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May 8, 2019 | 09:00 GMT

9 mins read

Will Israel's Shift Right Slow the Warming With Its Arab Neighbors?

Israeli Transportation Minister Yisrael Katz, second from left, stands during the opening ceremony of the IRU World Congress, a regional transportation conference, in Muscat, Oman, on Nov. 7, 2018.
(MOHAMMED MAHJOUB/AFP/Getty Images)
Highlights
  • Each Gulf Arab state's strategic realignment with Israel will be affected by the election of a new right-wing government in Israel, but to varying degrees, often based on domestic constraints.
  • No Gulf Arab state will abandon its outreach to Israel, but those states more affected by potent domestic or international constraints, like Qatar, Saudi Arabia, Oman and Kuwait, will likely minimize or reduce relations to avoid a public backlash.
  • The United Arab Emirates and Bahrain will be more likely to maintain their trajectory and will be more able to reshape Gulf Arab political and diplomatic norms related to Israel.

Israeli Prime Minister Benjamin Netanyahu and his right-wing government will likely make a return to power this month or next — and, in doing so, will test the Gulf Arab states that until now have been pivoting toward closer relations with Israel. As this new nationalist government pursues policies that challenge traditional Gulf interests, those relations will be questioned. Despite Israel's increasingly right-leaning actions and rhetoric, almost every Gulf state has enough economic, security or diplomatic reasons to continue prioritizing efforts to grow positive relations with Israel rather than cutting off communication. Gulf Arab neighbors will continue making progress toward normalized relations with Israel, but that progress will be slowed because they are obligated to object to certain policies, such as the potential annexation of parts of the West Bank or another major military operation against Hamas in Gaza.

The Big Picture

After historically opposing Israel, many Gulf Arab states in recent years have reached out to the country on economic, cultural, intellectual and political levels, driven by mutual antipathy toward Iran and an acknowledgment of the waning benefits of championing the Palestinian cause. But as a new right-wing government in Israel emerges and tries to carry out policies that Gulf Arab states have long opposed, those relations will be tested — often slowing the growth of opportunities for businesses that want to work in both places.

Steps Toward Better Relations

Israel-Gulf Arab ties have evolved substantially since the Gulf states led an energy embargo targeted at Israel in 1973. But they have really moved out of the shadows during the administration of U.S. President Donald Trump. Washington is pushing for a more cohesive anti-Iran alliance (which requires regional cooperation), and changing demographics have ushered in a larger population of young people who don't hold as much resentment toward Israel as older generations do. Essentially every Gulf Cooperation Council (GCC) member — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates — shares fears about Iran's growing influence, which can be bettered countered with the assistance of Israel and its Western partners. And despite ideological differences, most countries in the Middle East acknowledge the benefits that would come with access to Israel's technology and trade.

Each Gulf state has found its own ways to build ties with Israel in recent years, either for transactional economic purposes or diplomatically strategic ones. Qatar and Oman are using Israel as a means to display strategic usefulness to the United States, Israel's closest regional ally. This is part of what propelled Oman to host Netanyahu in November, as Muscat attempts to defuse criticism that its neutrality with Iran threatens America's interests. Qatar, having been the target of diplomatic attacks in Washington by Saudi Arabia and the United Arab Emirates has also showcased its value to Israel (and subsequently the United States) by providing aid to the Gaza Strip and helping mediate between Israel and Gaza's rulers, Hamas.

Saudi Arabia, Bahrain and the United Arab Emirates, meanwhile, have sought closer relations primarily in an effort to balance Iran's expanding influence in Iraq, Syria and Lebanon. These countries have shared technology, especially cyber warfare technology, increased cultural and economic visits by representatives of both countries, started engaging in intelligence cooperation against Hezbollah and Iran, and offered rhetorical support from varying levels of officials and media personalities. The United Arab Emirates has been the boldest Gulf state in making overtures to Israel; its officials have openly questioned the value of the two-state solution with the Palestinians that Arab states have long pushed for Israel to accept, and Abu Dhabi has welcomed increasingly high-profile visits from Israelis. Meanwhile, in Saudi Arabia, younger officials, including Crown Prince Mohammed bin Salman, are pursuing closer relations with Israel for economic and security gains, while King Salman adheres to the traditional Saudi policy — aligned with the Arab Peace Initiative of 2000 — that demands a two-state solution in exchange for regional acceptance of Israel.

A map of the Middle East outlines how various pressures affect Israel's relations with its Gulf Arab neighbors.

Kuwait does not have the same geopolitical incentives to reach out to Israel as its neighbors; its traditional regional neutrality between the Arab world and Iran has not come under question by the Saudis or Emiratis, and it has no interest in being perceived as a hostile challenger to Iran. Rather, Kuwait has explored quiet business ties with Israel as part of its contribution to stabilizing neighboring Jordan's beleaguered economy. Investing in Jordan for its own economic interest has the side effect of preserving Israel's eastern border and winning points with Jordan's other key ally, the United States.

What's Changing?

