On my recent visit to the Middle East, I was impressed by the confidence and willingness of the Egyptian and Israeli governments to participate with the private business sector to restructure their economies, now designed for war, to build peace. After 31 years of war these countries are economically exhausted. The financial burdens of warfare handicapped the development and expansion of social programs to deliver the benefits of modern science and technology to Egyptians and Israelis. Both countries amassed gargantuan foreign debts to pay for weapons rather than industrial projects and agricultural production.

There is much the United States can do to help correct this distortion. Thirty-eight million Egyptians constitute the largest single market place in the Middle East. Vast potential exists to develop new industries and revitalize existing plants to create labor-intensive employment for an expanding work force. An injection of foreign capital would allow new irrigation projects to transform arid desert land into food production. Both multilateral and bilateral development finance could reinforce Egypt's development efforts to give the people a stake in peace: low-cost housing; the modernization of city services, and response to other basic needs of rural and urban life.

Poor in natural resources, Israel is fortunate to have a highly skilled labor force. Enchanced strategic security resulting from peace from Egypt is a magnet to attract foreign investment and loans. New plant and capital spending would create jobs, increase productivity and expand exports.

The economics of both countries are to an important degree complementary. Israel's desire for access to a Middle Eastern marketplace is matched by Egypt's need to acquire Israel's advanced technology, especially in agricultre and irrigation. Opportunities exist for joint investments and mutual trade. It will signify the withering away of the isolation and mistrust that divided these two nations.

We should encourage joint research and management programs at American, Egyptian and Israeli universities as a step toward regional cooperation. The Technion University of Haifa has successfully proved that advanced Western technology can be adopted and managed to suit the needs of development countries like Egypt and Israel.

The United States has a right to expect that our major trading partners in Europe and Asia join in the business of peace. The United States, Egypt and Israel should initiate a Bank for Middle Eastern Development and invite the participation of the European Community, Japan and those Arab countries who acknowledge the movement toward peace. The precedents and mechanics for this project are outlined in the African and ASEAN Development Banks.

International economists and regional specialists in the World Bank and the IMF could propose programs to improve transportation, modernize telecommunications, develop water and energy resources, stabilize banking services and money markets, and promote tourism. The billions of marks, yen, pounds and dollars required do not begin to equal the cost of the last Arabb-Israeli war.

These are the unglamorous technical chores of making peace work in the land holy to three great faiths-yet poisoned by war. An economic renaissance in Egypt and Israel will permit their governments to make the political compromises necessary for peace.The inhabitants of the West Bank and Gaza would secure a means to express their national identity through participation in a regional development fund.

Shifting political alignments in the Arab world cannot politically or economically divorce Egypt from the Middle East. Egypt is a natural outlet for Arab foreign investment, and the Middle East is the natural market for Egyptian goods. The adverse political reaction to the peace treaty, in certain Arab countries, cannot deny the economic, geographic and demographic realities of the region.

With the financial backing to the United States and the West, the recent passage of an Israeli freighter through the Suez Canal will ultimately lead to the great capitals of the Arab world. This process is the business of peace.