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To: Katelew who wrote (25918)	4/18/2002 1:11:00 PM
From: Katelew	Respond to of 281500

Thursday, April 18, 2002 Iyyar 6, 5762 Israel Time: 20:01 (GMT+3) The other crisis By Avraham Tal The political and security tensionthat has been going on for weeks, and the dramatic events, on an almost daily basis, have overshadowed the seriousness of the economic situation in which Israel finds itself at the outset of its 55th year. True, tens of thousands of people are being badly hurt in the wake of the blows dealt by the recession, in the form of deepening unemployment and decreased income, but the situation has not yet deteriorated to the state of affairs we have seen in other countries that have been rocked by a deep economic crisis: resignation of the leadership; lines outside banks to withdraw savings and at airports to leave the country; and riots on the streets. The Israeli state economy is marked by calm, and even the tendency to stage strikes at the hint of a more or less justified cause has faded somewhat. However, that calm is concealing - and to a certain degree also blurring - the gravity of the situation. Against the backdrop of a deep recession and a political-security crisis, growing signs of danger are being beamed from every direction. An almost random compilation from the past few days: The economists of the international credit-ratings agency Standard and Poor's left Israel's credit rating unchanged but lowered its outlook for the country from "stable" to "negative"; two other credit rating agencies, Moody's and Fitch, are likely to follow S&P's lead, meaning Israel could find it difficult to obtain loans and credit abroad and will pay more for those it does obtain. A Bank of Israel survey of companies and businesses found that most of the companies in most of the sectors experienced a decline in activity in the first quarter of 2002 and expect that trend to continue in the current quarter. The purchasing managers' index, which is usually a reliable indicator of the trends in the economy, recorded a slowdown and contraction last month, following signs of recovery that were visible in the previous two months. That is one of the major disappointments of the past month: from the beginning of the year until last month there had been certain indications of a possible turnaround in the economy. This week, the director-general of the Finance Ministry, Ohad Marani, who generally displays high confidence in the economy's ability to withstand hardships, said, "The dangerous combination of a deep security crisis and a complicated economic situation could bear the potential for an economic crisis and a financial collapse." Everyone who follows macroeconomic data will appreciate the caution of the director-general. The situation only has the "potential" for crisis and collapse, but what is the distance between a potential crisis and a concrete one? Weeks? Months? As long as no measures are taken to ward off the onrushing dangers, the distance will be only a matter of a few months, and then the frightening scenes we saw at the airports in Argentina and in the streets of its cities could be replayed here. Despite the recession and its consequences, the heart of the crisis does not yet lie in the real economy - that is, employment, manufacture and consumption and the standard of living - but in the fiscal sphere, meaning the state's revenues and expenditures. An imbalance on a scale unparalleled in recent years has been created in the budget due to a steep fall in revenues and a huge increase in spending. The deficit currently is only "on the books" but, as in a family budget that depends on a large and ever-growing overdraft, if it is not dealt with it will produce ruinous results that will be manifested in the ills that are characteristic of a collapsing economy: galloping inflation; an exchange rate (devaluation) that lurches out of control; a widening gap between imports and exports; and the collapse of the country's payments system. In contrast to the political-security crisis, whose resolution is dependent not only on us but on the Palestinians and on third parties, we have the power to avert a full-fledged economic crisis. The required action focuses on the state budget and obliges a range of painful cuts. Everyone has to do his share, as though an emergency mobilization order has been issued to the economy. To begin with, cabinet ministers and their deputies, in a pioneering, demonstrative - and essential - move, must reduce their number by a quarter at least; the entire government must make cuts in departments across the board; Knesset members must suspend "populist" legislation; the Histadrut labor federation must agree to a wage freeze in the public sector; and the general public, which receives the government's services and pays taxes to enable them, must accept the imposition of a temporary heavier burden. Unlike the emergency call-up order to the army, the economic mobilization order requires only sacrifice of the living standard. News \| Friday Magazine \| Week's End \| Business \| Editorial \| Anglo File \| Editorial & Op-Ed \| Features \| Sports \| Art & Leisure Books \| Letters \| Food & Wine \| Cartoon \| \| Print Edition \| In-depth \| Archive \| About Ha'aretz \| Tech

To: Katelew who wrote (25918)	4/18/2002 1:11:01 PM
From: stockman_scott	Read Replies (1) \| Respond to of 281500

Annan calls for multinational force in Palestinian territory Friday April 19, 12:17 AM sg.news.yahoo.com UN Secretary General Kofi Annan asked the Security Council to consider sending an armed multinational force to help end violence in Israeli-occupied Palestinian territory. He told council members in closed session that the contingent should have "a robust mandate" under Chapter Seven of the United Nations Charter, which authorises the use of military force to impose council decisions. The text of Annan's remarks was made available to AFP on Thursday. Diplomats confirmed that he followed the text. Annan said he did not envisage a United Nations force, but "rather a multinational force formed by a coalition of the willing" -- a group of nations allied in a military operation with council approval such as that in Kosovo. He noted that the council had discussed the desirability of sending limited numbers of unarmed observers to the Palestinian territories, but said their safety could not be guaranteed and they would be too few to bring about a ceasefire. "It is for these reasons that I believe the deployment of a multinational force deserves serious consideration," Annan said. "The situation is so dangerous that the international community has an obligation to provide this assistance," he added. Annan began by recalling the "horrific" scene in the Palestinian refugee camp at Jenin, in the West Bank, which top UN officials were able to visit Thursday for the first time in three weeks. "They witnessed people digging out corpses from the rubble with their bare hands," Annan told council members. "The destruction is massive and the impact on the civilian population is devastating," he went on. The logic of war had taken hold, "previously understood 'red lines' have been crossed" and there were no red lines left, he said. Unless the international community acted now, "we may well see the resumption of a cycle of attacks and reprisals." A multinational force would have four objectives, he continued. First, it would work with the parties to end the violence. "This would entail monitoring the withdrawal and redeployment of the IDF (Israeli Defence Forces) to positions held before September 28, 2000" -- the start of the intifada, the Palestinian uprising against Israeli occupation. Second, the force would "gradually create secure conditions in the occupied Palestinian territory for the resumption of normal economic activity and the unimpeded delivery of humanitarian and development assistance." Third, it would make it possible to rebuild the shattered Palestinian Authority, and fourth, it would work to bring the stable political environment necessary for peace talks to begin. The advantage to Israel, he said, was that it would "place an international spotlight on any extremist Palestinian groups that try to undermine a ceasefire by continuing to engage in terrorism." In a final note of caution, Annan said the force he envisaged must not appear to freeze the political and territorial status quo. "It could only succeed if Israelis saw it as part of a process leading to long-term security and if Palestinians saw it as part of a process leading to the end of the occupation and the withdrawal of Israeli settlements," he said.