Middle East

The flight into Egypt of tens of thousands of Palestinians from Gaza this week might provoke some rethinking by Palestinians into how they might improve their lives.

Gaza is a 360 square kilometre strip of land along the Mediterranean bounded by Israel and Egypt.

Its population of 1.5 million makes it one of the most densely populated places on the planet.

At international law it is part of no country. Egypt occupied it in 1948 after the dissolution of the British Palestinian Mandate and then Israel occupied it after the 1967 war.

Since the last Israeli settlers withdrew in 2005, it has notionally been governed by the Palestinian Authority, but in fact it has been controlled internally by Hamas for the past year. Israel controls the border, the coast and the airspace. It can determine what people, goods, and electricity cross the border. Without access to Israel and Israeli electricity, life in Gaza descends from the merely grim to utterly hellish. Small wonder when the border to Israel was closed most recently, people attempted to cross to Egypt for essentials.

Life in the other parcel of land notionally controlled by the Palestinian Authority but hemmed in by borders mostly under Israeli control – the West Bank – is better, but not a great deal better.

For Palestinians to get a better life they will have to change the reality-denying mindset instilled by Yasser Arafat when he led the Palestine Liberation Organisation.

This mindset was that Palestinians could rid Palestine (including what is now the state of Israel) of its Jewish population and that the use of violence was the way to do it.

Morality aside, it was and is illusory.

More than 5.6 million Jews live in Israel-Palestine. They are not going anywhere and they have too much military power to be removed, again leaving aside the morality of attempting to do so.

That being the case, Hamas, Fatah, the Palestinian Authority and Palestinians generally should renounce violence not only because violence is immoral, but because it is not achieving anything.

They should also recognise Israel’s right to exist because not doing so is not achieving anything.

Would that be total capitulation? No, it need not be.

What about a settlement? – a peace settlement or a political settlement? Well, the saga of seemingly endless attempts at negotiated “settlements” has been one of the main problems in the Middle East. President Bush’s lame-duck attempt this month was just the latest. Before that Oslo and Camp David were similar failures.

The idea of a negotiated settlement presumes there are two “sides”, like two nation states or two individuals who can come to an agreement and stick to it.

The Oslo agreement in 1993 came up with a two-state solution. A Palestinian state would be created from the West Bank and Gaza. The Israeli state would comprise the rest. But the agreement broke down over borders; suicide bombings; Israeli attacks on Palestinian sites and the question of whether those Arabs (and their descendants) who left or were expelled from Israel in 1948 had a “right of return” and a right to claim compensation.

You can’t have two “sides” when so many people from each side are demanding a right to live in land the other claims.

None of this is doing the Palestinians any good. Even if they got their own state, would they be much better off? Inevitably it would be incompetently and corruptly run, as the running of the PLO and the Palestinian Authority show. And a state comprising the land-locked West Bank cut from the coastal enclave of Gaza would not be economically viable.

There is another course. Forget a separate state. The region already has one reasonably functioning state called Israel. Twenty per cent of its population is non-Jewish (mostly Moslem Arabs, but some Christians and Druze). That 20 per cent (or 1.4 million) is growing faster than the other 80 per cent.

Many Arabs living in Israel, the West Bank, Gaza and the Golan Heights (which were taken from Syria in 1967) have a right to Israeli citizenship, but refuse to take it up because they think it would be some kind of betrayal. They should take up Israeli citizenship. Palestinians in Gaza, West Bank and Golan Heights – far from seeking a separate state – should demand integration with Israel. Jews could settle in those territories and Arabs could buy property and live in Israel.

Oddly enough many hardline religious Jews would welcome a Greater Israel. It would comprise all the area presently controlled by Israel – Israel itself, Gaza, the whole of the West Bank and the Golan Heights.

Greater Israel offers the best long-term chance for peace, because of demographic forces. Not many Jewish immigrants are arriving in Israel these days – about 18,000 a year. The birth rate of Arab Israelis is much higher than Jewish Israelis. Arab Israelis will be a quarter of the population in 15 years.

Greater Israel has a population of between 10 million and 11 million (West Bank figures are disputed). Of them just a tad over half are Jewish. Given the birth figures it will not be long before the Jewish population is less than half.

With that demographic make up the state of Israel would have to become more secular and a society which embraced religious tolerance. Arabic would have to become one of several official languages.

So far from shunning Israeli citizenship and shunning Israel, the Palestinians should embrace it, and having abandoned violence take up representation in the Knesset and the other institutions of Greater Israel. That would be a more likely path to peace, dignity and prosperity than the mad attempts at “negotiated settlements” punctuated by sporadic episodes of destructive violence.

