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What's Needed for Peace in Israel

The Saudi proposal, although interesting as a new initiative, proposes nothing new in principle ("Israel: A Saudi peace proposal puts Sharon in a bind," Middle East, Mar. 11). Sharon's idea to fence off the Palestinians is not a good prospect for security in Israel, either. Better think of yet another way out of the box.

First of all, there is a need to minimize the cause of the war. Two, provide for Israel a means to enforce security by itself. The first need can be met by buying out the Palestinians. Capitalism is still good for something. Instead of verbal support for peace, make the Palestinians rich. Let the U.N., the U.S., and the European Union pledge $200 billion to $300 billion in payments to dispossessed Palestinians. Can they afford it? Sure. They probably have already spent that much to build up Israel's security in the past 50 years.

The residual assurance of security for Israel, and also the Palestinians who really also want to live unmolested, must come in a form that both Israelis and Palestinians can control directly and yet falls short of military confrontations. They need a common consultative, legislative, and judiciary institution to effectively monitor and enforce their joint security after the war. This may mean some form of a federal arrangement. This is a shocking thought, but if that would give them peace and security, why not? The parties obviously cannot separate, so they must work out a means to live together in peace.

George A. Selivanoff

LaSierra University

Riverside, Calif. I have been under the impression for some time that "crony capitalism" is one of the dirtier phrases in the international lexicon of business and politics. It has been used frequently over the past few years when describing troubled developing economies. What was described in "The fall of Leo Kirch" (European Edition Cover Story, Mar. 11) seemed to me to be a classic example of that activity.

Is it because it is a Western industrial country that the dreaded words never appeared in the article, or is there some other explanation?

Bill Bradford

Tring, England In "Tax Dodging: Enron isn't alone" (American News, Mar. 4), BusinessWeek provided a good analysis on tax-avoidance techniques. If there are two or more legal ways of doing transactions or of accounting for companies' revenues, managers have the obligation to search for the most favorable option, as they do when they are negotiating an agreement or selling a product. Surely there are situations in which it is difficult to verify whether the tax-avoidance technique is legal, but it is more likely due to complex and confusing tax legal systems than to accounting procedures.

Rodrigo Brunelli Machado

Sao Paulo Robert J. Barro is an important economist who has made vital contributions. Nevertheless, I find his comment on the Iranian economy in "The state of the union: Bush mostly got it right" (Economic Viewpoint, Feb. 25) a bit superficial. He wrote that the growth rate in Iran was -1% per year after the revolution, vs. 4% per year from 1955-78. As Iran gets 90% of its foreign exchange from oil, one cannot compare its growth record from 1955-78 with the post-revolution period without taking into account oil prices. Obviously, the oil price was more on the upside during the 1955-78 period.

Even if we cannot overestimate its effects, the Iranian economy suffered from an eight-year war with Iraq (1980-88).

Thierry Coville

Cretiel, France

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