Dr. Mahdi Abdul Hadi

This seminar is part of PASSIA’s program on Training and Education in International Affairs, which has included to date seminars on The United States and Canada: Political Systems, Pol­icy-Making and the Middle East, The Euro­pean Union, The Foreign Policies of Arab States, Strategic Studies, and Diplomacy and Conflict Resolution. The idea of these seminars is to equip young Palestinian graduates with knowl­edge, information, techniques, and venues of communication, etc., pertaining to inter­na­tional affairs. Unfortunately, we are way behind our Israeli neighbors when it comes to having specialists on international rela­tions and the re­lationships of other gov­ernments and peoples with the Palestinians, which is why we need young Palestinian graduates like yourselves whose desire to learn is their greatest asset.

I would ask you to do two things: one, to feel free to be as open as you like with the speakers, and two, to take off your political shirts and think of yourselves not as a fac­tion of this school or that school, but only as Palestinians with a genuine right to this land, including Jerusalem.

I will now give the floor to Dr. Rosemary Hollis from Chatham House, who all of you either met or spoke to during the interview period. As you know, PASSIA prefers to use an external inter­viewer so that we can­not be accused of any form of favoritism. One result of this is that you should by now be aware that you are here be­cause you de­serve to be here, and for no other reason.

Dr. Rosemary Hollis[1]

At Chatham House, we have various con­nections with Japan, including an interna­tional energy and environmental program. A number of Japa­nese fellows have also stayed at Chatham House, and my col­leagues and I go to Japan quite fre­quently in order to discuss issues of mutual in­terest that concern the Middle East. Tradition­ally, I would say the main Japanese interest has been in the Gulf region, the reason being the Japanese dependency on oil from the Gulf.

You are coming from a number of different di­rections in terms of your interest in Japan. Some of you are interested in management and busi­ness practices, others in the Japa­nese state-building process because you see Japan as a country that was destroyed, oc­cupied and then rebuilt. Others, meanwhile, might be more inter­ested in learning a little about the culture and the cultural differ­ences that could affect the Pales­tinian-Japanese relationship.

With regard to the distribution of power in the world, international relations theory especially after World War II was domi­nated by a fixation with a certain type of power, namely military power. Even today, it would be most unwise especially in this part of the world to dismiss military power altogether. A couple of days ago, I asked an Israeli diplomat why Israel will not con­sider allowing trade to go directly from Jor­dan to Palestine and back again instead of obliging it to go through Israeli check­points. I could see what was going through his mind: You must be joking! There is no way we are going to allow them to bring in guns, explosives, chemi­cal warfare agents, or whatever. The Israelis fear that if they do not control what comes in and what goes out the Palestinians will be able to increase this old-fashioned but nonetheless ex­tremely important source of power. Even those Israelis who talk about a Palestinian state talk about a demilitarized state. It re­mains up to the Palestinians to decide if having military power is crucial to the kind of statehood they are seeking.

The Japanese, of course, were militarily ex­tremely powerful during World War II. Now, as part of its effort - which has been ongoing since the end of World War II - to establish a new identity in the world, Japan no longer uses its forces abroad in any way, although it has defen­sive forces to protect Japanese home territory from attack and a number of bases that are part of the Ameri­can strategic presence in the region. At the time of the 1991 Gulf War, there was an internal debate inside Japan concerning the kind of military contribution it could make to the coalition war effort; at the moment, the Japanese Constitution does not allow for that, and there would have to be some major changes in Japan in order to deploy military forces abroad. In ef­fect, there has been a decision that the military power of Japan will remain purely defensive and as Japan has not come under attack since World War II, the question of what the Japanese have got or have not got and whether it is adequate has not arisen.

Another source of power is production, or rather industrial power or the power of pro­duction, and here I am thinking along the lines of the Marxist concept of the power of production. Basically, you cannot enter the industrialized world with­out the ability to manufacture the kinds of ma­chinery that you need to enter the post-industrial world. If you are a purely agricultural society without machinery or with only imported ma­chinery, you have not become an indus­trialized country and therefore you are de­pendent on im­ports. Dubai is a wonderful trading port, but does it produce anything? No. There is a lot of talk about the Gulf economies and the fact that the Gulf coun­tries are obliged to import all their military equipment, which results in a major form of dependency because they do not have the power of production. This power of pro­duc­tion does not only apply to military equipment. You get your washing machines, fridges, and televisions, etc. from Israel, but, clearly, if Pal­estine had its own power of production, some of this de­pendency would be reduced.