Mortgages

Treasurer Wayne Swan and his predecessor Peter Costello have had a glib response to bank bastardry – change banks.

Costello was referring to exorbitant fees and charges. Swan was referring to banks charging higher interest rates independently of the Reserve Bank’s cash rate.

The Treasurers have been condemned for impracticality. The costs and inconvenience of changing outweigh the benefits, particularly as there are only a few of them in Australia and there is not much between them anyway.

Swan must be ruing the day that the previous Labor Government began the process of privatisation of the Commonwealth Bank – the people’s bank, set up in 1911 by the Fischer Labor Government.

At least when the Commonwealth Bank was in Government hands it could hold the private banks in check with competitive pressure.

But now the big five can do pretty much as they like in pursuit of profit. In 2006-2007, the ANZ, NAB, Commonwealth, Westpac and St George Bank reported a 10.7 per cent rise in collective net profit to of $17.9 billion. Westpac alone was up 14 per cent to $3.5 billion.

They have put up their rates without any increase in the cash rate by the Reserve Bank. In the face of such good profits how an they justify it? They blame the sub-prime mortgage crisis. Well, yes, the sub-prime crisis is responsible, but not in the way the Australian banks contend.

As people in the US default on sub-prime mortgages – loans secured by over-valued properties by mainly non-bank lenders to people with poor finances – the lenders have to refinance, thereby making money scarcer and the price of money (interest rates) higher.

But the Australian banks have not been adversely affected to any great degree by what is happening in the US. To the contrary. The sub-prime crisis is making life hard for Australian non-bank lenders – such as RAMS. It means less competition. It means that in 2008 the big five banks can jack up their rates without a loss of market share to non-bank lenders in the way they suffered in the 1990s with people like Aussie Home Loans.

The good old days of low competition have returned for the banks, without even the restraining influence of a government-owned Commonwealth Bank.

Well, the Commonwealth Bank is not going to be re-nationalised, though the British Government is thinking of taking over a failed non-bank lender in Britain.

But a couple of things could be done to pressure the Australian banks. The banks want to maximise profits – if it means lower wages for their employees, poorer service, higher charges and a greater gap between they rate they borrow at and the rate they lend at, so be it. They will do that for as much as the market will bear.

At present the market – the customers – are just copping it. But customers can punish some banks and reward others by moving as much of their business as possible without incurring big transaction costs. It is fairly easy in these days of internet banking. It is easy enough to move all your cheque, savings and credit card accounts from one bank to another and leave the mortgage (the hard on to move) with the old bank.

Banks thrive on cheap deposits. Wages, salaries, professional fees and small-business takings pour into zero or low-interest cheque and savings accounts every day. A bank would not like the loss of the $60,000 to $150,000 which the average working Australian put through their bank account each year. Nor do they like losing credit card interest which so many customers incur despite their best intentions.

Moving accounts would have an effect, even if the mortgage stayed with the old bank because mortgages usually get paid out before full term when people sell to move. So the old bank would be on notice of gradual customer loss.

In the meantime, state and federal governments could do something about mortgages to make them more easily transferable.

At present, someone moving a mortgage faces bank and legal fees and state or territory land registration fees – both for removing the old mortgage and registering the new. All up it is several hundred dollars. The maximum difference between the five banks’ variable interest rate is only about 0.1 per cent, so it might take a couple of years to make the move worthwhile and in that time your new bank might easily raise its rates by more than your old one.

If Treasurer Swan is serious about people swapping banks for lower mortgage interest, he should talk to the states and territories about creating a new form of standard transferable residential mortgage – one that can be assigned from one bank to the other at the direction of the lender without involving Land Titles Offices.

If it is good enough for one bank to lend a certain amount on a house it should be good enough for another bank to take over the debt without a new valuation.

Sure, there would be some risks, but banks have been balancing risks against costs of comprehensive valuations and the monitoring of repayment capacity for decades.

The difficulty for Swan is that before the election Labor concentrated on keeping household costs, including the costs of mortgages, down. But an Australian Government of either complexion has little power to do much about it. And the events of the past couple of weeks suggest that it has even less power than was thought before the election. Not only can the Reserve Bank jack up rates independently, we now see that the commercial banks themselves can increase their rates irrespective of what the Reserve does and get away with it.

