Stuart Diamond, Wharton Professor and Pulitzer Prize-winning former journalist for The New York Times, is author of a new book on negotiations, @font-face {
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}p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: “Times New Roman”; }a:link, span.MsoHyperlink { color: blue; text-decoration: underline; }a:visited, span.MsoHyperlinkFollowed { color: purple; text-decoration: underline; }div.Section1 { page: Section1; }‘Getting More: How to Negotiate to Achieve Your Goals in the Real World.’ A former adviser to the United Nations, Diamond’s experience across the Middle East ranges from conducting a 14-sector analysis in Jordan, including pharmaceuticals, training executives in Saudi Arabia and assisting the Kuwaiti government recover from the first Gulf War. He has long argued negotiations have not been pursued as vigorously as they could be in the Middle East peace process. Rather than an operational peace on the ground and tangible to everyday people, he says it has become a quest for ceremonial peace-pronouncements by envoys and formal treaties.

Diamond estimates sanctions are mostly ineffective and cost the United States up to US$20 billion annually in lost imports. While television and films often portray negotiators as tough and strong, Diamond says such an approach is ineffective, creating only hostility and even retaliation. Discussing the case of Libya, Diamond cites Ugandan dictator Idi Amin’s amnesty in Saudi Arabia. He believes an Arab state could successfully negotiate a similar deal with Muammar Qaddafi’s family, allowing their exit while saving face. This would be far less expensive and bloody than any other alternative, Diamond says, adding actions such as freezing assets are ineffective since the family has so much hidden money.

Diamond teaches that differences provide opportunities for profit. His book highlights studies that show work groups with varying perceptions and disagreements produce three times as many marketable ideas than consensus groups. With drastic change and protest happening across the Middle East, Diamond gives Arabic Knowledge at Wharton his perspective on the role negotiation can play to address issues.

An edited transcript of the conversation follows.

Arabic Knowledge at Wharton: What advice do you have for U.S. President Barack Obama as he develops relations with new leadership in Egypt?

Stuart Diamond: The United States needs to provide training and expertise of all kinds. We actually were asked to look at a cement factory in Egypt a few years ago for a buyer. We found out that because of the corruption, they had four times as many people working there, friends of big government, than was necessary for the practice to be profitable. So our recommendation to the client was not to buy the factory. That stuff has to stop, or else they can’t have economic growth. It starts with having a better economic infrastructure based upon how do you run a factory, how do you expand, and not loading up a business to the point where its not economical. The best thing the U.S. can do is provide people with skills.

Arabic Knowledge at Wharton: And what advice do you have for Egypt’s new government?

Diamond: Once you have the revolution, you still have to run something. You have to create the infrastructure, organize the economy and the institutions. I think that Egyptians are starting to find out that it’s a lot easier said than done. The second thing, it shouldn’t matter whether or not somebody insults someone. I think people insulting Hosni Mubarak are wasting time. They should be building the country. Why cause a fight that you already won? It’s not meeting your goals. Secondly, why is the military so upset about protestors when they have work to do? They need somebody in there to say, ‘You guys need to stop mouthing off at each other, and start getting to work.’

Arabic Knowledge at Wharton: Qatar is supplying weapons to Libyan rebels, while a ceasefire negotiation attempt by the African Union failed. Can the conflict in Libya be resolved?

Diamond: They need a decent mediator there, because as long as both sides maintain extreme positions, no deal is possible. The parties need to move incrementally towards each other. In order for Muammar Qaddafi to leave they actually have to have some discussion, in which all the parties are allowed to save face. If they continue to be emotional, no deal is possible. Other leaders like [former Ugandan President] Adi Amin left because they got a lucrative offer to go. My suspicion is it’s possible that under certain circumstances favorable to Qaddafi that he will leave. But the rebels need to understand that if they [treat him badly he will remain] entrenched. You have to have somebody in there who is smart enough to understand human psychology and what it takes for people to willingly leave. Otherwise, it’s going to be a long, long battle to force him out, whereas if they gave him some respect, it would take less time and less money.

