Analysis

Israeli-Emirati deal will consolidate regional divisions, open possibility of economic integration

  • Middle East
  • Political and Economic Risk Consulting
Graham Griffiths

Graham Griffiths

Israeli-Emirati deal will consolidate regional divisions, open possibility of economic integration

 

The 13 August agreement brokered by the US between Israel and the UAE to move toward formal diplomatic relations brings into the open a regional realignment that has been progressing steadily in the background for years.

  • Despite Israel’s concession to temporarily halt its annexation of portions of the West Bank (Palestinian Territories), the deal will contribute to the abandonment of a two-state solution.
  • More Arab states will follow the UAE’s lead, with Bahrain and Oman most likely to follow suit immediately. Saudi Arabia will establish relations with Israel in the coming years.
  • A strong regional axis will continue to consolidate around opposition to Turkish, Iranian and Islamist influence. Moreover, the UAE-Israel agreement also opens up the possibility of deeper economic integration spanning the Eastern Mediterranean and Gulf. 
  • Turkey and Iran find themselves further isolated owing to this agreement: both are suffering from worsening relations with non-regional powers, and their regional partners, such as Islamist movements and Iran-backed militias, are confronting economic crisis in the states they control. 

Palestine

The implication of the agreement for the Palestinians was best reflected in the fact that Palestinian leaders claim they were not informed of it beforehand. Ramallah can continue to rebuff efforts by the US and others to impose increasingly unattractive peace agreements, but the Palestinian Authority is viewed as intransigent and feckless by many Arab governments. The Palestinian cause continues to arouse deep popular sympathy in much of the Arab world, but such sympathy has weakened over the last decade owing to widespread political upheaval and civil conflict, thereby detracting focus from Palestine.

Nevertheless, the Palestinian issue will not disappear in the coming years. The Israeli right’s belief that the Palestinians can both be denied a state and denied political rights within Israel will ultimately become untenable. The delay to the annexation of portions of the West Bank (Palestinian Territories) won by the UAE in exchange for moving toward normalisation does not change the fact that the two-state solution is dead. The recognition of its lack of viability will cause its proponents to shift to emphasising Palestinian rights (potentially within Israel), rather than a Palestinian state, in the coming years. 

Crack in the wall

Until the UAE, no Arab state had followed Egypt (1979) and Jordan (1994) in establishing full diplomatic relations with Israel. The 2002 Arab Peace Initiative proposed the formal recognition of Israel by the remaining Arab League states in return for a resolution to the Israeli-Palestinian issue, to no avail. Numerous Arab states have developed pragmatic, informal relations with Tel Aviv – generally centred on security and intelligence cooperation – and some have flirted with direct ties – both Oman and Qatar have previously had trade relations with Israel. Abu Dhabi itself has edged progressively toward this outcome, permitting an Israeli mission at the intergovernmental International Renewable Energy Agency, which is headquartered in Abu Dhabi, and accepting an Israeli presence at the Expo 2020 event in Dubai (now postponed until 2021). 

Abu Dhabi’s decision is likely to prompt other states to follow suit. Bahrain and Oman were quick to praise the move and have been the Gulf Arab states most openly moving toward formal ties with Israel; they may well embark on discussions with Tel Aviv in the coming months. Saudi Arabia, which is a close partner of the UAE, almost surely endorsed the move privately but will move more slowly publicly, given its stewardship of the Arab Peace Initiative (which calls for a two-state solution) and King Salman bin Abd al-Aziz Al Saud’s scepticism of moving precipitously on establishing ties. Nevertheless, given the close coordination between Riyadh and Abu Dhabi and the likelihood that Saudi Crown Prince Mohammed bin Salman bin Abd al-Aziz Al Saud has few objections to normalisation, Saudi-Israeli relations in the coming years are, as Trump’s senior adviser and son-in-law Jared Kushner put it, an “inevitability”. 

Qatar will be a curious test case. Doha could move to match the UAE’s initiative in order to ensure continued support from Washington amid its neighbours’ boycott. Israel would be amenable to open relations with Qatar, but the emirate will not relinquish its ties to Turkey and Islamist groups, which will limit the extent of a potential relationship with Israel, in contrast to the UAE. 

New regional order?

Although Israel and several regional states have common national security interests, Tel Aviv’s diplomatic isolation has prevented their formal alignment. These shared stances include an antipathy to Iran and political Islam and concerns over the security threat posed by extremist militancy, which has given rise to considerable backchannel cooperation. The normalisation of ties will open space for deeper and broader cooperation.

The UAE has come to view Turkey as one of its principal regional rivals due to Ankara’s support for political Islam, its backing of Qatar against the Saudi- and Emirati-led boycott, and its efforts to project power in Libya and the Horn of Africa. Abu Dhabi’s opening to Israel now places the emirates within a coalescing coalition of countries – including France, Israel, Greece, Cyprus and Egypt – that opposes Ankara’s aggressive maritime claims in the Eastern Mediterranean. The UAE has overlapping stances with these countries on other issues, including with France and Egypt on Libya and with Israel on Iran, and UAE-Israeli normalisation thus strengthens the UAE’s web of partnerships on these key foreign policy issues.

Beyond these rivalries, the UAE’s move will push forward the possibility of deeper economic integration. There are, of course, immediate opportunities for Emirati and Israeli businesses in fields such as coronavirus disease 2019 (COVID-19) research, cybersecurity and tourism. However, a much more ambitious level of economic integration is possible over the coming years, which will be spurred by Saudi Arabia’s eventual establishment of relations with Israel. For example, there has been rampant speculation that the kingdom’s new city of NEOM on its Red Sea coast, which has plans to connect to Egypt and Jordan, was also intended to connect to Israel. Saudi relations with Israel will also open the prospect of rail links and oil and gas pipelines connecting the Gulf to the Mediterranean.

Dissenters

Iran and Turkey have been the most vocal critics of the UAE’s decision. Ankara’s position has been particularly tortuous, with President Recep Tayyip Erdogan threatening to cut ties with the UAE even though Turkey has long-standing ties to Tel Aviv. Turkey increasingly finds itself embattled on all sides: pressured by the EU over its moves in the Eastern Mediterranean, facing weakened relations with the US and managing cooperation and confrontation with Russia in Syria and Libya. 

Iran has threatened the UAE over the move, but the Islamic republic is unlikely to react directly. More broadly, the development bodes ill for Tehran. Although a Democratic US administration – a likely prospect come November 2020 -- will relax the current US administration’s “maximum pressure” campaign, Iran’s regional powerplays and “maximum resistance” to US sanctions have bought it tactical victories at the expense of any strategic achievement beyond regime survival. Iranian allies hang on to power over Lebanon, Syria, Iraq and Yemen, but these are conflict-ridden societies with bleak economic futures. Meanwhile, Gulf normalisation with Israel will further entrench the region’s US-led security architecture.

An evolution, not a transformation

Sceptics of the agreement point to the fact that it merely brings into the open a barely concealed relationship that has developed over many years. Sceptics also downplay Israel’s concession on the West Bank. Although both of these claims are true, normalisation still represents an important marker in shifting regional alignments and hints at the possibility for far more significant economic integration.

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