SIGNAL Note 52: Israel and the Shifting Arab World


In accordance with President Xi Jinping’s vision for well-ordered international relations, China maintains friendly relations with every country in the Middle East, a region at the intersection of Africa, Europe, and Asia. Given its central geostrategic location, the Middle East will necessarily be included in any comprehensive plan to enhance economic connectivity across the three continents. China recognizes the geo-economic importance of this economic corridor 1, one of six of the Belt and Road Initiative. While strong diplomatic ties are important to the success of the BRI, stability in the region of Middle East is also a must. For example, the Maritime Silk Road passes through the Gulf of Aden, where piracy is rampant. The BRI’s proposed high-speed rail projects are intended to pass through Turkish Kurdistan- a politically fragile area due to the presence of Kurdish statist forces in neighboring Syria and Iraq 2. To address such issues and aid in efforts against piracy, China has adopted a number of security measures, including establishing a base in Djibouti.

In addition to the importance of its geographic position, the Middle East holds significant economic importance to China. Close to half of China’s oil imports are from the region 3. Furthermore, Middle East countries present a variety of opportunities for investment. In 2017, China and Saudi Arabia signed a number of agreements valued at nearly $70 billion. 4 Such investment is part of a broader economic trend: last year, China pumped more than $92 billion into the region. With 31.9% of all foreign direct investment going to the Middle East in 2017, China’s economic commitment to the region is nearly double that of the second largest investor in the region – the UAE 5.

The Middle East, however, is changing and the seeds of a new order have begun to emerge. Unified against perceived Iranian and Qatari efforts to foment instability in Syria, an alliance led by Saudi Arabia, Egypt, and the UAE has become more receptive to elements of liberalization. In recognition of common security goals, Saudi Arabia and the UAE have begun to follow Egypt’s and Jordan’s lead in exploring cooperation with Israel. Conversely, the Kurdish question has caused a rapidly de-westernizing Turkey to align itself more closely with Iran in Syria. These developments are fundamentally changing the political paradigm of the Middle East. Within these tectonic changes lies opportunity.

Israel is a consistent bastion of stability in the region. The quartet of Egypt, Jordan, Saudi Arabia, and the UAE seek the level of security intelligence and technological innovation for which Israel is well known. This is causing these countries to consider rejecting traditional taboos and explore cooperation with Israel.

As Beijing observes the evolving dynamics of the Middle East, it sees immense opportunity. China can benefit from the changing regional alliances while at the same time contributing to stability in the region. By adapting to the rapidly shifting landscape of the Middle East, the BRI presents a significant medium to promote stability in the context of President Xi Jinping’s vision of a community with a shared future. Cultivating an understanding of the nature of the shifting dynamics in this volatile region is the key to success.

The Arab World is Changing

China’s economic outreach efforts such as the BRI and the 16+1 Initiative with Central and Eastern Europe, offers potential opportunities within the specific bilateral agreements under the guidance of broader regional frameworks. It is becoming increasingly clear that the Middle East could benefit from this approach. The Arab World has never been monolithic, but now Arab states are speaking with ever more individual voices. Their strategic realignment is in large part due to regional conflicts that have taken place since the start of the Arab Spring. Like most regional powers, the States of the Middle East will need to learn to navigate the bipolar regional dynamic that is forming.

A visible indicator of this regional shift is Arab states’ severance of diplomatic ties with Qatar in July 2017. In what has been called “the worst diplomatic crisis to hit Gulf Arab states in decades,” a Quartet of Saudi Arabia, Bahrain, Egypt, and the UAE expelled Qataris from within their borders. They went on to close their diplomatic missions in Doha, and enact an economic boycott on Qatar 6. Emirates Airlines closed all flights to the country, and the Quartet blocked Qatari media agency Al Jazeera from broadcasting within their borders. The states cited Qatar’s alignment with Iran through the covert backing of terrorism and continued efforts to undermine stability in the Middle East. This includes their support for the Muslim Brotherhood, a multinational organization which has threatened domestic order (highlighted by Egypt’s tumultuous year in 2012-2013 under deposed ruler Mohammed Morsi) and is considered a terrorist group 7.

A year on, and Qatari resistance to the quartet’s demands has only deepened this rift within the Arab World. Qatar’s response to the boycott has been to double down on its relationship with Iran. Last December, an Al Jazeera article spun the crisis as an opportunity to help “open new trade routes and increase bilateral trade from Iran, Turkey, and Pakistan to Qatar.” 8 The article reported that trade between Qatar and Iran increased by 177% in the last five months of 2017. In 2018, the Iran-Turkey-Qatar axis has only solidified further, with the signing of a trilateral transportation pact and various trade agreements 9. The most sensationalist response from the other side was in late June when Saudi Arabia announced plans to construct a canal that would render Qatar an island nation 10.

