mecca continued through 1989, and except for Syria, the rest of the Arab world remained generally supportive of Iraq's position. The "Rushdie affair" delayed a rapprochement with several European powers and further alienated a hostile American public. In any event, the normalization of ties with the United States was intimately bound up with the issue of U.S. hostages in Lebanon, with the United States insisting that the hostages must first be freed unconditionally and Iranian spokesmen arguing simultaneously that they had no influence in Lebanon and that they would only use it after the United States had demonstrated "goodwill." In fact, the United States offered in July 1989 to pay compensation for victims of the Iranian civilian aircraft shot down the year before, and President Bush agreed in November to release $567 million in frozen Iranian assets.
Nevertheless powerful forces in Iran rejected any rapprochement, not because of what the United States did but because of what it still was-the "Great Satan." During the summer, the Association of Combatant Clerics warned those Iranian leaders (presumably including Rafsanjani) who wanted to dispel political misunderstandings that the real problem was "the criminal nature of America," and they recalled Khomeini's dictum that "Iran will never stretch its hand toward the United States unless it dies."4 In short, Iran's relations with the United States and the rest of the world, including Iraq, were still contingent on the uncertain course of a revolution that, despite Khomeini's death, was still hostage to its own ideological fervor.
Elsewhere in the Middle East, some patterns and structures did begin to change. In February the creation of the Arab Cooperation Council gave economic expression to the political alignment of Egypt, Jordan and Iraq that had been gradually emerging for several years; Yemen was added as something of an afterthought. European-style integration, however, was as remote as ever; thousands of Egyptian workers fled Iraq during 1989, many of them with bitter complaints about Iraqi mistreatment and financial exploitation.
Egypt's complete rehabilitation in Arab politics was symbolized by the visit of Saudi Arabia's King Fahd to Cairo in February and Mubarak's appearance at the Casablanca summit, the first time Egypt participated in an Arab summit conference since signing the Camp David accords in 1978. Mubarak even exchanged highly publicized visits with Libyan leader Muammar Qaddafi in October, and at the end of the year Egypt and Syria agreed to restore diplomatic relations after a decade-long rift. The timing of those developments may well have been influenced by extrinsic factors, especially Soviet policies, which compounded the diplomatic isolation of Libya and Syria. Nevertheless, the changes themselves were essentially dictated by the fundamental reality of Egyptian power, to which other Arabs had begun to accommodate themselves in various ways almost as soon as they had formally excommunicated Anwar Sadat in 1978.
There were also some cautious experiments in limited democracy. In Jordan, large-scale riots in mid-April revealed popular discontent with economic recessions, corruption and martial law, and King Hussein responded by promising to hold parliamentary elections for the first time since 1967. Apart from the prohibition on political parties and some gerrymandering to favor rural districts (where relatively few Palestinians live), the November elections were virtually free of government interference; over 600 candidates competed for 80 seats, and despite Hussein's preelection homily on the virtues of religious moderation, 34 of the winners were associated with fundamentalist ideologies.
Further west, in late 1988 Algeria had also experienced a wave of riots, which were repressed with much more bloodshed than those in Jordan. The Algerian government, however, concluded that it should relax domestic controls, and though there were no democratic elections a kind of glasnost permitted greater freedom of expression and political organization. Nevertheless democratization, even of the controlled variant introduced in Jordan and Algeria, was not a region-wide phenomenon; authoritarian regimes elsewhere in the Middle East saw no purpose and faced little popular demand to share power as widely or as quickly as did rulers in most other parts of the world.
Indeed, the most noteworthy example of new thinking in the region was the Middle East policy of the decision-makers in Moscow. During 1989 the de-ideologization of Soviet policy was manifested in several ways, including the first visit to Jordan by a Soviet foreign minister, the consolidation of ties with Egypt, and the establishment of contacts with previously shunned elements in Lebanon such as General Aoun and Maronite patriarch Butros Sfeir. The most important change, however, was a dramatic improvement in relations with the major non-Arab states in the region, Iran and Israel, and a corresponding coolness in ties with traditionally close Soviet allies in the Arab world.
Soviet leaders had tried to cultivate Iranian goodwill since the overthrow of the shah, usually without much success. In 1988 the Soviet refusal to endorse an arms embargo and the decision to withdraw from Afghanistan apparently removed the major source of Iranian suspicion. In January 1989 Khomeini sent a highly publicized letter to President Mikhail Gorbachev, urging him to acknowledge the failure of communism and to undertake a serious study of Islam. Whatever its spiritual impact may have been, that letter paved the way for a series of high-level contacts, including Shevardnadze's meeting with Khomeini in February, the first audience granted by the Iranian leader to any foreign minister. There was also a steady expansion of commercial and technological relations, culminating at the end of June in Rafsanjani's visit to Moscow, where he negotiated a package of economic cooperation agreements valued at $15 billion and secured a Soviet commitment to supply weapons and assistance for Iranian military industries.
Not surprisingly, such developments were greeted with dismay in Baghdad, where strident criticism of Soviet behavior began to appear in the media. Soviet officials stressed that the rapprochement with Iran need not be at the expense of existing ties with Iraq. In fact, relations with both Persian Gulf powers were fully consistent with the "universality" principle in the Soviet Union's new thinking, particularly if the tensions between regional adversaries did not escalate into all-out war. Nevertheless, the fact that the Soviet Union had positioned itself in some ill-defined "middle ground" was a source of great concern to Iraq.