Note that optimism, hope, tenacity, deter­mina­tion and all the rest of it can help, but the inter­national relations theorists and the international political economy theorists are mainly interested in the structure that de­termines who has and who has not, where the power is and where the power is not. Israel, for example, started as a commu­nity that built itself and then turned itself into a state and had industrial production. Now, today, Israel is far more than an industrial society, one reason being that it has hi-tech. Hi-tech gives power, especially if the countries that have it can develop it them­selves, a facet we can label as ‘knowledge’. This ‘knowledge’ is like the soft­ware that goes into the computers and the crea­tion of that software. The power of production is going to determine whether you could make the hardware here or whether you have to import it, but you really need the knowledge to know what it is that you want from other countries.

I have to say that in terms of computer know-how, Palestine is doing quite well, the Internet and the use of the Internet having taken off quite spectacularly, leav­ing Palestine well ahead, I would say, of any of the other Arab countries. The Leba­nese, for example, took off in that de­part­ment, but they initially lacked the telephone lines and everything was done by cellular tele­phone, which proved enormously ex­pensive. The Egyptians would be up there but for the fact that their telephone system is so old, although I be­lieve that they are in the process of replacing it. Fortunately for you, you did not have to do what they had to do in Abu Dhabi, that is, to import Egyptians to run the machinery - you al­ready have your own machines and do not need to rely on Israeli expertise to run them.

The Americans are now trying to get them­selves up to speed in the area of knowledge warfare because the American society, which is the most powerful in the world and the most powerful in terms of produc­tion, is vulnerable when it comes to hack­ers, which means that it is important that they keep ahead. There is a theory that if you lead the race in the hi-tech computer field, there is no way that other people can catch up with you because knowledge is growing so fast and although people can acquire some of that knowl­edge, they can­not compete in the discovery area.

At this point, I should point out that there is a difference between innovation and knowledge. Innovation means that you have the most knowl­edge, but when this knowledge is imported, you do not have innovation. The potential vulner­ability of the Gulf States is that all their techni­cians and managers are imported.

The last facet is the power of credit, which played a big role in the financial crashes that took place in Asia. Karl Marx built his whole theory concerning the power of pro­duction on the basis of his understanding of how you can mix labor with raw materials and produce goods, which is what produc­tion is all about. What be­came much clearer later, however, is the power of credit. There are bodies like the Paris Club, the Interna­tional Monetary Fund (IMF), and the World Bank (WB), and if they decide that you are not creditworthy, you simply cannot bor­row. Nobody can save enough money to build a fac­tory, to buy the plant, etc., so without the power of credit, businessmen are lost. Today, the inter­national power structure dictates that certain international banks, particularly Western banks, have a very strong hold on the power of credit. The Japanese at the moment are under pres­sure from the United States not to lend money to Iran; they made one sizeable loan to Iran to fund an industrial project there and it makes perfectly good sense that having made that loan they want to protect their return on it by ensuring that the Ira­nian economy is going to be able to deliver, but for political reasons the United States inter­vened and put pressure on the Japanese Gov­ernment not to renew or expand the Iranians’ line of credit. As far as the United States is con­cerned, the Islamic Republic of Iran is not to be traded with, not to be lent anything, not to be dealt with at all. In fact, America has actually said that if one penny of IMF or WB money goes to Iran, the United States will withdraw all its funding for both organizations, which would liter­ally kill them.

Since the crash 18 months ago, the Japa­nese banks and therefore the whole Japa­nese econ­omy have found themselves in trouble for lend­ing to insecure ventures based on insufficient security. One impor­tant aspect of the British and the Japanese relationship with the United States is that the British and the Japanese along with Canada – the three largest foreign investors in the United States - are the most exposed in terms of their investments there. Conse­quently, they are extremely dependent on the success of the American economy be­cause if that nosedives, then so do their in­vestments and so does a large chunk of their financial security.

The distribution of power across the inter­na­tional political economy has these main facets, but in my opinion, this model takes insufficient account of the more tangible aspects of human interactions and human relations, all of which affect business and international relations. The average politi­cal economist is a little uncomfort­able with the whole idea of culture because he cannot put numbers on culture; the tendency has been in the discipline of international rela­tions to work with things that you can add up and divide. Culture, of course, is not like that, so the social scientists have been do­ing their best to find ways to feed the con­sequences of culture into their knowledge base in order to understand how the world works. The same could be said of attitude. The British, for example, were still walking around behaving as if they had power and influ­ence long after the fall of the British Empire, but if anybody had tested it, it would have crumbled. I still maintain, however, that it is always, or nearly always possible to convince people that you have power, even at the Israeli checkpoints.