The Superfluous Boycott

In Jerusalem this week, a veteran Israeli diplomat named Tuvia Arazi will go on pension and the Political-Economic Planning Division that he directed will be shut down. "We're superfluous," says Arazi, 58, a onetime underground fighter and Ambassador to Cyprus. But he says it with a smile. The Political-Economic Planning Division is actually Israel's antiboycott office, set up eleven years ago to thwart the efforts of 18 Arab countries to choke Israel economically. "The boycott does us infinitesimal harm now," says Arazi. "It is so inefficient and ineffective that we simply don't need this division any more."

Not that the division was ever formidable, at least in terms of size. The Arab League's Boycott-Israel Office, headquartered in Damascus, has 18 branches and a staff of 200. Israel's counterforce, operating on $15,000 a year, had a staff of seven at the height of its activity. At the end it consisted only of Arazi and a deputy, though it also received assistance from Jewish agencies round the world.

On the Sly. The boycott was most effective during Israel's early days as a state, largely because oil had to be shipped from remote Venezuela at an extra annual cost of $15 million. Now the oil comes from close at hand--some small amounts from the Sinai, some from Iran, and some, according to angry Arab nationalists, even from Saudi Arabia, on the sly. Today the boycott costs Israel up to $10 million a year, paid out in commissions to middlemen representing firms that will not deal directly with Israel. But that figure is hardly significant compared with Israel's annual outlay of $1.7 billion for imports.

In many respects, the boycott and other forms of Arab hostility have strengthened rather than weakened Israel's economy. Because Egyptian cotton was unavailable, Israel began to grow its own. Because Israel had to trade far from its natural markets, it developed a large merchant marine (more than 1,500,000 tons today v. 22,000 in 1948). Because many foreign airlines refused to land at Israeli fields in 1948, El Al was formed. In a period of trouble for all airlines. El Al is doing relatively well (see BUSINESS).

At any one time, the Arab blacklist runs to some 600 corporations or individuals in 64 nations. Ford Motor Co. is on it for setting up an assembly plant in Israel despite the fact that there is another Ford subsidiary in Egypt, and Moviemaker Otto Preminger is on it for having made Exodus. But Hilton and Sheraton manage hotels in Tel Aviv as well as Cairo, and such airlines as Air France, Lufthansa, SAS and TWA service both sides. Bonwit Teller, the U.S. department store, is on some boycott lists, presumably for handling Israeli fashions.

Economic Power. When companies submit to Arab pressure, Israel often reacts sharply. France's Renault canceled a contract with Israel for a more lucrative car-assembly arrangement with Egypt; after the Egyptian deal collapsed, Renault tried to get back into Israel and was rebuffed. Often Israel uses what Foreign Minister Abba Eban describes as "the economic power of 10 million Jews in the free world." The Israelis, for instance, leaked word last January that a London-based subsidiary of Mobil Oil had ordered ship chandlers not to supply its tankers with Israeli goods because Libya threatened to blacklist ships found with such supplies aboard. Though Mobil headquarters in New York later withdrew the directive, 1,457 Mobil credit cards were canceled by customers. Of that number, 611 were renewed after Mobil conferred with U.S. Jewish leaders and advertised in Jewish newspapers that "there is no Mobil boycott. There never was."

Japan, which relies on Arab oil for 40% of its requirements, scrupulously respects the boycott. Two years ago, the Nissan Motor Co., which was then selling about 2,000 vehicles a year in Arab countries, told an Israeli dealer that he could not import any of its cars. "Please understand our awkward situation with your cordial heart," Nissan wrote the dealer. The Japanese still refuse landing rights in Tokyo to El Al. In retaliation, 7,000 U.S. travelers canceled reservations on Japan Air Lines to the 1970 Osaka world's fair.

Currently, the biggest headache for the Arab League's boycott director, Egyptian Lawyer Mohammed Mahmoud Mahgoub, is a form of trade conducted close to home. Since the Six-Day War of 1967, Israel has followed an "open bridges" policy that allows the Arabs living on the Israeli-occupied West Bank of Jordan to continue trade and traffic with the East Bank, and thus with the Arab world. The trade, in citrus fruits, vegetables and manufactured goods, has now reached $20 million annually, and competitors like Lebanon are demanding that the Arabs close the bridges. The Arab League will take up the matter in September.

Jordan's King Hussein and the Palestinian guerrillas, in rare agreement, argue that to seal the bridges would be to cede the West Bank to Israel irrevocably. Al Fatah calls the boycott office "a sinecure for parasites and inefficient officials." (It is common knowledge among European companies that a bribe of $2,000 to $5,000 is often enough to get a name removed from the list.) The guerrillas also criticize the boycott machinery as "superfluous." Curiously, that is precisely the word used by Israel's Anti-Boycott Director Arazi to describe his own assignment.

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