Middle East


Changing Realities: Opportunity for Israel and Its Neighbors

Palestinian children participate in a demonstration demanding the release of Palestinian prisoners from Israeli jails, in the northern West Bank city of Nablus, in May 2004.

The uprisings in the Middle East are plunging the region into uncharted territory. But as international and other regional powers scramble to adjust, the changing realities are also an opportunity for Israel and Arab countries to forge mutually beneficial economic ties and to coalesce around common regional interests. 

The Arab uprisings are redefining regional relationships at a speed far greater than regional players are used to. For example, pre-uprising relations between Israel and Egypt are now being reassessed by the Egyptians. A recent poll by the Pew Research Center showed that 54 percent of Egyptians want to annul the peace treaty with Israel. If this happens, Israel looks set to lose its preferential rates for gas, of which Egypt supplies 40 percent. And other Arab states are also likely to re-evaluate their relations with Israel. 

In the current situation, Israel has two options. It can either accept increasing isolation in the region, or seize the situation as an opportunity during a time when geopolitical interests are being realigned and alliances redrawn. So too the Arabs can become even more reliant on foreign assistance, or recognize that at their doorstep is a neighbor who can help them achieve a greater degree of self-reliance.

Israel and the Arab states now share the need to ensure that the region can withstand the changes brought about by the uprisings, and the need to recognize the opportunities that these changing realities could give rise to.

The biggest stumbling block is, of course, the Palestinian-Israeli conflict, the importance of which must not be underestimated. Given that the widespread anti-Israeli sentiments within the Arab world are primarily linked to the conflict with the Palestinians, cooperating with the Israelis will be a very difficult task to sell to the Arab street.

But the changing political realities now offer a momentum that if harnessed could propel Palestinian and Israeli leaders towards more action-oriented approaches. The Palestinians could potentially become the biggest beneficiaries of this collaboration. They hold the key to Israel's integration in the Arab world and should use this not only as a bargaining chip, but as a way to look beyond the conflict.

The Gulf states are generally viewed positively by Palestinians since they have not played the same role in the history of the Arab-Israeli conflict as other Arab states have. This relationship can become an opportunity for Palestinians to play a key role as bridge-builders in strengthening economic relations between Israel and the Gulf states.

The potential benefits to the Gulf are significant. The likely permanent damage to the Bahrain financial sector as a result of the uprising there is forcing banks to relocate to Dubai for now, but potentially out of the region altogether. If this happens, Gulf states will need to intensify their economic diversification efforts. There is a real appetite in the Gulf to become home to a cutting-edge technology industry, but they show only modest gains so far.

Israel can help the Gulf make this shift, and it too has much to gain from such a relationship. Israel has been unable to sustain a corporate culture and capital to enable its high-tech start-ups to develop into successful international industry leaders. After a few years, Israeli start-ups tend to migrate to the West. But the Gulf can ensure that these start-ups do not leave the brand new Middle East for the West. The capital—and to some extent, the nascent but growing corporate culture—already exists in the Gulf.

This collaboration could also lead to the creation of more jobs, of which the region is in dire need. Failure can mean further brain drain, rising socio-economic tensions and risks of further instability.

The changing reality is challenging the Middle East to look beyond "business as usual," and challenging Israel to integrate rather than alienate itself from the new realities.

There is incentive, motivation and a responsibility for Middle Eastern countries to collaborate more closely for the prosperity of the region's future. One just needs to change the lens and view the region in a different light—which includes the full participation of all its neighbors.

Ghanem Nuseibeh is a Britain-based Palestinian consultant and founder of Cornerstone Global Associates Ltd. Naava Mashiah is an Israeli consultant based in Switzerland, CEO of M.E. Links, senior consultant at ISHRA and editor of MEDABIZ economic news. This article was written for the Common Ground News Service: www.commongroundnews.org.