September 26, 2008
Cost of the Arab Economic Boycott on Israel
I used to think the Arab Economic Boycott was useless, as in ineffective and mostly unimplementable (laws that can’t be implemented shouldn’t exist, period). Now, I came across this research article, “The Effect of the Arab Boycott on Israel: The Automobile Market”:
Recent progress towards a comprehensive peace in the Middle East has led to a relaxation of the enforcement of the Arab economic boycott of Israel. This in turn has led to the entry of all the major Japanese and Korean automobile manufacturers into the Israeli market. In this paper, we examine the effect of the Arab economic boycott on this market. Using recent advances in estimating discrete-choice models of product differentiation, we estimate that had the boycott continued, the welfare loss per purchaser would have been approximately $1940 in 1995. This benefit can be interpreted as a peace dividend. Since approximately 113,000 new automobiles were sold in 1995, the welfare gain to consumers was more than $219 million that year.
Which makes me view it in a different light. If that was just for the automobile market, then it was definitely not stupid. Doesn’t change my opinion, which is well known in Aqoul, that Arabs should just turn their back on Israel until they can actually do something about it, meaning even in the light of this information, it shouldn’t be their top priority – but it does change the judgment on the quality of the boycott.
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Doesn't that also mean that Palestinians in Israeli occupied areas as well as Israeli Arabs, all being in a literally captive market under the same conditions -- and appreciably poorer per capita -- would have had to pay far higher proportions of their income for the same products?
Posted by: matthew hogan at September 26, 2008 12:55 PM
True, but my intuition is that unless basic goods are affected in the same way, they would be less represented in those tranches that reap "peace dividends".
You might be content to counsel for a waiting game until the Arabs (do you include Xn Arabs?) are strong enough to impose a government based on true justice on the area currently occupied by the Zionist Entity. However, there appears to be a certain high level of impatience expressed by Hassan Nasrallah in this article and it’s not completely beyond the bounds of possibility that his walnut sized mind might just make a misjudgement on the right time to attack:
“No place for Israel in the Middle East?"
Jerusalem and Palestine, from the sea to the river, belong to the Palestinian people, the Arabs and the Muslims, and no one has the authority to concede a grain of earth, wall or stone from the holy land," Hizbullah Secretary-General Hassan Nasrallah said Friday evening.
Speaking in Beirut in honor of al-Quds (Jerusalem) Day, an Iranian-declared observance, Nasrallah added, "Its stones, olives and figs are sacred, and no one has the right to give it up. This land must belong to its owners, and it will return, God willing.”
And in his best Elmer Fudd speaking voice (to quote someone on Aqoul who probably thinks Nasrallah’s cute) he follows up with these words:
'Israel the enemy of Islam'
"Nasrallah added that Israel was the enemy of all Islamic states. "Israel is not only the enemy of the Palestinian people, but also of Lebanon, all the Arab people and all the Muslim nations. Israel is a cancerous tumor, as Imam Khomeini said."
Perhaps you could invite comments from the exiguous number of secular Jews who contribute to this blog (if you can call it that) every blue moon or so?
Posted by: Ahem at September 28, 2008 07:07 AM
"...Arabs should just turn their back on Israel until they can actually do something about it..."
Why turn their backs? Why can't the arabic countries just unilaterally declare an end to the cold war? If they were to open themselves up to Israeli goods and citizens it would erase the perception that Arabs seek the destruction of Israel. This would put the diplomatic ball in Israel's court, since Israelis would no longer be able to claim that they are protecting their very existence.
Posted by: Yuri Guri at September 28, 2008 12:48 PM
Chill out habibi, no need to be hysterical.
Let's take the turn the backs thing a step further, conceptually for the discussion. What are we talking about politics wise [neither recognition nor non-recogition, building up own capacity... I assume].
Second for Ahem: Eh mate, I am ADD right now, but I have no clue as to your point (is it our blog that has become a pseudo blog? I guess we're slow that is true).
Posted by: The Lounsbury at September 28, 2008 03:05 PM
By reckognizing, you're basically forfeiting a future diplomatic option for little to no benefit today.
No recognition doesn't mean war. War has costs, with no achievable benefit today either. Not that I would necessarily favor it if it could: if powers were a bit more balanced, I'm sure there would be more valuable alternatives.
