Energy Security

Energy security is becoming a real worry for the world outside the Middle East.

Fossil fuel will eventually run out. How will nations respond? China is insuring more than most. For example, its energy policy for years has been to spend zillions on hydro-electric power; and the latest developments are mentioned today:

China's announcement this week that it will construct what is likely to be the world's first operational pebble-bed nuclear reactor, ahead of the US and Europe, marks a resurgence for the nuclear industry.

Some other countries are less committed:

In the UK, the government has deferred a decision on whether to continue with nuclear power. In the US, President George W. Bush has spoken in favour of greater investment, but approval of new plants has been slow in coming.

The Japanese government has faced growing pressure to phase out nuclear plants after a series of minor but well-publicised accidents. http://news.ft.com/cms/s/205137ec-7a1a-11d9-ba2a-00000e2511c8.html

The decision of some governments to run down their existing reactors is questioned:

there is already a solid case for countries to extend the life of whatever reactors they have. What, for instance, would it profit Britain to generate 20 per cent of its power with renewable energy such as wind by 2020, if by around the same date it were to lose exactly the same share of output by taking its reactors out of operation? http://news.ft.com/cms/s/68d12ff0-7a41-11d9-9b93-00000e2511c8.html

All in all, a drop in demand for oil and gas will clearly impact stability in the ME. This is doubtless a matter for discussion when the outcome of the current political arrangements is known.

Palestine Economy

The economic prospects of Palestine were the subject of a report by the World Bank last summer. The WB study was requested by the Palestinian Authority (PA), the Government of Israel and the Local Aid Coordination Committee.

Extracts from the introduction by the WB President are:

The key to Palestinian economic growth is private investment, which has declined dramatically since mid-2000. Since investors cannot be expected to bring capital to an area in conflict, both the PA and Israel must do their utmost to restore calm and a sense of security in the West Bank and Gaza. In addition, the PA will need to move decisively to create an environment more attractive to investors.

Above all, Israel’s restrictions on the movement of people and goods need major overhaul. These closure measures stifle any hope of Palestinian economic revival.

Donor assistance levels today average almost US$1 billion each year. These contributions have played a vital role in alleviating hardship, and remain indispensable. Without a change in Palestinian economic prospects, though, it is difficult to expect donors to increase existing aid levels. http://lnweb18.worldbank.org/mna/mena.nsf/Attachments/Disengagement+Paper/$File/Disengagement+Paper.pdf

Mr Wolfensohn thinks stability in the region would assure increased aid flows and produce much inward investment. "Without an economic revival, today’s Palestinian youth face a gloomy future, and their desperation will endanger any peace process."

This is a very current topic. Last weekend the G7 grouping decided to investigate how best to finance international assistance, with a view to reporting the findings to the G8 summit in July.

Diplomacy plus

How to get the leaders of the Israelis and of the Palestinians to talk to each other?

But the people they represent are fed up with the constant state of war. And the US has decided that enough is enough: the US is one of the few international powers the leaders will listen to seriously.

The Economist reports:

AN UNDECLARED and imperfect ceasefire in the Gaza strip has now been in place for almost three weeks, bringing relative calm after months of bloodshed. . . the scene is set for substantial progress to be made when the two men [leaders of Israel and Palestine] meet, along with President Hosni Mubarak of Egypt and King Abdullah of Jordan, at the Red Sea resort of Sharm el-Sheikh on Tuesday February 8th.

Ms Rice [representing US] called on Mr Sharon’s government [representing Israel] to dismantle those Jewish settlements in the West Bank that have been built without its approval. And she said that America would not look kindly on any unilateral Israeli moves that undermine the renewed peace process. . .

Tuesday’s summit may formalise the undeclared cessation of hostilities. With luck, there will be progress on the negotiations to release prisoners and confirmation of the plan for Israeli troops to hand over control of some West Bank towns to the PA’s forces. But even if all goes well, the months ahead will be full of challenges.
http://www.economist.com/agenda/displaystory.cfm?story_id=3641913&fsrc=nwl

Today's news gives a report on the peace summit in Egypt:

With a verbal cease-fire deal in hand, Israeli and Palestinian leaders met at a Mideast summit Tuesday for face-to-face talks and goodwill gestures aimed at ending four years of violence and entering a new era of peace talks.

Meanwhile, in Israel, police stepped up the alert level throughout the country Tuesday, due to numerous intelligence warnings of possible attempts to disrupt the summit with an attack inside Israel. Police also heightened their deployment and established mobile checkpoints on various roads. http://www.albawaba.com/en/news/179853

The agenda for this Spring's conference in London on the Middle East will be changing daily. The arrangements for economic development in Palestine may be the number one item for discussion.