In the Arab-Israeli arena, the Soviet realignment did not produce quite the same result, but the rapprochement with Israel was in many ways even more dramatic, if only because the distance traveled was so much greater. Soviet spokesmen continued to insist that formal diplomatic ties could not be resumed until Israel agreed to negotiate with the PLO, either directly or in the framework of an international conference. But in every other respect, Soviet-Israeli relations were normalized in 1989: High-level political consultations took place on a regular basis and several Israeli ministers were invited to Moscow; numerous economic and technological agreements were signed; Jewish immigration to Israel increased significantly; tourists traveled back and forth in growing numbers; and exchanges of academic, cultural and sports delegations became so routine that they hardly attracted any notice. Soviet policy in the past came under increasing domestic criticism as one-sided and stolid, and the Soviet media began to provide more sympathetic coverage of Israel, to the point where Arab journalists in Moscow felt obliged to lodge a public protest.
The Soviet Union continued to support a settlement involving the creation of a Palestinian state, and it continued to insist that such a settlement could be reached through negotiations with the PLO, but Soviet diplomacy increasingly took account of Israeli concerns. Abandoning the ritual condemnations of the past, Soviet officials expressed a desire to discuss Israeli counterproposals while ending their knee-jerk endorsement of every PLO position. In May they voted against the PLO's admission to the World Health Organization; in October they abstained on the Arab motion to reject Israel's credentials in the U.N. General Assembly; and in November they refused to support the upgrading of the PLO's status at the United Nations to that of observer-state.
Policy differences also strained relations with Syria, the most important Soviet ally in the Middle East over the previous decade. On several occasions, Soviet officials made it clear that they would not support Syria's quest for "strategic parity," that arms would be supplied selectively and on essentially commercial terms, that the conflict could only be resolved by political means (which meant accommodating Israeli security requirements), and that the Soviet Union endorsed the measures taken by President Assad's arch rival, Arafat. Syrian media protested (perhaps too much) that the Soviet Union remained an unshakable ally. In fact, visits by Soviet high-level military personnel (including Defense Minister Dmitri Yazov) indicated that policy differences did not mean a crisis in Soviet-Syrian relations. Nevertheless, there were persistent rumors that Assad was distinctly uncomfortable with the Soviet new thinking in the Middle East; a planned visit to Moscow was postponed in October and had not taken place by the end of the year.
All of these changes reflected a Soviet conviction that past support of militarized, radical regimes had been misguided, expensive and counterproductive. New thinking, of course, did not imply a retreat into isolationism; on the contrary, Soviet diplomacy became even more energetic. Rather than treating regional conflicts, here and elsewhere, as an opportunity to enhance Soviet influence, the Soviet leadership had apparently concluded that those conflicts were dangerous irritants on the Soviet-American agenda, which should be removed through political settlement.
There were, of course, serious limits on the Soviet ability to contribute to such an outcome. As a resource-constrained power, the Soviet Union had little to offer in the way of economic or technological inducements; its leverage was primarily negative, by withholding assistance to local parties trying to subvert conflict resolution either through violence or rigid insistence on "unrealistic" conditions. Indeed, for all of its diplomatic activism, the Soviet Union was increasingly viewed by many in the region through an American prism, i.e., as an instrument of indirect pressure on the "real" superpower-the United States.5 But even in that context, the Soviet new thinking created at least a basis for productive Soviet-American cooperation on the Middle East.
Ultimately, of course, the resolution of conflicts in the Middle East remained the responsibility of the local belligerents; there were no imaginable circumstances in which the superpowers, alone or together, could impose (much less sustain) a political settlement unacceptable to regional actors. At the same time developments in 1989 confirmed that those actors lacked the will, the power or the imagination to settle their conflicts without outside help. As long as those conflicts persist, it is virtually impossible to address structural and socio-economic problems of potentially catastrophic proportions.
In many Middle Eastern countries, population growth rates constantly intensify the pressure on already inadequate labor markets, urban infrastructures and even water supplies. Barring some reversal of those trends, the riots in Algeria and Jordan and the contretemps between Iraq and Egypt may be harbingers of a general, sustained, vicious resource competition within and among states increasingly armed with long-range delivery systems and unconventional weapons of mass destruction. Moreover, if the suffering in that competition makes the allure of secular or religious radicalism irresistible, then the environment for foreign investment, already uncongenial, will become repulsive, and the prospects for democracy will disappear.
Awareness of those problems is already keen. Nevertheless old thinking about old conflicts continues to divert attention and resources and hamper regional cooperation and integration, thus crippling any chance of dealing effectively with the human condition in the Middle East. Even if conflicts in the region do not threaten the peace of the world, there is therefore reason enough for the United States, still the foremost world power, to help the Middle East embrace the logic of global change.
2 United States Information Service, Official Text, April 4, 1989, p. 2.
3 The text of the National Reconciliation Agreement is printed in Al-Nahar, Beirut, Oct. 23, 1989.
4 Islamic Republic News Agency, cited in BBC, Survey of World Broadcasts, Aug. 28, 1989, p. A/4.
5 See, for example, Al-Bayader al-Siyassi, which advocates a concerted Arab diplomatic campaign aimed at getting the Soviet Union, China, France and Britain to influence the American government. Al-Bayader al-Siyassi, Jerusalem, Sept. 30, 1989.