Iran Is Just an Excuse for the Gulf to Embrace Israeli Tech

Israeli innovation, including, alas, its cyber-hacking abilities, is what makes it such a desirable partner for the UAE and Bahrain

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Jan. 13, 2015, file photo released by the Iranian President's Office, President Hassan Rouhani visits the Bushehr nuclear power plant
President Hassan Rouhani visiting the Bushehr nuclear power plant, Jan. 13, 2015Credit: Mohammad Berno / Iranian President's Office / AP
David Rosenberg
David Rosenberg

If they had invited all the people responsible for the Israel-Gulf peace accords to Tuesday’s White House signing ceremony, there would have been places of honor for Iranian leader Ali Khamenei, whose hegemonic aspirations drove the Gulf States into with Israel, and Palestinian President Mahmoud Abbas, whose hapless leadership let the Palestinian issue fall by the wayside.

In any case, they probably would have RSVP’d a no. But a third candidate, and one no less deserving, would no doubt have accepted: any one of tens of thousands of engineers and entrepreneurs working at Israeli startup companies. If the White House wanted to be a little perverse but coldly upfront, it could have invited Shalev Hulio, the public face of NSO Group, the Israeli company whose sophisticated spyware has made it a favorite of Gulf regimes.

The undeniable fact in the year 2020 is that high-tech is not only the sin qua non of a thriving, globally competitive economy, it has become a powerful diplomatic and military asset. Israel’s status as a technology power punching far, far above its weight in terms of normal economic measures such as GDP and population has enabled it to foster ties with emerging powers like China and India and older economic leaders like Japan and South Korea. Now it has started to play a role in the Middle East.

In the case of the Asian powers, it’s the technology itself that serves as the main catalyst. They see Israeli innovation as a way of moving their industries up the value chain and staying competitive and solving problems like water shortages and food supply. Ideally, they want to learn from the Israeli experience of how to create an innovative economy of startups.

The second technology catalyst is less benign but no less important when it comes to the Middle East, namely Israel’s abilities in artificial intelligence and the like. Israel is regarded as a valuable partner in countering Iran not because the United Arab Emirates or Bahrain expect the Israel Defense Force to be dispatched to the Gulf but because of our intelligence-gathering and cyber warfare capabilities, the latter of which were demonstrated last May when Israel reportedly shut down the Iranian port of Shahid Rajaee for several days.

Under the circumstances, no one should be surprised that long before the ties became official, a critical component of Israel’s quietly developing relations with the Gulf was selling them hacking tools. It was a nasty business, given these countries’ record on human rights, but a critical one because it was the card Israel had to play to help win their friendship. In that regard, the Palestinian card and promises about annexation was little more than a joker.

Feel the magic

But back to the business side of tech. It’s no coincidence that UAE and Bahrain are the countries that have normalized relations with Israel. Both aspire to remake themselves economically, away from reliance on oil and gas and towards more diverse economies based on tourism, trade and most of all, technology. Like China and India, they don’t just want deals with Israel tech companies. They want some of the Startup Nation magic to rub off on them, so they can foster their own technology sectors.

For that reason, there is every reason to expect that these agreements, in contrast to the ones Israel has with Egypt and Jordan, will go much deeper, encompassing real business ties and tourism, maybe even cultural exchanges. Israel was able to strike a natural gas deal with Egypt because all it involved is negotiations between a few executives and government officials and then the gas started getting piped over the border. Tech is different: It is as much about people as it is about silicon and software – one doesn’t happen without the other.

Netanyahu predicted on Tuesday that the agreements herald “a new dawn of peace” that “will eventually expand to include other Arab states, and ultimately it can end the Arab-Israeli conflict once and for all.”

Perhaps, but at present, the UAE and Bahrain’s technological aspirations make them outliers in the Middle East; the great majority of regimes may talk the tech, but they don’t walk the wafer. The political calculations that prevented the first round of peace agreements with Egypt and Jordan from evolving into a broader Middle East peace have not changed.

Saudi Arabia is one country that might normalize relations with Israel and if it did it would be a major achievement, and Saudi Arabia is a much bigger and more complicated country than the pint-size Gulf emirates. There have long been covert relations, with cybertech being a critical part of it: As Haaretz revealed today, Riyadh bought phone-hacking technology from an Israeli company.

Crown Prince Mohammed bin Salman is anxiously trying to propel the kingdom into a new era in which oil will play second fiddle to high-tech and other sectors. That’s been the underlying motivation behind reforms such as allowing women to drive and clamping down on the religious police, to bring ordinary Saudis into the 21st century and turn them into material for a knowledge-based economy.

Not everyone is fully on board this grandiose project. King Salman is still the official ruler of the country and reportedly is unwilling to sacrifice the Palestinians just to help advance his son’s high-tech dreams. Israel may have to wait a little longer for that big prize.