Prof. Ferguson outlined three important economic themes that should be focused on: the dangers of a U.S. “double dip”, the disintegration of Europe, and the economic consequences of the Arab Spring.
He noted that he does not believe that any of these three issues would resolve in positive things for Israel.
“In the West, certainly in the United States, there was a great deal of optimism and an assumption that quite quickly there could be a transition to western style democracy,” said Professor Ferguson of the Arab Spring, adding: “I was always very skeptical about this.”
He said that the Arab revolutions are now in their second phase, which normally is in the form of an economic crisis.
“The economic crisis is very severe and deepening in Egypt. It’s pretty bad in Tunisia,” he said. “The only countries that are in good shape are the oil exporters, and even they have to worry.”
He predicted that “in phase three we will see radicalism making breakthroughs, because that’s usually what happens in these revolutionary crises. People are disappointed because they suddenly discover that prices and unemployment go even higher and opportunities for younger people get even fewer.”
Prof. Ferguson outlined a fourth threat, specific to Israel, in that it is isolated internationally over the lack of a peace agreement with the Palestinian Authority.
“My great fear is that Israel is on the road to becoming the South Africa of our time, facing economic sanctions which, to some extent, has already begun,” he said. “That’s something that I would be very concerned about if I was operating a business in Israel, because with surprising speed, the changing situation in the Arab world is creating opportunities for Israel’s enemies.”
The possible solution, says Prof. Ferguson, is a political change that would change the mood towards Israel in Europe and in the United States.