Australians are paying again for the sale of the Commonwealth Bank. It was sold between 1991 and 1996 at grossly lower than true value. At the 1991 float of 30 per cent of the bank, the Government sold shares at $5.40. They were 18 per cent higher two days later and are now more than 10 times that value, and that does not take into account dividend payments. A raft of middlemen fattened their wallets in the remaining two floats.

That aside, Australians have also lost a bulwark against rapacious behaviour by oligopoly of the few commercial banks for which they are now paying.

Suharto

So Suharto is to die in his bed instead of in a jail cell where he belongs.

The 86-year-old former Indonesian President is in hospital suffering from anemia and severe edema and receiving the best medical attention Indonesia has to offer – a far cry from the fate of thousands, perhaps millions, of Indonesians, Timorese, Acehnese, West Papuans and others who got in the way of his military rule.

Suharto got away with so much because of three doctrines of western diplomacy that prevailed from the 1950s until the late 1980s. The first was that any regime was better than a communist regime. The second was that a stable regime was always better than instability. And the third was a tacit agreement that targeting heads of government was not on – unless, of course, they were communists.

These doctrines overrode the fine ideals that US President Woodrow Wilson attempted to assert after World War I which included rights to self-determination, democracy and the rule of law.

It meant that throughout the world the US and many other western governments would support vicious regimes provided they were anti-communist. And in the name of freedom and liberty they opposed ethnic, linguistic and religious minorities that sought autonomy from these regimes.

In some respects it is still happening. Any regime is better than an Islamic fundamentalist regime. A stable friendly government – such as Turkey – is to be supported over minorities seeking autonomy, like the Kurds. And the only heads of government to be targeted are those accused of supporting Islamic terrorism

I was in Indonesia in 1996 when Suharto looked like he would continue in power for as long as he wanted. I was part of a visit by a group of editors, deputy editors and others organised by the Australia Indonesia Institute which was set up by the Australian Government to improve Australian-Indonesian understanding – very commendably stuff.

Surprisingly a last-minute interview was arranged with Suharto. We were whisked into a mini-bus. Seven police motor-cycles with lights flashing appeared from nowhere and we sliced through the Jakarta traffic to the Presidential Palace.

It was all very polite and gentle, but underneath Suharto was rigid as iron. No, there would be no autonomy of any kind for Timor. The president would continue to be chosen by the State Assembly (three quarters of whose members were army officers). The media would have to work with the aim of national unity to ensure economic growth, and so on.

In Jakarta and among the diplomatic elite the view was that the strongman would continue in office for a long time yet..

After the official part of our trip was over, I travelled through Java by third-class train and bus. The picture was different. People wanting to practise their English could be coaxed into volunteering their views on Suharto.

It seemed to me that the people would turn on Suharto as they had done against other dictators in other Third World countries and I wrote an opinion-feature piece to that effect. Ian Sharpe did a splendid illustration of a volcano about to go off to go with it.

It was wonderful to see Suharto go less than two years later after mass demonstrations against his rule.

But the sad thing is that in the ensuing 10 years, nothing much has been done to bring Suharto to justice. The world sadly does not have a robust system of international law to try heads of government who are alleged to have corruptly enriched themselves or tortured or killed their people.

There is a glimmer of hope. We have seen former heads of government Charles Taylor and Slobodan Milosevic in the dock and Augusto Pinochet came close. But, in general, governments are wary of an international justice system for former heads of state. Who knows who might be next? – George W. Bush for waging an aggressive war, even if against a tyrant.

Also, if you start prosecuting former heads of state it might bring up inconvenient facts, like the amount of support they got from western governments and it might give encouragement for minorities to air grievances, causing trouble for stable west-supporting governments.

Corruption charges were filed against Suharto, but they were dropped in 2006 because of his failing health. Attorney-General Supandji mentioned this again this week after some leading Indonesians, incredibly, sought a pardon for Suharto on the grounds that he did so much good nation building. Far from that, he left Indonesia riven with religious and ethnic violence and incapable of withstanding the Asian economic crisis.

The National Commission on Human rights is looking at six allegations involving the death, imprisonment and torture of various communist and separatist opponents, but it is taking its time.

A civil action is afoot to return several hundred million dollars allegedly siphoned off to the Suharto family. Again, it is slow.

Bizarrely, the only judgment brought down in the whole sorry saga was one in Suharto’s favour after he sued Time magazine for a 1999 article that alleged a corrupt amassing of a $15 billion family fortune. Suharto was awarded about $A125 million in damages.

Of course, muzzling the media is a key strategy of dictators.

