The Middle East: Oil For Peace

THE MIDDLE OF a war is perhaps the wrong time to contemplate the future of a region. The outcome of the present fighting will surely be an Israeli victory at great cost in men and material. As hostilities subside, an opportunity will arise for international involvement in the Middle East beyond that of arms selling.

Oil is the medium through which the developed world views the Middle East conflict. Some of the oil producing countries have indicated previously that they have no incentive to increase their output of petroleum. Yesterday, the Organization of Petroleum Export Countries, which includes all oil producers and not only the Arabs, unilaterally raised the oil price by seventeen percent. Saudi Arabia has indicated that it will reduce its oil production in retaliation for United States support for Israel. The Arabs have been tiring of the large amounts of devalued dollars they were accumulating from oil sales, and the steps that they have new taken should come as no surprise.

A study published in June by the Oil Committee of the Organization for Economic Cooperation and Development (OECD), a United Nations agency including the most highly developed non-communist nations, reports that the Middle East has two-thirds of all world oil reserves and provides twenty-nine percent of the present supply. (The study, Oil: the Present Situation and Future Prospects, is available for $6.50 from the OECD Publications Office, 1750 Pennsylvania Ave., N.W., Washington, D.C. 20006.)

The demand for oil in the OECD countries was 1573 million tons in 1970 and will increase to 2788 million tons by 1980. The OECD estimates that only thirty percent of additional demand for oil will be provided by indigenous sources. As a result, oil imports will become increasingly important to the developed countries.

Japan is more dependent than any other country on foreign oil. How does Japan hope to safeguard her oil supply? In an article last spring, Masao Sakisaka, president of the Institute of Energy Economics in Tokyo, advocated "package deals" as an answer to Japan's oil problem:

Japan can offer capital goods and technology for industrialization and aid in the development of markets, in social development projects and other spheres collectively. This in turn will help secure the supply of oil in the Asia-Pacific region. For Japan, the package deal will help further bilateral relations and mutual understanding with producing countries. When this is achieved, Japan's voice should carry more weight in international meetings of states. The package deal is promoted not only through the participation of Western oil firms and the nationalized firms of developing countries but also through consultation with consuming nations.

Sakisaka's proposal recognizes that the consuming countries cannot hope to safeguard oil supplies unless they recognize "the producing nations' historical evolution toward economic progress and social modernization." The Middle Eastern producers are now less interested in investing in foreign money markets than in developing their own economies in anticipation of the day when oil supplies are depleted or an alternative energy source developed.

ALTHOUGH IT HAS played an important role in the diplomatic maneuvering before and after the outbreak of the present conflict, oil is not the chief bone of contention between the Israelis and the Arabs. The Egyptians and the Syrians are demanding the return of territories captured by Israel in June 1967 and Israeli recognition of the Palestinian right to self-determination. The Palestinians seek to recover their former homeland, part of which is now the state of Israel.

It is difficult for the writer (who is pro-Israeli) to analyze the Arab demands objectively. Israel will eventually have to return much of the Arab territory conquered in 1967. The Israelis insist that they will agree only to a territorial arrangement which leaves them with secure boundaries, secure at least in the geographical sense. The only real security for Israel will come from normalized economic and political relations with the Arab countries. If the Arabs are ready to live in peace with Israel, then the question of negotiating boundaries will become secondary.

The Palestinian problem is even more difficult to contend with. The Israelis claim that permitting one and a half million Palestinians to return to an Israel with pre-June 1967 borders would dilute the predominantly Jewish character of the population. In his book My Country, Israeli Foreign Minister Abba Eban notes that if Israel maintained her post-1967 borders until 1990, Arabs would constitute forty per cent of the total population. The Israelis will have to reach a compromise with the Arab element in their country. The abolition of the special military government which oversaw Arab affairs was a first step in that direction. The Israelis will have to take other steps, such as permitting some of the exiled Palestinians to return in installments. It would be unrealistic to expect Israel to welcome the Palestinian leaders Yasir Arafat and George Habash with open arms.

The course of negotiations between the Arabs and Israelis would be long and perilous. The international community could do at least two things to spur local peace efforts: stop the sale and delivery of military equipment to the Middle Eastern nations and initiate an effort to assist these countries in economic development.