Arabic Knowledge at Wharton: Can negotiations play a role in improving the Saudi-Iranian relationship?

Diamond: I always think negotiation is possible, almost all the time, as long as the parties are willing to take small steps. And when I say negotiation, I mean somebody from Saudi Arabia will have lunch with somebody from Iran in Paris, sometime when they’re both on vacation. If the parties are far apart you have to start with small steps, and you’ve got to find something small enough that they can do it without thinking they’ve taken too much risk. They need to get to know each other again, talk and see each other as human beings with their own sort of rights and perspectives and perceptions, and they need to be civil to each other. The notion of international name-calling and demonizing — if people want to keep doing that they’re not going to get anywhere except by force.

Arabic Knowledge at Wharton: After its violent supression of protestors, can Bahrain salvage its image?

Diamond: Don’t forget, the United States dropped two atomic bombs on Japan. Germany certainly redeemed its international image after World War II. So, you have to walk the talk, and eventually say, ‘Alright, we’ve made mistakes, we didn’t do things that were right, but were going to try things differently now.’ You’ll find that if people are honest with others about past mistakes, most people will give them another chance, as long as they see an effective, reasonable plan. I don’t think once you make a mistake you’re tarnished forever, unless you’re malicious about it.

Arabic Knowledge at Wharton: You’ve said economic reform have to be led by the people of the region rather than relying on governments?

Diamond: The impetus needs to come from the ground up just like it has in Egypt. So maybe these people who have been rioting can get together and say, ‘Okay, whom do we know that are entrepreneurs from inside and outside the Middle East that could help us?’ Forget the politicians, you don’t need any political support unless it gets in the way to build a factory somewhere and start an export program.

In the Middle East they have now seen the light at the end of the tunnel. But how do you get to the end of the tunnel? Somebody still has to do something, organize people, get an economic plan, get business plans together, build stuff, market stuff, organize a work force, and organize institutions. This is just the beginning. There’s a lot of work to do and it needs cool heads, organized minds to start and they’ve got to develop economic institutions practically from scratch. There has to be some exchange mechanism that’s not corrupt. They’ve almost got to start over again.

Arabic Knowledge at Wharton: As many institutions are being built from scratch or reformed in these countries, what advice do you have?

Diamond: My suggestion is to start small; you get a factory done and replicate it. It doesn’t take a long time to do. Technology firms like Facebook, for example, are growing in three or four years from US$1 million to US$2 billion by learning how to replicate. Whether it’s health clinics, factories or food stores, they need a series of business people. There are really smart Arab business people throughout the Middle East who can organize themselves, so I think the biggest problem the Arabs face now economically is going from rhetoric to action.

There has to be better skills within the Arab world to conduct more effective negotiations. I was invited to speak at a major Middle East conference on how Arabs can get along better with each other. In a family-owned businesses for example, people fight each other all the time… There’s a whole history [in the region] of big talk and little action.

Arabic Knowledge at Wharton: You’ve said the United States government could do more in negotiations with China. What should the Middle East do?

Diamond: The Middle East should go after China and ask them for money. When the Prime Minister of China visited the United States, the U.S. was happy they got 235,000 jobs from China. But China has been bragging that it created 11 million jobs worldwide. The U.S. should have asked for one million jobs. If I don’t meet my goals it’s always my fault because I’m the only one I control, and it’s my job to get what I want from China. It’s not their job to hand things over.

Arabic Knowledge at Wharton: You’ve argued in the Israeli and Palestinian conflict, progress hasn’t been because the wrong people are negotiating. Who should be leading negotiations, then?

Diamond: The right people that should be negotiating are moderates of each religion, not extremists from each religion. Israeli and Arab middle-class families are much closer in sensibilities than Israeli families are to the Israeli extremist who killed Israeli Prime Minister Yitzhak Rabin and Arab extremists who blow themselves up. It’s an issue of the moderates of both religions that ought to be tempering the extremists of both religions.