That case is under appeal to the Supreme Court of Indonesia and with any luck Time will be successful.

But it will be small joy for the families of victims who will see justice escape them as Suharto dies in his bed surrounded by doctors, family and friends.

Beechworth

To this day I cannot swallow sweet soft drink. It makes me sick.

The events which caused this aversion were nearly 40 years ago, in January. And the heat of January, like this week, always reminds me of them.

I got a holiday job at Murray Breweries in my hometown of Beechworth. The brewery was hounded out of beer production in the 1920s by the temperance movement. In the 1960s it produced soft drink, particularly lemonade and its unique portello.

Nowadays it produces gourmet cordials.

Workers were allowed to drink as much soft drink as we wanted. In the factory heat you had to drink it however sick of it you were. We worked from 6am to 6pm with an hour for lunch.

I started sorting bottles: screw tops, crown tops, large, medium, small, paper labels, ceramic labels and so on. They then went to a bottle-washing machine. You turned the bottles upside down on to moving arms each of which took four bottles through a tunnel of steam and hot water jets. There was not much to clean from most bottles, but some contained caked dirt, leftover kerosene or great globs of black mould and had to go through the washer several times.

These days it is more economic to recyle than wash.

At the other end of the bottle washer, aged wizened Charlie grabbed the empties and put them one by one into a circular machine that squirted syrup, water and gas into each bottle and took them out the other side. His body was bent to the machine.

Charlie had started work at Murray Breweries two days before World War I ended when he reached school-leaving age. He was near retirement which coincided with him being replaced by a machine.

As the full bottles were put on a table by Charlie another worker put a blank screw top on each bottle. They were then picked up by another worker who put each bottle through the screw-capping machine.

This machine was the height of a man. The worker put the bottle on a small platform at waist high and press a pedal with his foot. This caused a slowly turning brass disc with a hole in its centre to descend upon the bottle, carving grooves into the screw cap, thus sealing the bottle. The worker then took the bottle from the machine, turned it upside down to ensure it was not leaking, put it in a box and sent the full boxes down the rollers for storage.

The screw-cap machine was remorseless, repetitive, pitiless work.

Meanwhile, down at the bottle-washer I began what was to be rapid promotion – not through any special ability or agility of mine – the work was unskilled and you had to work at the speed of the machines.

I was promoted because one day the young bloke on the screw-cap machine psychoed. He threw several bottles around and stormed out. So “Bluey” who had been putting the blank caps on each bottle was promoted to the screw-cap machine and I moved from bottle-washing to the blank-cap job.

“Bluey” was terrific at the screw-cap machine. He rarely got behind. His hands, arms and feet co-ordinated rhythmically.

In my mind’s ear, I can still hear that machine – the pedal and brass disc clicked and clunked in a two-bar drumming sequence that never changed.

In my mind’s eye, though, I will never forget what happened a few days later. “Bluey” got a bit blasé. He did not quite push a bottle to the back of the machine. So when the brass disc came down the neck of the bottle did not go into the hole at the disc’s centre. So the disc squeezed the bottle till it cracked and exploded.

A piece of glass tore up “Bluey’s” forearm and a gory mix of blood and soft drink went everywhere.

And I was promoted to the screw-cap machine.

Production went on. At Charlie’s machine every now and then a weak bottle would explode, but it at least had a guard which blocked most of the flying glass.

I worked at the screw-cap machine until university started. At least I knew there was light at the end of the tunnel. “Bluey” was happy. We saw him sitting on the footpath outside his parents’ house after work some days later – left arm and hand bandaged to the elbow and right hand clutching the neck of a large bottle of Victoria Bitter. He had been given three blessed weeks on full pay away from the cursed machines. On his return to work he stayed sorting bottles.

I don’t blame the factory owners. They did what was standard practice at the time – no better or worse than anyone else.

I relate this story because I saw an utterly foolish “remember when” ditty the other day. It painted a care-free life of the good old days when kids roamed free and pesky governments and busy bodies did not nag and interfere.

These were the good old days when industrial safety was sissy, when real men smoked and when seat belts were for woozes. These were the days before busy bodies put safety warnings on things. (Yes, there are a lot of over-the-top idiotic warning labels, but there are also a lot of idiots out there.)

Yes, the good old days when kids could get into medicine bottles, when little girls with pretty frilly pajamas got burned by unguarded bar heaters and where kids could cycle with the freedom of having wind blowing through their helmetless hair.

You know, when the death and injury rate from “accidents” was about treble what it is today.

My experience was fairly small beer, but it was salutary.