Lessons of Gilo's departure

Dr. Norman Bailey

The antitrust commissioner's resignation is a positive, but the regional news is mixed.

The resignation of Prof. Gilo as head of the Antitrust Authority is undoubtedly good news. His reneging last December on the agreement he had made with the natural gas companies Noble, Delek and Ratio the preceding March had thrown the whole development of Israel's offshore natural gas resources into confusion. The matter had already been badly handled by the government, which had driven out the Australian company Woodside, and Gilo's retraction had put at risk the economic, financial and geo-political benefits of the gas discoveries. The government, after an unacceptable earlier draft, finally crafted a new, acceptable proposal over Gilo's objections, which prompted his resignation. The lessons to be learned here are twofold: regulation is necessary but should not dominate at the expense of other relevant considerations; and agreements made should be honored, unless circumstances change fundamentally, which was not the case. Israel as a magnet for investment has been preserved.

Among other good news is that US-Israel defense cooperation continues unabated, with a good allocation of funds on the US part for joint weapons system development. Also the US vetoed the proposal to force Israel to disclose its nuclear capabilities at the Non-Proliferation Conference, despite strong indications that the US Administration was considering not supporting Israel. The role of the new Secretary of Defense, Ashton Carter, was significant in both cases.

As always, plenty of bad news. Islamic State is resurgent and the Iraqi army has again melted away in the face of the enemy; the US and allied bombing campaign is not working, as it never does absent ground forces. The six-party talks with Iran appear to be moving ahead towards an unacceptable, indeed highly dangerous "agreement", although reports of serious rifts in the Iranian political system and remarks by German Chancellor Merkel during President Rivlin's visit indicate that there may not be an agreement after all, despite President Obama's desperate desire for one. Finally, the situation in Yemen continues to deteriorate, leading to the possibility that Iran may try to mobilize the Shiite populations of the Arabian side of the Gulf. Two can play at that game, however. The Iranian minorities, which are half the population, are predominantly Sunni and some of them are in a state of latent or active insurgency.

Norman A. Bailey, Ph.D., is Adjunct Professor of Economic Statecraft at The Institute of World Politics, Washington, DC, and teaches at the Center for National Security Studies and Geostrategy, University of Haifa.

Published by Globes [online], Israel business news - www.globes-online.com - on May 28, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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