Ladies and gentlemen, good morning. Thank you all for being here.

     The Joint Economic Committee sits in a very unique position, and I would suggest an ideal position to evaluate those policies' impact on our economy, particularly, in the context of the legislative intent of the authors of the policies.

     The Middle East is an area of vital strategic and economic importance for the United States. After all, in 1990-91, this country went to war against Iraq in order to ensure free access to the region's vast oil resources. We still have troops deployed in the Persian Gulf. The United States also has special relations with the State of Israel. Furthering the Arab-Israeli Peace Process has been the cornerstone of the Middle East policy of both the Bush and the Clinton Administrations. As Chairman of the Task Force on Terrorism and Unconventional Warfare, as well as co-Chairman of the Peace Accords Monitoring Group, I have had the opportunity to study closely the Middle East.

     Recently, I came across this new book-Israel at the Crossroads-published by the Ariel Center for Policy Research in Israel. The articles in this book shed new light on the emerging economic and defense trends in the Middle East, particularly in the context of the Arab-Israeli Peace Process. The book's premise, as stated on the back cover, is most intriguing. Let me read it to you:

Entering its 50th anniversary, Israel finds itself in a unique situation. On the one hand, it is on the verge, or the beginning, of economic growth and expansion that will make it a leading economic powerhouse. It will no longer be dependent on others, nor need foreign assistance. On the other hand, despite more than 50 years of struggles and sacrifices, the country not only faces existential threats, similar to 1947-48, but for the first time the Israeli population is vulnerable to outright annihilation by weapons of mass destruction-a threat that did not exist even during the darkest days of the War of Independence. The profound quandary facing Israel is what path will Israel follow? Will it be a path leading toward security, stability and economic growth? Or a path of capitulation and destruction? The great absurdity in all of this is that the 'peace process' that should have brought Israel into the former state, is actually expediting its succumbing to the latter state.

     My goal in these hearings is to further investigate the economic and defense trends in the Middle East, particularly the ramifications of the Peace Process, and to shed light on these important issues.

     Therefore, I'm pleased to welcome to the Committee an extremely knowledgeable group of panelists. First, we are going to hear from four of the experts who contributed chapters to the book, Israel at the Crossroads:

     Dr. Martin Sherman teaches political science at the Tel Aviv University. He acted as a ministerial advisor in the 1991-92 Shamir government. He also served for several years in various defense related capacities. He is the author of numerous articles and two forthcoming books on international and Middle East conflicts.

     Col. (Res.) Yoash Tsiddon-Chatto was a member of the 12th Knesset and of the Israeli delegation to the Peace Talks in Madrid back in 1991. Among his numerous positions, he was the chief of planning and operations requirements of the Israeli Air Force in the mid-1960s, and a member of the Raphael advisory board in the early 1990s. He publishes extensively on security issues in Israel and abroad.

     Dr. Eliyahu Kanovsky is a Professor of Economics at the Bar Ilan University, near Tel Aviv. He is also a Senior Research Associate at the Begin-Sadat Center for Strategic Studies, and the Ludwig Jesselson Visiting Professor of Economics at Yeshiva University in New York. He is the author of numerous books and scholarly articles.

     Dr. Talia Einhorn is a Senior Lecturer-in-Law at the Israeli Center for Academic Studies and is affiliated with the University of Manchester in the United Kingdom. She is currently on a sabbatical, doing research in the Max Planck Institute for Foreign and Private International Law in Hamburg, Germany, as well as the Hague Academy of International Law and the Asser Institute for Private and Public International Arbitration and European Law, both in Holland. She is also the author of several books and scholarly articles.

     In addition, we are going to hear from Dr. Robert Z. Lawrence. Dr. Lawrence is the Chairman of the Project on Middle East Trade at the Institute for Social and Economic Policy in the Middle East, the John F. Kennedy School of Government, Harvard, where he has conducted several studies on trade and economic relations between Israel and its neighbors. He is also the author of several books and scholarly articles.

     I look forward to the enlightening testimony of each of our panelists.

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