Israel courts the Arab economies
Mohamed Abu Shaar , Tuesday 19 Jul 2022
Israel’s attempts to bring about its economic integration into the region are likely to fail in the face of Arab opposition, writes Mohamed Abu Shaar
When Yesh Atid Party leader Yair Lapid assumed the role of prime minister of Israel’s incumbent caretaker government, several scenarios emerged about the future of Israel’s relationship with the Arab countries in general and the Palestinian Authority (PA) in particular, especially since Israel’s right wing has been in power for so long.
Lapid is the first left-leaning politician to become prime minister of Israel in 13 years, after right-wing Likud Party leader Benjamin Netanyahu served in the post from 2009 until 2021.
Netanyahu was succeeded by right-wing politician Naftali Bennett, leader of the Yamina Alliance, for one year when he formed a cabinet that he would lead for two years and then his partner in government Lapid would take over for the last two years of the government’s tenure, according to an agreement.
However, the coalition cabinet brought Bennett together with left and centre parties, with the support of that United Arab List led by Mansour Abbas, and it did not last long in the face of pressure from the right spearheaded by Netanyahu.
It duly collapsed, and Lapid has become interim prime minister until new Knesset elections slated for November are held.
Lapid’s political position is not the only reason for the momentum that began when he became prime minister. He also received a major boost when US President Joe Biden visited Israel and participated in the Jeddah Summit for Development and Security in Saudi Arabia on Saturday.
The summit also included the Arab Gulf states, Egypt, Jordan, and Iraq.
Biden’s visit, although dominated by the global energy crisis, was part of a general trend led by the current US administration to integrate Israel into the region through regional defence agreements to confront the threat of Iran.
Economic steps have been taken with some Arab countries, such as opening Saudi airspace to Israeli civil aviation. Washington believes such measures will pave the way to steps to normalise relations between Israel and some Arab countries that have not signed peace agreements with Israel, such as Saudi Arabia and Oman.
Israel is promoting these measures as the start of the normalisation of relations with Arab countries that have no political ties with it, especially Saudi Arabia. It views such normalisation as a political gain because it disconnects the Arab position from the Palestinian one.
However, Israel’s confidence collided with a unified Arab position expressed by Arab leaders at the Jeddah Summit. A political agreement between Israel and the PA based on a two-state solution that leads to the establishment of a Palestinian state within the 1967 borders with East Jerusalem as its capital is the only way to integrate Israel into the region and establish stability, they said.
This was confirmed by Saudi Foreign Minister Faisal bin Farhan at the end of the summit, who said that lifting restrictions for all airlines to use Saudi airspace was not a signal moving towards future relations with Israel.
Leader of the UAE Mohamed bin Zayed told Biden during talks on the sidelines of the summit that the Palestinians must benefit from the so-called “Abraham Accords,” a reference to the normalisation agreements signed between Israel and the UAE, Bahrain, and Morocco.
The summit was preceded by an invitation from Israeli Minister of Finance and leader of the Yisrael Beiteinu Party Avigdor Lieberman to create a Middle East Common Market that would include Israel, Saudi Arabia, Jordan, Egypt, Bahrain and the UAE.
Lieberman said this proposal “would change reality from beginning to end whether on security or economic matters”.
Israel’s Ministry of Finance prepared a report to present to Biden during his visit, suggesting the creation of a network of highways and railways in Israel, Jordan, and Saudi Arabia to facilitate trade and save billions of dollars through a direct link between the Gulf states and the Mediterranean Sea.
The Jerusalem Post said that Israel needs such projects in order to become a key geopolitical player in the region, as it seeks more influence by controlling networks connecting the world together through the Middle East. This would lead to billions of dollars in investments in Israel and greater economic openness with countries around the world, it said.
The newspaper added that the country’s Ministry of Finance believes that Israel should take advantage of the current positive climate for regional cooperation to advance proposals for networking mechanisms.
However, Israel’s focus on economic solutions and its ignoring of political issues is viewed by many as a sign that it is trying to bring about its integration into the region by any means possible without making political concessions to the Palestinians.
Wajeeh Abu Zarifa, an expert on Israeli affairs, told Al-Ahram Weekly that “Israel wants to sign security and economic cooperation agreements in the region, and it has not stopped promoting such ideas. But there is no prospect for this because of the Arab position.”
He said that Israel wants to negotiate with the Palestinians but only if there is no tangible outcome and only if it benefits Israel’s interests.
Lapid seems more open to a solution with the Palestinians than Netanyahu ever was, or was his predecessor Bennett, who adamantly refused to meet Palestinian President Mahmoud Abbas.
Israeli Minister of Regional Cooperation Issawi Frej recently revealed that Lapid has given instructions to resume the economic summit between the PA and Israel that has been suspended since 2009, the year Netanyahu came to power.
Frej said the summit would bolster the Palestinian economy by facilitating entry permits to Palestinian labour, cross-border trade, and other economic matters.
However, the heavy right-wing legacy in Israeli politics prevents Lapid from making major concessions on the Palestinian issue. His rise to power has come in extraordinary circumstances, he leads an interim government, and he is preparing for a fierce political battle in the next round of elections.
Promoting positions that are the polar opposites to prevailing trends in Israel would seriously hurt his bloc’s chances at the polls.
“Israel’s political situation is in serious trouble because of Israeli policies that destroy any possibility of peace,” Abu Zarifa said. “The economic proposals and Israeli aid package to the PA in exchange for security, or permits in exchange for calm, are small steps that make the Palestinian people more dependent on Israel.”
“They also put restrictions on the PA and Hamas, which controls the Gaza Strip.”
Abu Zarifa said that Lapid had been affected by Israel’s shift to the right, and any gamble on a breakthrough in relations between Israel and the PA that tried to broaden horizons with the Arab countries would lose as a result.
The Palestinian presidency has repeatedly said that it is impossible to achieve any progress in regional economic cooperation without progress on efforts to reach a solution to the Palestinian cause and achieve the interests of the Palestinian people.
It declared this position in opposition to Israel’s promotion of its involvement in further economic activity in the region. Hamas also supports this position.
Suhail Al-Hindi, a member of Hamas’ politburo, told the Weekly that the issue was greater than just economics. “It is a political issue that cannot be reduced to economic measures,” Al-Hindi said. “What is needed is a solution to the Palestinian cause.”
Israel is also trying to handle the Gaza Strip separately from its dealings with the PA. “We will not accept a reduced state in Gaza,” Al-Hindi said. “We will not deal with just an economic peace. The Palestinian Territories are one geographical unit. Talk about ‘facilitations’ in Gaza cannot come at the expense of strategic political issues.”
Israel’s success in integrating its economy with other regional economies will remain contingent on the positions of the Arab countries, especially in the absence of the PA being able to disrupt it.
Divisions in Palestinian ranks have made it difficult for the PA to take a unified stand towards relations with Israel and other countries.
*A version of this article appears in print in the 21 July, 2022 edition of Al-Ahram Weekly.
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