So focus should be, build up economies, some amount of democracy, military, regional integration, etc. Manage US interests and internal politics so that no recognition of Israel doesn't become a serious issue. Those are pre-requisites to achieving anything with Israel. Negotiation 101: shore up your BATNA first, and devalue Israel's. Which for Arabs, would take decades.
I'm not against sitting on the table with Israelis for PR's sake in the meanwhile. As long as Arabs keep in mind it's PR. Or that anything material they'd come up with needs to have significant added value. Which they haven't been very good at so far. So protecting them against their own stupidity might not be a bad idea either.
I realize btw how hypothetical all that is. But then, it's not a coincidence reality is that Arabs are in such a mess - so if we're talking what's the best action plan to change that reality, there you have it.
Sorry all for the delay in unearthing spam-locked comments. Sadly our main Admin is gone missing, and my indifferent self is the backstop.
Now, re Shaheen: I agree on diplo recog, on should husband resources to extract advantages, and so long as recognitition is being managed in a rational manner, I think this is smart. This is non-specific to the situ, that's what any smart actor should do.
But one has to signal potential, and maintain credibility (leaving aside ideologues who hate you qua you).
I agree on focus, building up current capacity and wealth, etc... Absolutely.
Posted by: The Lounsbury at September 28, 2008 04:09 PM
But one has to signal potential, and maintain credibility
True. But I don’t think we’re even there yet.
I wrote on how, in terms of game theory, the current equilibrium was the status quo. Any change would imply one of the parties getting a losing proposition vs. the status quo within the current configuration. Given Arabs are the weaker party, they are likely to be the ones bearing it if a shift is to happen now.
To signal potential, Arabs have to think strategically first, in terms of desired potential outcomes, then plan for those outcomes. Right now, the outcomes proposed (e.g. the Beirut proposal) are not even the best deal Arabs could get in a better situ and add little value vs. status quo. They look more like surrendering to the current weak position and trying to solve the conflict within that context rather than focusing on improving their BATNA first. Signaling potential should only come as part of establishing that strategic thought process.
A further comment:
Why turn their backs? Why can't the arabic countries just unilaterally declare an end to the cold war?
For the same strategic reasons that the Americans did not simply unilaterly declate they did not care about Eastern Europe. Because for their own political consumption that would have been profoundly stupid and it would have admitted Western powerlessness over E. Europe.
The "perception" of the Arabs seeking to wipe out Israel now has fuck all to do with any realistic Arabo Muslim reaction to Israel (ex sucking Netanyahu's cock on TV, live, via Israeli feed).
It is politically useful for a number of global players to play this game, utterly excluding local intersts. This kind of question is like someone in 1879 asking in pseudo innocence (or rather worse, in real innocence), why the Turks did not just agree to say openning the Dardenneles to the Russians....
Another reason why I hate I-P convos, the high ration of utter stupidity or fundamental dishonestness on all sides to new information.
In terms of I-P, the ratio would send any proper manager running, except the bloody fucking loons and the odd contra-market efforts, 7alchaine.
Posted by: The Lounsbury at September 28, 2008 06:29 PM
New Month thread is closed for comments, so had to put this somewhere. What do you people make of it?
For the first time in centuries a major split within the five Shiites supreme references took place about the exact time to celebrate Eid Al Fitr.
Ayatollah Sistani decided that Thursday is the first day of Eid, while the four other Ayatollah announced that Wednesday [today] is the first day of the Eid.
Seen as a first dispute among the Supreme Clerics over centuries in public, this split came as unpleasant surprise for the Shiites community, raises doubts about the High-references unity.
Posted by: Klaus at October 1, 2008 06:26 PM
Odd article. This was the most interesting part, I think: "Iraqi TV adopted Sistani’s “date” and started to broadcast celebration Ads ignoring the other Ayatollah announcement."
When to celebrate is about when the moon is sighted, which in turn dissolves into scholastic dispute about what constitutes "seeing the moon", who should see it, where, when, and so on. Sistani apparently argues that once the moon has been sighted on your own latitude with the naked eye, the party can begin. Others hold differing views, but it's nothing to start a civil war over.
That Shiite authorities have not disagreed with each other "in centuries", I would also think is a load of crock.
Posted by: alle at October 2, 2008 07:50 PM
thanks, mate. Couldn't figure out myself whether this was some secret code, big deal or basic misunderstanding. Seems the reporter couldn't either.