UAE, Israel and the Economic and Strategic Benefits of Normalization of Relations

Introduction

The formalization of ties between the UAE and the Israel stands to benefit both states in numerous ways. One of the primary ways in which the two states will gain is through the economic boost that the relationship will provide each. Sales of oil from UAE to Israel and sales of agricultural technology from Israel to UAE will provide a win-win situation for both. The two are expected to collaborate more closely on security matters as well, which will help the region to combat terrorism and the war on the drug trafficking. Tourism is expected to pick up between the two states, which will improve the domestic economies of each. And a new era of diplomacy appears to be in the making now that the Accords have been signed. It is very likely that more Gulf States will come into this new spirit of tolerance and friendly terms now being manifested between UAE and Israel.

Economic Benefits

The economic benefits of the normalization of relations between Israel and the UAE are one of the most important considerations that can be made regarding the Abraham Accords. The main economic boost for Israel is the fact that the UAE is an oil-rich Arab state, which means there is plenty of money to invest in Israel and plenty of oil for Israel to obtain through negotiated terms. Israel itself offers a boost to tourism in the UAE as well as access to its high-end technological developments (France 24, 2020). As France 24 (2020) reports, from oil to tourism to cutting edge technologies, the two countries hope to benefit from the ripple effect of their "historic" agreement. The UAE has seen steady growth in its economy in recent years, but in the quarter preceding the signing of the Accords, its economy experienced contraction by 3.5% for the first time in years. The deal between UAE and Israel thus gives UAE the opportunity to get its economy growing again in a big way (France 24, 2020). The UAE views Israel as an oil-hungry customer that would enable the Gulf State to increase oil exports and bring in additional revenue. Additionally, it stands to benefit from Israeli tourists looking to experience Dubai for the first time. Advertising for tourism in the UAE is already underway in Israel thanks to the Accords, and this means big incentives for the Gulf States local businesses.

Likewise, Israel sees the normalization of relations as a major boon to its own economy: Israel's Channel 12 television reported that the economy ministry had estimated exports to the UAE could reach between $300 million and $500 million a year (France 24, 2020). It also expects up to $350 million in investments from the UAE annually, particularly in the sectors of cyber industries, medical equipment, financial technology and communications (France 24, 2020).

Over the past two decades, Israels Foreign Ministry has helped Israeli companies arrange business deals with other firms in the Arab Gulf States. The Abraham Accords will facilitate and enhance this trend dramatically by opening the door for easier business relations and economic opportunities on both sides. One example is the Israeli start-up company Bo&Bo, which had for two years been trying to distribute its advanced physiotherapy equipment in the UAE through third parties (France 24, 2020). According to the companys founder, It was a huge headache as you had to manufacture it in a different country, but with the signing of the Accords things have accelerated, with Bo&Bo having negotiated a first contract in the UAE to distribute its Made in Israel products there over the next three years (France 24, 2020).

The economic opportunities do not stop there, however. The Atlantic Council reports that Israel and the UAE will exchange expertise to seek COVID-19 treatments and cures, reliable food and water sources as well as increase standards of living across the region and grow entrepreneurship and investment (Grathwohl, 2020). Energy sector cooperation and the expansion of venture capital between the states indicates that the Abraham Accords will be a huge win-win for both nations. Moreover, by normalizing relations, the UAE makes it more possible to receive Israeli expats for its own industries and to bolster its economy by forging new pathways with other countries thanks to normalized relations with Israel (Grathwohl, 2020).

Enhanced Security

Security is also a big benefit of the Abraham Accords, according to the Trump Administration, which helped to broker the deal. As the United States Institute of Peace points out, the Trump administration has prioritized improving Israels relations with the Gulf as a part of its regional security agenda (particularly the effort to counter Iran) and its effort to resolve the Israeli-Palestinian conflict (Barron, 2020). The agreement enables the UAE and Israel to coordinate more closely on security matters regarding threats and opportunities in the Middles East. Israel has long had an active interest in enhancing its security strategy in the region, and its new formalized with relationship with the UAE bodes well for its plans.

Cafiero and Sudetic (2020) note that the security interests of...…benefit from this agreement (Ng, 2020). The key to advancing diplomacy now will be a focus on learning from one another. Bin Touq states that learning in various sectors will advance the aims of both states and help to bring about a wider and more lasting peace in the Middle East.

The diplomatic nature of the Accords will also serve as an invitation for other Gulf States to adopt a similar approach with Israel. It may even serve to bring Palestine to the negotiating table with Israel, once it sees that its former allies are now entering into formalized relations with Israel. Palestine has relied up Arab aid for years, but if a new environment of diplomatic relations puts a cap on this aid, Palestine may be obliged to face a new reality.

The relationship between the UAE and Israel is rooted in a new kind of optimism in the Middle East. Alexander (2020) states that according to His Highness Sheikh Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the UAE agreement with Israel symbolizes cooperation and setting a roadmap towards establishing a bilateral relationship. Moderation and tolerance are going to be the buzz words going forward, as states look to move past historical trauma and invest in a future of collaboration and formal ties. As Alexander (2020) notes, a shift in the power balance in the Middle East has enabled the UAE to step into a vacuum and make its presence felt. The country has shown that it is willing to take risks in the interest of peace and has publicly positioned itself by engaging directly with a peace process rather than be content to generally sit on the sidelines or wait for the US or other external powers to take the lead. This emphasis on peace will likely lead to greater diplomatic relations among Israel, UAE and other Gulf States going forward.

Conclusion

The formal relationship between UAE and Israel may be the dawn of a new era in the Middle East. While these two states have worked together in the 21st century, it is only now that their relationship is now formal. This will bode well for each state in terms of growing tourism and enhancing the economies of one another. UAE now has a new outlet for exporting oil, and Israel now has a new customer base for its agricultural technology. Tourism will pick up between the two, which will help the cultures of both to learn from one another and which will support…