The divide connotes grave consequences for alliance networks within the Arab World. Chief amongst these is the Gulf Cooperation Council (GCC) a framework between Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE which endeavored to increase member states’ economic connectivity and serve as a platform for joint initiatives in areas such as security and transportation 11. While experts are split as to whether or not the conflict will signify the official death of the GCC, the oil organization’s strategic efficacy has certainly diminished greatly. GCC states, who are all members of the Organization of Petroleum Exporting Countries (OPEC), no longer convene independently before biannual OPEC summits to discuss strategy. As one senior source explained to Reuters, “We used to have a WhatsApp group for all ministers and delegates from the Gulf. It used to be a very busy chat-room. Now it’s dead.” 12 This strategic fracture might negatively affect China’s oil imports from the Middle East, as prices have more than doubled since the first month of 2017 13. Thus, as China’s dependency on foreign oil is expected to continue rising 14, this issue, in addition to security concerns in Syria and Iraq, might force it to reevaluate its import sources. As long as these instabilities exist, the BRI’s ability to create a lasting positive economic impact in the Middle East will be jeopardized.

Warming up to Israel

As the Quartet and its allies seek to combat the destabilizing influence of the Iranian axis and instill security into the region, they are beginning to become more receptive to an undeniable truth: Israel shares their security aspirations, and has the military, economic, and technological strength to enact a lasting positive impact on the region. The path for formal Arab relations with Israel has already been paved by Egypt and Jordan. Since the brokering of a peace deal in 1979, Israel and Egypt have enjoyed an official diplomatic, economic, and security relationship. In the ‘80s and ‘90s, ties were strengthened with the signing of a number of joint agricultural and economic initiatives 15. In 2004, Israel and Egypt established Qualifying Industrial Zones (QIZs), in which Egyptian factories manufacture products with Israeli materials. Now, over 700 Egyptian QIZ companies have exported nearly $1 billion and employed over an estimated 280,000 people. While Egypt has been more reluctant to establish people-to-people relationships between the two countries, Israel has consistently worked on outreach in this regard: for example, it has been one of the largest sources of tourism for Egypt since 1980 16. King Abdullah of Jordan, which has engaged in diplomatic relations with Israel since 1994, reaffirmed the ties between the three nations in 2017, proclaiming that “Egypt and Jordan have a special relationship with Israel.” 17

Under the surface, the seeds for broader cooperation with Israel have begun to sprout. Historically, Saudi Arabia has been in an awkwardly unspoken alliance with Israel due to both countries’ relations with the US. However, spurred by mutual dissatisfaction with the Iran agreement, Egypt has sent delegates to meet with Israel directly to discuss security cooperation 18. Since his succession to the throne in 2017, Crown Prince Mohammad bin Salman (MBS) has not shied away from Israel, affirming that “Israel’s never attacked us,” and that the two countries “share a common enemy.” 19 The UAE is in a similar position; the country sought under-the-table military aircraft/technology deals with Israel as early as during the Clinton administration. An unidentified senior Emirati official once bluntly affirmed MBS’ suggestive comments, “I can envision us being in the trenches with Israel fighting against Iran.” Furthermore, it is reported that MBS has privately expressed willingness to establish full relations with the Jewish State and that both MBS and UAE Crown Prince Mohammad bin Zayed share Israel’s discontent with the current Palestinian leadership 20.

Opportunities of the Future Dynamic

For the BRI to succeed in the Middle East, it is generally agreed that regional security is critical.

While no ideal long-term solution would prescribe rigid bipolarism that is susceptible to descend into direct confrontation, the increasingly improving relations between Israel and some of its neighbors -like Saudi Arabia and the UAE- nevertheless connotes a silver lining. The emerging paradigm provides a potential new framework for regional collaboration that could be leveraged to promote stability and security in the region through economic cooperation.

For the past two decades, Israel has covertly participated in direct intelligence sharing with Saudi Arabia and the UAE 2122. Arab states’ eagerness to cooperate under the table implied that they consider Israel to have the region’s most effective security forces. By cooperating without demanding diplomatic or any public acknowledgment, the Jewish state has demonstrated its clear willingness to rise above political animosity for the betterment of the entire region. However, the apparent antagonism has necessarily prevented fuller intelligence sharing relationships from taking root. As the diplomatic barriers between Israel and the Arab World begin to erode, one could expect more efficient intelligence coordination for regional counterterrorism and stability initiatives.

The Middle East’s crises are so acute that the international community has largely been unable to plan for the challenges that lie in the near future. For example, climate change has rendered 13 countries in the Middle East and North Africa (MENA) “water scarce”. Furthermore, the amount of freshwater per capita is expected to fall over 40% by 2050 23. This issue is poised to catalyze the displacement of millions and contribute to further political instability. Through its technological innovation, Israel has not only circumvented these climatological obstacles; it now has an excess water supply. In 2016, 55% of Israel’s domestic water was from desalination plants, and this figure is growing annually 24. 86% of Israel’s wastewater is recycled. As the Arab World’s water resources continue to diminish, Israeli technology might become a valuable antidote to a widespread humanitarian crisis in the region.

