The 1990s decade has seen Israel being transformed to a high-tech center that challenges Silicon Valley with its high-tech industries that are growing at an exponential rate. The large number of technology-based start-up companies and their relatively high rate of success have attracted venture capital that helped fuel the development process. Israeli technology has been transferred to the world market either via mostly through transfer of knowledge to Western multinationals, but more recently, also via local production.

In recent years, Israel has also captured attention for its role as a major player in the creation and transfer of High-tech knowledge in a number of fields, the commercialization of knowledge-bases products and the relatively high rate of success of its technology-bases start-up companies (Maor, 1998). Those familiar with either High-tech, venture capital or international finance has known these facts. The purchase, last year, by America On Line (AOL) of Mirabilis, a small Israeli software company that developed the ICQ (in short for "I seek you") program, for $407M in cash served to draw attention to the Israeli High-tech industries by the general public (Domberg, 1998). The October 99 purchase of DSPC, an Israeli company specializing in cellular technology with headquarters in California, by Intel for $1.6 Billion in cash (DSPC, 1999) indicates that the purchase of Israeli firms by multinationals is becoming a trend rather than an exception. Considering these trends, it seems that Israel is rapidly becoming a High-tech powerhouse where technology is developed and transferred to the world markets via multinationals.

On the other hand, the current diplomatic dance between Israel and Syria notwithstanding, the official Syrian Web site still refers to the geographic entity on the country's southwestern border as Palestine.

The Net as liberator? Will it be a liberating force for change in the Middle East, as well?

The proponents of globalization believe it will. They see the engine of cyberspace emerging as a powerful force that can cut through hardened walls and draw old enemies together.

It sounds good on paper, but the Internet moves at a languid pace in the Middle East.

Syria is a particularly tough nut, but the situation's not much better elsewhere in the region. Consider, for example, the continuing freeze-out of Israelis by Gitex, the Middle East's equivalent of Comdex.

This is a computer industry trade show that annually draws 70,000 people to Dubai in the United Arab Emirates each year, featuring exhibitors from every corner of the high-tech universe. Given Israel's emergence as a hotbed of Internet innovation, Arab customers have an ample pool of tech talent in their backyard.

Yet Gitex didn't include a single Israel company for the obvious, old reasons.

As one industry executive familiar with the thinking of the organizers recalled to me, the question of inviting the Israelis to Gitex was only briefly considered.

"We couldn't invite them because nobody would accept them," recalled the official. "The Arabs are just not going to take the risk of directly dealing with the Israelis until the political climate changes."

To be sure, deals do get done in the region, but it's a wink-wink, nudge-nudge mode of business that insists on the 50-year Arab fiction of officially ignoring Israel.

Optimists see a glass that's half-full. They point out that the Middle East now accounts for about $100 million in e-commerce revenues. And although that's a drop in the bucket by U.S. standards, it's a good start.

Even in Saudi Arabia, they say, where the Internet was introduced only early this year, electronic commerce is finally getting a foothold.

But then you have the ridiculous spectacle of Lebanon refusing --and then subsequently allowing -- the entry of products from Intel into the country because of a ban targeting firms with links to Israel.

So the question du jour remains: On the eve of the 21st century, can the Internet remain held back by the most hidebound legacy remaining from the 19th century?

I'd like to think not, but political obstacles rooted in nearly a century of regional conflict don't get overturned easily.

Not even by the Internet.

© Copyright 1997-2004 United States Committee For A Free Lebanon. All rights reserved.

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