The Gulf states, led by Saudi Arabia and the United Arab Emirates, are offering a grab-bag of economic goodies if Israel will make some gestures for the sake of the Palestinians, the Wall Street Journal reported on Monday.
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Right now, the deal isn't even on paper yet, but things change rapidly in the Middle East and there's a reasonably good chance that it could become a solid offer.
The Palestinians have long ceased to be the center of attention in the Arab world, which has bigger problems like cold war with Iran. Israel and the Gulf states are already quietly cooperating on security issues. It would be natural to raise the relationship another notch.
Actual diplomatic relations are still something for the distant future. Meanwhile, the sheikhdoms are proposing a package of economic concessions, which include lifting some trade restrictions. For example, they would allow direct telecommunications with Israel, give Israeli airlines over-flight rights, issue visas for visiting Israeli sports and trade delegations, and an unspecified opening of the region to trade and investment.
Up in flames
Since Shimon Peres’ vision of a New Middle East went up in inglorious flames, few people in Israel have given much thought to what it would mean to do business with the Arab world. The little we do right now is highly problematic (like selling surveillance technology to Saudi and other repressive governments) or fraught with peril, (like the agreement to import Egyptian natural gas, which literally went up in flames).
Most of the Middle East is poor and undeveloped, and much of the rest in a war zone. The Gulf economies are the one exception, which makes them an interesting proposition.
In the Arab Middle East, these are the only countries that could be considered developed in terms of per capita GDP, so Israel’s high-tech economy could be selling them products and services.
The Gulf nations are not the next China, or even the next Turkey. Their consumer markets are tiny, and are less sophisticated economically than their GDP figures suggest, because, they are nearly all reliant on oil. And with oil prices so low, the Gulf’s economic outlook is poor: The International Monetary Fund last month slashed its growth outlook for the region for this year to a measly 1.9%, from 2.9% as recently as October.
Nevertheless, if the concessions are offered, Israel would be wise to take them -- not because it will be a boost to business but because it will mark another step towards Israel’s integration into the region, which is something we should be aspiring to.
But my guess is that we won't seize the opportunity, because of what we will have to give back in return.
Parsing 'settlement freeze'
The discussion paper says the quid pro quo for the concessions is an easing of the blockade of the Gaza Strip and a freeze on settlement construction in “certain areas” of the West Bank.
Interestingly, according to the Journal, the Gulf’s leaders don’t honestly think an Israeli-Palestinian peace deal is imminent, and the concessions they are reportedly seeking aren’t designed to help the peace process along. Rather, they give them political cover for expanding relations with the Jewish state.
You can’t just give something to Israel in exchange for nothing; you have to pretend you have the Palestinians’ back.
Easing the Gaza blockade might not be problem: as with everything else, it all hinges on the details. But a settlement freeze? That's a non-starter.
From the point of view of the settlers and their allies, there are different kinds of settlement freezes. When Trump asks for one it’s sort of okay because he is a dear friend of Israel's who would build the next Trump Tower in Yizhar if only he could get the Russian mob to finance it. When Barack Obama called for a settlement freeze, it was proof positive he was an anti-Semite hell-bent on destroying the State of Israel. If Saudi Arabia's King Salman gets one, we’ll be only one step away from the apocalypse.
A deal like this would have to be public. How can Israeli businesspeople start appearing in Dubai or, heaven forbid Jeddah, unless a deal is out in the open? Bibi would have to get his cabinet behind it and the political constellation being what it is, with anyone and everyone beholden to the far right, that’s hard to imagine.
So even if the Gulf states do make an offer, there’s little chance Israel will accept it. Not because it's not in our strategic interest, not because it will harm the security of the State of Israel – it might even enhance it and maybe provide some business opportunities along the way. It will be because the government is held hostage to the interests of the settlers, whose needs and fears (rational and irrational) take precedence over any and all other considerations.