Arabic Knowledge at Wharton: Can you cite an example of such a scenario happening and being successful?

Diamond: In Sri Lanka, Karuna Amman, the second-most powerful figure of the rebel group Tamil Tigers, was permitted to join Sri Lanka’s government. The government offered amnesty and job training to any rebel who came back to the fold. What the government did, against the advice from people throughout the world, was to declare blanket amnesty for all the Tamil Tigers if they came back to society. This created two results: First, the problem was smaller because there were fewer rebels since so many came back. Secondly, the people who came back told the government where the others were and the government went after those extremists. So this was a negotiated settlement followed by a precise military operation.

That’s a really good model for what to do about extremists. The United States has no business solving the problems of the Middle East in terms of the extremists, because they don’t know the territory. The people that should be are the moderates. Secondly, the more you have real economic enterprises there, the better off you are. That is one of the reasons why peace hasn’t worked. What needs to happen is the Jordanian pharmaceutical industry should have an alliance with someone like Teva Pharmaceuticals in Israel. What the region needs are big joint ventures in the Dead Sea, and not just delicacies like dried tomatoes or spices. For example, a Jordanian factory could produce the pills and Teva can market them — that’s a real industry. They need to start with one factory that could be financed by an investment bank, for example. That is replicable model just like what the technology industry has done in Silicon Valley.

Arabic Knowledge at Wharton: If the region were more stable, can you give some examples of how it would benefit industries not just in Israel but the entire region?

Diamond: It will enable Israel to get involved in more labor-intensive industries with Arab labor that can grow for at least the next 10 years. More Arabs will be put to work and be able to use Israeli technology. Many of the alternative energy technologies are very labor intensive. For example, it’s very labor-intensive to install a solar array on top of somebody’s house. Windmills have numerous moving parts, and bio-energy requires a lot of setup. Installing insulation is very labor-intensive, fish farming and all these alternative activities are quite labor-intensive and with Arab labor and Israeli marketing, there’s a lot to do. Once you look at it, it’s obvious. But the reason why people don’t want to look at it is because they’re too emotional or too busy fighting over yesterday and over who gets more.

You can get water from deep drilling and desalination. In terms of solar energy projects, there’s plenty of land there. There should be desalination and deep drilling all across the Middle East, it will be able to provide a limitless supply of water. Israel also has drip irrigation technology and even if the water is brackish, you can grow saltwater plants and saltwater fish so there is plenty of opportunity there. All they need is the will of the organization. It is more expensive in capital terms, but balanced by cheaper labor and the economic benefits of peace and prosperity.

Arabic Knowledge at Wharton: You have said focusing on settlements is just a distraction from the other issues at hand, could you elaborate further?

Diamond: East Jerusalem should not be an issue. Take the Roman Catholic Church, which runs the worldwide Catholic religion from less than one square mile in Rome [the Vatican]. There is plenty of land in East Jerusalem for a Palestinian capital so why is there a dispute in the Middle East? It’s because it’s the wrong people are negotiating. In my view there is already peace in the Middle East, there are hundreds of thousands of Palestinians and Israelis that live and work together. If the negotiators from the Palestinians and Israelis had met and just had lunch for the past two years and talked about soccer they’d be farther along than where they are now. It’s poor use of negotiation, top to bottom.

The parties should first sign an agreement saying they want a Palestinian state. The next thing they need to do is decide how big the state should be and then decide what land is not in dispute. If there is land in dispute then hire people that know how to deal with land swaps. You may need to give up some settlements and move things around but that’s not a big deal, especially since less than 5% of the land are in the West Bank settlements. In China, they move entire cities. In Brazil they built Brasilia. What happens is all these people skip ahead and they’re not incremental enough. They need a to-do list, which is very incremental. Step one, okay we’re going do this, step two, how big should it be, step three, what goes where. It’s not that hard to do this, it’s hard because people are so emotional.