Arab economists express fear that Jerusalem may try to use its new relations with Cairo to get around the Arab economic boycott of Israel by laundering capital, goods and expertise throught the Egyptian connection.
The concern, voiced at a meeting here last week of the Arab Economic Unity Council, reflects a pervasive Arab apprehension that despite Israel's chronic economic woes and Arab oil wealth, Israel's perceived economic and technological prowess could penetrate and perhaps eventually dominate the economies of the Arab world.
The 30-year-old economic boycott of Israel, although porous and applied with selective rigidity, is designed to prevent this from a happening, as well as to make life difficult for the Jewish state. Now that Egypt has signed a peace treaty with Israel, the Council is mounting a parallel boycott against Cairo, designed to punish president Anwar Sadat for his peace making and to prevent Israel from using Egypt as a launching pad toward other Arab economies.
Fakhri Kaddori, the Iraqi secretary general of the Arab Economic Unity Council, said in an interview at the close of the Council's three-day meetings:
"We have to impose and intensify the Arab economic boycott of Egypt because of the danger that Israeli goods may enter the Arab world by way of joint ventures with Egyptian companies , which may use Israeli raw materials or may be owned partly by Israeli capital. We expect this threat to materialize because of the clauses in the separate peace agreement calling for Israel's withdrawal from Sinai to be linked with normalization of economic relations between Israel and Egypt."
Although most Arab states have vowed to break off commercial ties with Egypt, some Arab countries, such as Oman and Sudan, have maintained their economic and political links with Cairo.
This means that Israel can try to penetrate Arab state through joint ventures with Egypt that route products via third-party Arab countries still trading with Egypt. Whether Israel actually will seek to do this is not known, but there is nevertheless a strong feeling among Arab economists that this possibility has to be cut off.
Egypt has been suspended from the Arab Edonomic Unity Council and the Council's headquarters have moved from Cairo to Amman. Egypt also has been suspended from the Council's four pan-Arab companies and 13 pan-Arab professional, transport and trade unions.
"In the boycott, we tried to prevent the flow of Israeli goods into the Arab world by establishing Arab boycott offices abroad to be sure that foreign goods that flowed into the Arab world did not include Israeli parts," Kaddori said. "Now we also have to strengthen the boycott-of-Israel offices in the individual Arab countries, to prevent the flow of Israeli goods that pass through Egypt."
In the meantime, Egypt remains suspended from economic coordination efforts in the Arab world. It was left out of one of the main decisions taken by the Arab Economic Unity Council this week, for example: a unified tariff structure for raw materials imported from abroad to feed similar industries in different Arab states. CAPTION: Picture, Armed settlers from Israel's ultranationalist Gush Emunim hold early-morning prayer service at new Jewish outpost on West Bank, Elon Moreh, near Nablus. AP