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Israel: A National Unity Pact May Be The Last Best Hope

International Outlook

Israel: A National Unity Pact May Be the Last Best Hope

When Prime Minister Benjamin Netanyahu's fractious coalition finally collapsed in December, polls suggested that he'd be ejected from office and relegated to the history books in short order. Since then, a small army of ambitious ex-generals has arisen that wants to push him from leadership of Israel's center-right. At this stage, however, the best guess is that Bibi and Labor Party leader Ehud Barak will come out on top in national voting on May 17 and face a runoff on Jun. 1 that produces a narrow win with a weak mandate.

But the last thing Israel needs now is the long, bitter, and divisive election campaign that is unfolding. The vote is expected to produce the most fragmented Knesset in Israel's 50-year history. The present 11 parties could swell to at least 13, including a powerful new third force, the Center Party, led by former Defense Minister Yitzhak Mordechai. Such atomization of politics dims any prospect for tackling Israel's biggest challenges: The stalled peace process and the country's flailing economy.DEATH OF A TABOO. Indeed, the problems are so deep that a government of national unity may be the best outcome. Once a taboo subject, a linkup between Netanyahu's Likud Party, Labor, and the new Center Party is being openly pushed by Labor's Barak and others as the way to achieve stable government. "The only real option for the next Prime Minister," says a Barak Labor Party activist, "will be to form a national unity government of the three major parties and possibly Shas [the Sephardic religious party]."

Netanyahu last year rejected approaches from Barak to form a unity government. Despite the rebuff, the idea is less outlandish than it seems. Ever since Netanyahu's hawkish Foreign Minister Ariel Sharon, one of Likud's leading lights, stated recently that a Palestinian state was inevitable, the differences between Likud, Labor, and Mordechai's new centrists have narrowed considerably.

Naturally, security issues dominate the campaign and are a key to its outcome. With aging or sick rulers heading neighboring countries from Saudi Arabia to Syria and Jordan, tensions in the region are high. Palestinian leader Yassir Arafat's threats to declare statehood as early as May 4 are raising the temperature to fever pitch. So high, indeed, that Arafat, who doesn't want to help Netanyahu and hardliners, is hinting that he may delay any such step until yearend in an effort to cool the debate.

No quick tonic is at hand for the economy, either. Unemployment is at a six-year high of 8.5%, while economic growth was less than 2% in 1998 for the second year in a row. Foreign investment crumpled by 30%, to $2 billion. The outlook for 1999 is not much brighter: The prospect of a four-month campaign has immobilized government, shattered business confidence, and set the sheckel on a roller-coaster ride.

Netanyahu promised Israeli voters an economic renaissance driven by privatization and deregulation. But, after an initial flourish, the program slowed. Small parties in Netanyahu's cabinet regularly held economic measures hostage to their often narrow political demands, such as funding for religious institutions or a license for an ultra-right radio station. Netanyahu was unable to get his 1999 budget through the Knesset on schedule.

Israel has always prided itself on being the sole democracy in a region of tyrannies and dictatorships. But it cannot afford to let its vibrant political culture disintegrate into chaos. The country is already close to becoming ungovernable. That may be a bigger threat to its long-run security than any offered today by its Arab neighbors.EDITED BY JOHN TEMPLEMANReturn to top

Twilight of an Oligarch

Black-masked government heavies raided Russian oil giant Sibneft on Feb. 2, adding to the woes of erstwhile oligarch Boris Berezovsky. A former member of President Boris N. Yeltsin's inner circle, Berezovsky is fast losing his grip on business interests that made his net worth about $3 billion. A recent court decision robbed him of control of Russian air carrier Transaero. He could now lose control of the country's biggest TV network, ORT, which could sink a deal giving him and Rupert Murdoch exclusive rights to sell advertising on ORT.

Berezovsky is paying a steep price for running afoul of Yeltsin. The Sibneft raid was part of a federal probe into allegations that a security firm he controlled eavesdropped on Yeltsin family members.Return to top

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