The President’s “Tomorrow” conference launched several complex initiatives whose success depends on public and private sector cooperation. Can he make it work?The impressive “Tomorrow” conference that President Shimon Peres gathered for Israel’s 60th anniversary was a great public relations coup, no mean achievement considering Israel’s dismal image abroad. But the ever-so-ambitious Peres had more than just public relations in mind. He wanted no less than to chart Israel’s future by studying almost all the challenges facing Israel, the Jewish people and even the world and then framing a comprehensive agenda for tomorrow.

The conference did indeed launch several initiatives – from planning the course of the Jewish people to digging a Peace Canal between the Red and the Dead Seas; but whether even some of these ambitious plans will actually materialize remains to be seen. Not only because they are immense, complex and objectively hard to “plan” and execute, but because their implementation largely depends on government and public sector cooperation with third way NGOs and/or private sector enterprises, a blend that has never worked successfully.

We know how well governments perform, world-wide and especially in Israel, where the role of government is so overwhelming and so anti-productive. Over 75% of Israeli government resolutions are never implemented, some would say mercifully so, because when they are, the results are dismal. Just look at what happened to the Galilee and the Negev or for that matter to all development towns, even to Jerusalem, all those places that governments tried to “develop.” Billions later they are usually worse off because governments, left or “right,” are not productive entities. They are focused, as they apparently must be, on discriminating and anti-productive political work, and they cannot implement their plans without fostering huge bureaucracies.

It is not accidental that all government-generated five- and 10-year development plans have universally failed, not only in Communist or Socialist regimes but also in so-called “mixed” (more accurately mixed up) economies such as Israel’s. The many plans for overcoming poverty and the “income gap,” costing billions and wasting precious resources, all failed. They also misdirected resources from market-generated productive activities, such as small businesses. Instead of economic growth, these government plans generated anti-productive and corruption-enhancing bureaucracies that abuse their power and make it impossible for productive enterprises to thrive.

A little late in his life (but as the saying goes “better late than never”) – and painfully late in the history of the state of Israel – Peres has been recently singing some really new tunes. After decades of employing massive state intervention to implement his visions, at high costs and very poor results (it worked once – we do not know at what cost, of course – when the far-sighted Peres helped Israel enter the atomic energy club), Peres recently started lauding the role of private enterprise in various developments projects. In his inimitable way, Peres claimed that industrial parks and hotels could better secure the peace in disputed border areas such as the Golan Heights and the Arava than fortifications and armed brigades. He neglected to mention, however, that in the foreseeable future, industrial parks and tourism in such contested areas will need the protection of a very strong force to survive, or they will meet the fate of the industrial parks and the hothouses that have been looted and set on fire by some of our neighbors who do not share yet Peres’ admirable understanding of the link between economic prosperity and peace.

Peres went even further. He lauded international trade and globalization for generating development and peace, making governments and their efforts look puny if not irrelevant. A really remarkable change of heart for a man who spent his entire life in politics and in government generated development schemes and who only recently branded the market economy as “piggish Capitalism”.

Even more remarkably Peres suited action to words and appointed one of Israel’s most remarkable entrepreneurs, Yitzhak Tshuva – a man known for his daring and flare, but more importantly a man with the ability to translate his bold visions into reality – as the chief implementer of his major project, the Red-Dead Sea Canal. If there is a person who could conceivably cut through the tangled ticket of bureaucracies that could block a project that is dependent on the cooperation of not only the notoriously uncooperative and resistant Israeli bureaucracy but also on the not less “talented” Jordanian bureaucracy (at least in Jordan there is someone – the king – who can keep the bureaucracy in check sometimes) it is a person like Tshuva. It is a stroke of true creativity on the part of Peres to have entrusted this project in his capable hands.

That said, the jury is still out on the fate of all projects that involve deep cooperation between the public and the private sector. Getting the two to cooperate is like mixing water with oil. It will take some doing to get a good working relationship between an entrepreneur that understands the economic opportunities and constraints of such projects, that knows to assess risk and to manage it, a person who has the flexibility and knowledge to deal with unforeseen contingencies, and the politically-rather-than-economically-oriented, risk averse and rigid bureaucracy.

We can only pray and hope that Peres’ vision of tomorrow will not turn out into another manyana.

Printed by courtesy of The Jerusalem Post.