Henri is an economist and contributor to Nkafu policy, a think tank. Before this, he was an economist and macroeconomic strategist at Roubini Global Economics, one of the leading economic research providers in London.
Introduction
The recent rapprochement between Israel and the Gulf Cooperation Council (GCC) — Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates (UAE) — is an unholy alliance that nonetheless shows more aligned objectives than in the recent past. Since the signing of the Joint Comprehensive Plan of Action (JCPOA) between Iran and the permanent members of the U.N. Security Council, tensions in the region have grown, substantially driven by Iran as a regional actor “par excellence.” The geopolitics of the region is complex, murky and untenable, with regional alliances beginning to reflect domestic economic and political realities such as falling oil prices and the transition away from fossil fuels. The recent historic deal between the UAE and Israel was not out of the blue for many since the GCC and Israel have been cozying up to each other for several years. There were murmurings of GCC countries such as Oman and UAE contemplating opening Israeli embassies or diplomatic missions in their respective countries. The UAE officially began their diplomatic relationship with Israel on 13th August 2020 which saw the UAE recognizing Israel as a sovereign state. Besides this, both countries agreed to establish economic relations as well.
The former Egyptian President Mubarak recognized the securing of the Gaza border as indispensable to ensuring a durable end to the fighting in the Gaza strip. Despite no mention of human rights as well as the violations of U.N. Security Council resolutions, the Gulf States and Egypt appear decisive in improving ties with Israel to achieve common geostrategic ambitions such as constraining Iran and curtailing activities from non-state actors in the region. Gulf States have equally refrained from directly contravening US Middle East Policy directly for fear of losing support or risking US sanctions. GCC–Israeli ties have improved noticeably as they seek to balance economic realities and common security risks.
Israel’s Significance in the GCC Dukedom
Beyond regional politics, Israel’s technological advancements have given it a strategic advantage in the region, allowing it to benefit from better security, political stability, and economic development. The Gulf States’ increased dependence on oil has reduced their ability to adapt economically and politically to developments in the region, with a resource-strapped and sanctioned Iran directly challenging their activities in the region. This has persisted since the last decade even with Iran having little financial power and facing seclusion from the global economy and financial markets via U.S. sanctions. Hence, the recent bond appears urgent, rather than pragmatic as Iran has shown its military astuteness after it shot down a plane and attacked an oil facility in Saudi Arabia.
Tensions in the Strait of Hormuz, a global chokepoint for oil shipments as well as attacks on the Abqaiq facility, have illustrated just how exposed the region could be to a diplomatic and economically-isolated Iran. Meanwhile, the war in Yemen is equally untenable for the Saudi-led coalition that has faced infighting with Qatar despite backing the government of Yemen’s war against the Iranian-aligned Houthi rebels. This has become increasingly evident as Yemen’s government is rife with supporters of the Islah party, a known affiliate of the Muslim Brotherhood. The infighting has caused the UAE to pull its troops from Yemen, leaving the Saudi regime high and dry as well as wanting, as it grapples with an ideologically-driven militia.
The Alliance Between the GCC States and Israel
This infighting has caused the Gulf states to pursue a more forward-looking approach to diplomacy that not only seeks to achieve regional stability, but also mitigate Iranian advancements whilst prioritizing domestic objectives of an increasingly tech-centric economic development. The need to pursue independent objectives has caused Israel and the Arab countries to improve ties – and get together against their common enemy Iran. The GCC states will not be able to benefit from higher oil prices in the coming decade due to changing consumer preferences and regulatory change as well as the signing of the Paris climate accord. In order for them to thrive in a post-oil world, they will need to prioritize technological advancements across a range of sectors spanning transport, health care, and energy. This is why the UAE pounced on the opportunity and took their already amicable yet unofficial relations with Israel to the next level by establishing official diplomatic relations with the country. Both countries, prior to the deal, had “discreet contacts” in “commerce and technology.”
Israel is one of the most innovative countries in the world, ranking 10th among 129 countries in 2019. As such, Gulf countries stand to benefit from improved cooperation that will reduce the negative effects of lower oil demand on government revenues, pre-empt social change, and ensure that these countries stay competitive over the long-run. This is especially salient for countries such as the UAE that are looking to double renewable energy portfolios in the next decade and could benefit from Israeli innovation to improve carbon capture utilization and storage programs as well as precision agriculture.
It is now probable that the Gulf States reaching out to Israel in the fight against the coronavirus will likely trickle into security and intelligence sharing to technological cooperation. The reformist Saudi Prince, Mohammed bin Salman, has stated that Israel has the right to their own land whilst emphasizing shared interest with the Jewish state. Meanwhile, Israel welcomes a policy on non-aggression and could weaponize such a strategic alliance to counter its arch-enemy, a Shiite Iran. Such an outcome will be instrumental to regional stability, but it is not clear if it will suffice in permanently curtailing Iranian activity in the region. Iran and Turkey have shown their utter disgust with the UAE-Israel deal and have blamed UAE for forsaking the Palestinian people. The Iranian Supreme Leader threatened the UAE by saying “The UAE’s great betrayal of the Palestinian people … will turn this small, rich country, which is heavily dependent on security, into a legitimate and easy target.”
Letting Bygones Be Bygones?
Furthermore, Jerusalem is viewed as the gatekeeper to the current U.S. administration, and the normalization of ties, however tepid, suggests that it has the military and political ability to limit Iran’s rise. The unwillingness to put the Palestinian issue above Arab states’ interest suggests that the alliance between Israel and the GCC will likely persist over the near term – and this has been proven by the UAE-Israel deal. However, these growing Arab-Israel relations might remain under wraps for a while depending on the reaction of the Muslim world and their own citizenry to the UAE-Israel deal. If Israel is not bound by international law, there is no saying what the repercussions for any future divergence with the Gulf States will be. However, this is not currently included in GCC geopolitical and political calculus.
So far, Israel’s formal annexation of the West Bank and the absence of a temporary freeze to settlement building (all part of the Israel Palestine conflict) do not trump security concerns posed by Iran. The trust deficit between the GCC and Israel appears to be addressed due to aligned objectives concerning Iran’s regional influence, with the former being drawn to Israel’s model of development as a possible remedy to changing oil demand. While economic pragmatism suggests that the GCC states stand to benefit from such an alliance with Israel, the Arab spring was a dismal reminder of the power of protests.
As Washington’s diplomatic reluctance in the region grows, GCC member countries must determine the future of regional stability. It is not clear whether Israel’s role can be easily disentangled as that of the U.S., and whilst the future will determine the extent of GCC–Israeli relations, one cannot stress the need for caution. Overstating their alliance as a tool to blunt Iran’s military brinkmanship and self-sufficiency could be viewed as inhumane by a majoritarian Muslim citizenry. The economic relationship will, however, be viewed as necessary, since Gulf nations with sovereign wealth funds would invest in Israeli start-ups and beckon technology and skills transfers for their youth workforce.
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