How the UAE-Israel Peace Agreement Could Shape Economic Relations
On September 16, 2020, researchers Yoel Guzansky and Ari Heistein from the Institute for National Security Studies (INSS) analyzed the potential benefits and challenges associated with the normalization of relations between the UAE and Israel. This article delves deeper into the economic implications of this agreement and discusses how it may impact regional stability.
The Historical Context
The peace agreement between the UAE and Israel marks a significant shift in the geopolitical landscape of the Middle East. While the US has long sought to exert more control over the region, the agreement offers Israel a degree of additional security and stability, and the UAE the opportunity to engage more favorably with the US and Israel. This alignment could have positive economic repercussions.
The Peace Agreement and Economic Implications
The normalization of relations between the UAE and Israel could lead to a strengthening of economic ties. The two countries have a shared interest in regional stability, which can facilitate smoother trade and investment flows. However, the path to this agreement has been riddled with challenges. For instance, the deal was derailed when the UAE requested F-35 fighter jets, an aircraft that Israel did not allow the US to provide, thus scuttling the deal.
Despite the hiccups, the formalization of relations offers a new opportunity for economic collaboration. Both countries can now explore joint ventures, trade agreements, and investment opportunities that were previously constrained by the lack of diplomatic relations. The US’s desire for stability in the region plays a crucial role here, as the normalization of relations is seen as a stabilizing factor for the UAE’s economy.
The Benefits and Challenges of Normalization
Normalization brings with it both benefits and challenges. On the benefits side, enhanced cooperation in areas such as security, intelligence, and technology can lead to more robust economic policies and infrastructure projects. For instance, the two countries can collaborate on joint transportation and energy projects that will facilitate smoother supply chains and reduce dependency on traditional sources.
However, the challenges are significant. Each country has different geopolitical interests, and these can sometimes conflict. For example, the UAE’s desire for access to advanced military technology like the F-35 fighter jets could be at odds with Israel’s desire to maintain its qualitative military edge. Another challenge is the potential for friction in areas such as West Bank annexation, which could impact the Palestinian economy and regional stability.
The INSS highlights the security and intelligence cooperation that has long existed between Israel and the UAE. This cooperation provides a solid foundation for further economic partnerships. However, as the agreement goes public, it is important to maintain certain aspects of cooperation in the shadows to avoid security threats and public friction.
The Example of West Bank Annexation
A Prime Minister Netanyahu's decision to forgo annexation plans for normalization is seen as a continuation of the "land for peace" paradigm. While this could reinforce Palestinian frustration, it may provide the UAE with significant leverage over Israeli decision-making in the Palestinian arena. This leverage could be particularly important if Israel is considering steps that do not align with Emirati interests.
The Role of the United States
The US’s role in this agreement is crucial. The UAE aims to improve its image on Capitol Hill, particularly in light of issues like the role in the Saudi-led campaign in Yemen. By strengthening its position in Washington, the UAE hopes to gain access to advanced security technology and software that the US was previously reluctant to provide.
However, the highly polarized climate in US politics means that the UAE’s close association with President Trump may continue to haunt them if Joe Biden becomes president. The normalization deal is seen as a way to secure arms sales and avoid potential delays if Biden were to pause such agreements.
Conclusion
The UAE-Israel peace agreement holds the potential to significantly reshape economic relations in the region. While there are challenges such as differing geopolitical interests and the need for careful management of sensitive areas, the benefits of increased cooperation and stability cannot be ignored. As the agreement continues to evolve, both countries and their regional partners must navigate these complexities to realize the full potential of this new phase in Middle Eastern diplomacy.