All these countries have been willing to adopt less-restrictive Israel policies in recent years. But the Israel political scene has grown steadily more nationalist and right-wing over the past couple of years, encouraged by a more pro-Israel U.S. government. Now, a new right-wing, nationalist Israeli government is coming to power and is likely to chase a one-state solution that several Gulf states do not want. Netanyahu's right-wing coalition is still under formation, but the contours of its policies are clear. To maintain his frail parliamentary majority — a majority he needs to potentially shield him from prosecution for corruption — Netanyahu will face political pressure to indulge long-held nationalist, right-wing ideals. Those include policy steps that move toward partial or complete annexation of the West Bank and further settlement expansion in Palestinian-dominated areas — essentially, abandoning the two-state solution. The new Israeli government is also likely to respond more aggressively in response to another Gaza crisis.

Those decisions will test the commitment of Gulf states that had been warming to Israel but must still appeal to a public that largely supports the Palestinian cause. Some states are likely to pare back their outreach efforts to Israel, while others will have fewer reasons to do so.

A Country-by-Country Assessment

Oman has an incentive to downplay — but not cut off — its relationship with Israel to preserve the diplomatic gains it has made with the United States. In November 2018 it touted Netanyahu's visit in state media, but as Netanyahu continues to publicize annexationist-friendly policies, alarmed Omanis will drive Muscat to reconsider broadcasting any connections with Israel in state media. Still, Oman is committed to ensuring that the United States sees it as a useful ally, so as to prevent Saudi Arabia or the United Arab Emirates from gaining leverage over it in Washington. Thus, Muscat must maintain a relatively neutral stance, facilitating Israeli regional diplomacy while making sure such actions remain out of the public eye. It will likely slow — but not halt — progress toward future economic ties that would afford new trade opportunities.

Meanwhile, a right-wing Israeli government challenges Qatar's soft power strategy abroad. Doha exerts strong political control over its small population, meaning it is unlikely to face a domestic public backlash for engaging with Israel. But Qatar's soft power strategy has used the Palestinian cause to elevate Qatar's status in the Muslim world — both as a mediator and diplomatic power as well as a media giant (Al Jazeera, the state-owned media outfit, prominently trumpets Palestinian issues). As Israel more aggressively pursues West Bank annexation, Qatar must maintain its pragmatic usefulness to Israel — and thereby please the United States — while distancing its public profile from such an outreach. That will include slowing its economic outreach programs and limiting their scale.

A chart shows the current state of Israel's relations with members of the Gulf Cooperation Council.

Kuwait's vibrant free press, comparatively open parliament and large Palestinian expatriate population will make it difficult for the emirate to make substantial gains with Israel during the next government. While some low-level business opportunities may be possible, Kuwait will be exposed to considerable political risk should ties with Israel's new government be publicized.  Kuwaiti-Jordanian diplomatic and trade ties, however, can grow, especially as the right-wing government pressures Israeli-Jordanian ties and Jordan is potentially forced by its own nationalists and Islamists to risk damaging relations with Israel over the prospect of a West Bank annexation.

The Emirati strategy of building on the economic, security and diplomatic benefits of closer relations with Israel will face few barriers. Not only does the Emirati government have tight control of its domestic media narrative and political system, but its international reputation is also less tied to the Palestinian cause. Israel's profile has been growing in the United Arab Emirates, including at the Dubai Expo 2022, and will continue to grow. While some small-scale opposition over the outreach to Israel may exist both within Emirati society and between the northern emirates and the capital, Abu Dhabi, the Emirati government will be able to manage such tension and continue building up relations, including already-present cultural and trade ties.

Bahrain will also face less pressure to change its current, relatively open Israel strategy — but for very different reasons. Bahrain is already socially fractured between its Shiite majority and ruling Sunni minority, leaving little legitimacy left for the monarchy to lose by growing economic and security ties with Israel. Moreover, the Sunni minority monarchy is looking for whatever allies it can get to maintain power against Shiite agitation that is, on occasion, sponsored by Iran — and which Israeli espionage technology is useful in monitoring. Growing closer to Israel also emphasizes Bahrain's value to the United States, a critical security guarantor.

Israel's increasingly hard-line government will put Saudi Arabia in the most difficult position of any Gulf Arab state.

Israel's increasingly hard-line government will put Saudi Arabia in the most difficult position of any Gulf Arab state. Already, Saudi Arabia's King Salman has had to step in and publicly assert Riyadh's continued commitment to the 2000 Arab Peace Initiative. Salman has also slammed the U.S. decision to recognize Jerusalem as Israel's capital, seeing the move as stepping away from a Palestinian state. Salman is not acting without support; as members of a large and geographically diverse population only at the beginning of a state-led process of major social change, many Saudis remain hesitant to abandon the Palestinian cause. The more right-wing the Israeli government becomes, the more likely it is that Saudis who are still sympathetic to a Palestinian state will align with Salman's stance, rather than with Crown Prince Mohammed bin Salman and his allies, who want to start a new, mutually beneficial relationship with Israel. While this effort may continue quietly through covert meetings, Saudi Arabia will struggle to satisfy the contradictory demands of internal and external forces. Israelis dreaming of entering the Saudi market will likely have to wait a little longer.

For the international business community, this relationship stress test will limit how much various regional and global corporations can benefit from the previous pace of warming ties. Businesses can expect the United Arab Emirates and Bahrain to continue pursuing closer ties with Israel. But the countries that are constrained by domestic public opinion to slow their relationships with Israel, such as Qatar, Saudi Arabia, Oman, and Kuwait, will stymie opportunities for cross-border trade and multinational investment.

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