As the new Israeli government of Prime Minister Ehud Barak moves to re-kindle peace talks with Syria and the Palestinians, businessmen throughout the region are watching closely. The economic benefits of a lasting peace are enormous, and will affect everything from agriculture to foreign investment, and transport grids to technology transfer.
History is sometimes in the detail. As Arab and Israeli officials publicly re-launch the peace process, the most true import of that process could be revealed in a small gesture: an Israeli shopkeeper could start selling Syrian fabric; an Israeli company could seek to list its shares on the nascent Palestinian Securities Exchange; or a Lebanese freight forwarder could start representing Israeli transport firms.
Even as Ehud Barak made his opening moves on the diplomatic stage, reportedly using the occasion of King Hassan of Morocco's funeral to further international political contacts, businessmen, multilateral agencies and investors began considering how the economics of peace might impact on the region.
At stake on the official level are billions of dollars in international aid, now held up pending a peace settlement. For the Palestinians alone, a settlement could free up $3 to $5 billion in aid from Europe, Japan, the US and Arab countries.
But this is a small fraction of the monies that could flow into the region as the peace process gathers momentum. Private and public sector funds are expected to be attracted to the region's infrastructure projects, as well as particular economic sectors, especially water, power, transport and tourism. Both Lebanon and the Palestinians could expect to tap upwards of $3 billion each in expatriate funds, now banked in Cyprus, Athens, London and New York.
Beneficiaries are not limited to the five principals (Israel, Jordan, Lebanon, Syria and the Palestinian territories). Cyprus, Egypt, and Turkey also stand to reap a substantial 'peace dividend'.
Consider the potential impact on Cyprus: although the country could see a significant drop in funds on deposit in its Arab-oriented offshore banks, this would be more than offset by increased demand for Cypriot shipping, insurance, and other services.
Turkey could also draw a dual benefit: any peace agreement between Israel and Syria would help reduce Turkish-Syrian border tensions at a time when domestic unrest in the Kurdish regions of southeast Turkey is on the rise. More important, perhaps, is the tantalising prospect...