The impending water crisis also has grave implications for agriculture in the region. 30-35% of Arab countries’ food supply is already imported, and that figure is set to rise alongside population growth and water scarcity 25. It is of no help that MENA countries have an average irrigation efficiency of roughly 51% 26. Again, Israel is a stark outlier to this regional trend, as it boasts one of the world’s highest agricultural efficiency ratings, largely due to its pioneering water conservation techniques 27. Israel has already signed successful agriculture and agro-technology partnerships with nations including China, and this, along with specific knowledge of arid-land techniques, indicates that Israel will be the lifeline for Middle Eastern countries in need.

Conclusion: China’s Potential Role

The Middle East is changing. Through economic cooperation, Israel and the Arab world are becoming increasingly interconnected and interdependent. For example, Israel and Jordan are cooperating on the construction of a new bridge across the Jordan River that will link both Nations’ industrial zones; and Israel recently signed a $15bn deal to export 64BCMs of gas to Egypt over the next ten years. China’s ability to help foster cooperation between Israel and the Arab World through investment cannot be understated. Chinese investment could aid in stimulating the increased capacity necessary for Israel to become a land bridge for trade between Europe and Jordan and the Gulf states- boosting economic connectivity while supplementing traditional trade routes between East and West. 28

China has the opportunity to further enhance stability and security in the region by adopting a multilateral cooperation framework with Israel and Arab states – for example, green-house technology to help a country meet food security needs in Egypt. In doing so, China would be facilitating development cooperation, helping to redress the pessimistic narrative which has characterized the Middle East for generations, replacing it with opportunities for an advanced local coalition to introduce stability and deliver on the global economic potential which it has always possessed.

  1. http://china-trade-research.hktdc.com/business-news/article/The-Belt-and-Road-Initiative/The-Belt-and-Road-Initiative/obor/en/1/1X000000/1X0A36B7.htm
  2. http://www.maritimesilkroad.org.hk/en/quickFacts/mapsOfMaritimeSilkRoad
  3. http://www.worldstopexports.com/top-15-crude-oil-suppliers-to-china/
  4. https://thediplomat.com/2017/08/closer-ties-china-and-saudi-arabia-sign-70-billion-in-new-deals/
  5. https://www.middleeastmonitor.com/20170724-china-is-largest-foreign-investor-in-middle-east/
  6. https://edition.cnn.com/2017/06/05/middleeast/saudi-bahrain-egypt-uae-qatar-terror/index.html
  7. https://www.theatlantic.com/international/archive/2017/07/muslim-brotherhood-qatar/532380/
  8. https://www.aljazeera.com/news/2017/12/turkey-iran-pakistan-big-trade-boost-qatar-171203175422055.html
  9. https://financialtribune.com/articles/economy-business-and-markets/84152/iran-qatar-boosting-economic-cooperation
  10. https://www.bloomberg.com/news/articles/2018-06-20/saudi-moves-forward-with-plan-to-turn-qatar-into-island
  11. https://lobelog.com/can-the-gcc-survive-the-qatar-crisis/
  12. https://www.reuters.com/article/us-opec-gulf-qatar/opec-chatroom-dead-as-qatar-crisis-hurts-gulf-oil-cooperation-idUSKBN1DN0TU
  13. http://www.macrotrends.net/1369/crude-oil-price-history-chart
  14. https://www.rfa.org/english/commentaries/energy_watch/chinas-oil-import-dependence-climbs-as-output-falls-12042017102429.html
  15. Haisam Hassanein – personal communication
  16. Haisam Hassanein – personal communication
  17. https://www.timesofisrael.com/jordan-egypt-have-special-relationship-with-israel-says-jordanian-king/
  18. https://www.rt.com/op-ed/saudi-israel-us-iran-155/
  19. https://www.newyorker.com/magazine/2018/06/18/donald-trumps-new-world-order
  20. https://www.newyorker.com/magazine/2018/06/18/donald-trumps-new-world-order
  21. https://www.jpost.com/Israel-News/CIA-chief-Pompeo-Saudis-more-willing-to-share-intelligence-with-Israel-515860
  22. https://www.timesofisrael.com/israel-and-uae-have-maintained-close-covert-ties-since-1990s-magazine-claims/
  23. http://www.mei.edu/content/article/climate-change-middle-east-faces-water-crisis
  24. https://www.scientificamerican.com/article/israel-proves-the-desalination-era-is-here/
  25. http://www.mei.edu/content/article/climate-change-middle-east-faces-water-crisis
  26. http://www.mei.edu/content/article/climate-change-middle-east-faces-water-crisis
  27. https://www.theglobaleconomy.com/rankings/Agriculture_productivity/
  28. https://besacenter.org/perspectives-papers/385-chaziza-the-red-med-railway-new-opportunities-for-china-israel-and-the-middle-east/
Author:Zachary Glass
Published: 25-10-2018