Israel stands at a historic crossroads with broader implications than the current war in Gaza. The decisions of the Israeli government in the near future will shape the American defense alliance in the Middle East and impact the weakening of Iran and the stability of the global economy.
In the current war, Iran is a dominant hostile player toward Israel and the US through its funding of proxies in the region. Therefore, Israel is taking steps to weaken Iran in the region and globally. A normalization agreement with Saudi Arabia will advance this mission, improve the region’s economy, and impact the global economy.
Tehran understands why normalization agreements are so important to Israel, the Saudis, and especially the Americans. Some will argue that these agreements foster increasing aggressive hostility from Tehran because it knows that signing the normalization agreement will make it difficult to implement the Islamic Republic’s malicious plans. Iran knows well that its regional legitimacy will fade, the Western defense alliance will become stronger, and it will create a strategic envelope based on a regional coalition with the US, as it was during the last Iranian attack on Israel.
Saudi Arabia’s role is crucial in the Arab world due to its political, economic, and religious significance, including the fact that it is home to important Islamic sites.
Recognizing Israel’s legitimacy will impact the Arab world and the Western defense alliance in the Middle East. The recent normalization agreement with Israel aims to counter Iran’s influence, alongside China’s growing presence. Despite challenges such as Saudi Arabia’s demand for a Palestinian state, which is problematic for Israel – and rightly so – Israel must capitalize on this opportunity and negotiate effectively to secure benefits from this agreement. Normalization with Saudi Arabia has many advantages, primarily economic ones.
As of 2022, Saudi Arabia holds the title of “largest economy in the Middle East,” according to the World Bank, with a GDP of about $ 800 billion. This economy is based mainly on its oil reserves and less on technological developments. Therefore, there is a golden opportunity for Israel to open the Saudis’ doors to Israeli companies specializing in technology, thereby opening up a new market for manufacturers and extensive exports. The Saudis’ interest in technology and renewable energy will greatly contribute to Israel on the economic level and also save Saudi Arabia from the field in which it has lagged behind.
In 2016, Saudi Crown Prince Mohammed bin Salman (MBS) declared “Saudi Vision 2030,” which aims to end the kingdom’s dependence on oil sources and to provide other economic sources. The Saudi kingdom is aware that the price of oil is subject to sharp fluctuations over the years; and that oil is ultimately a depletable resource. Normalization will open both countries to new markets and cooperation in the fields of water, energy, and hi-tech.
Moreover, it will reduce the security expenses of the countries involved, since the agreement will defensively secure their position in the region.
The importance of agreement for the US
But why does the US want this agreement so much?
Beyond President Joe Biden’s apparent desire to register such an achievement ahead of the upcoming elections in November 2024, the US wants to promote economic development and prosperity in the Middle East that will include an infrastructure and trade corridor starting from India, passing through Saudi Arabia, the UAE, Jordan, Israel, and even reaching all of Europe.
The American administration sees this economic plan as a serious game-changer that will affect the integration in the Middle East and the entire Western economy, namely Europe.
The “India-Middle East-Europe Economic Corridor” initiative, which the American administration wants to promote as quickly as possible, will include road and rail routes that will transport various goods and oil that will enrich Western economy, cause a significant drop in prices that will also reach Europe, and positively affect the global economy.
Overall, the interests of the three leaders intersect: MBS seeks to portray himself as a leader confronting the region’s challenges while heavily relying on the United States; Biden aims for significant international achievements ahead of the elections and to execute a project that would change the region and the world economy; and Israeli Prime Minister Benjamin Netanyahu sees an opportunity to advance Israel’s economy and strengthen its long-term security. Netanyahu must make tough decisions and take appropriate steps for the diplomatic and security development of Israel, the Middle East, and potentially the whole Western world.
The writer has extensive experience in the marketing and public relations industry and hosts a podcast on government issues. He is in his final year of his BA in Government, Diplomacy and Strategy at Reichman University and is a fellow of the Argov Program in Leadership and Diplomacy.