Israel and Saudi Arabia, normalization of century

By Frank Musmar and Raphael Nagel

On August 2, 2023, The Financial Times published a report on the future of relations between Saudi Arabia and Israel, President Joe Biden's administration's pressure for normalization between the two countries. On August 9, 2023, The Wall Street Journal published an article illustrating that Saudis Agree with the U.S. on the Path to Normalizing the Kingdom's Ties with Israel, and officials of the U.S., Israel, and Saudi Arabia are negotiating details of the agreement they hope to cement within nine-to-12 months willing to make Saudi Arabia the uncontested leader of the Middle East backed with soft power and vast, oil-generated coffers.

The general principles of the primary memorandum are that Saudi Arabia will recognize the state of Israel, and in return, Israel's right-wing government will make concessions to the Palestinians. Also, according to the same agreement, the United States would provide Saudi Arabia with security guarantees and share technical knowledge about nuclear energy.

The Saudis want significant concessions from Israel, which would support the creation of a separate Palestinian state. At the same time, the U.S. is pressuring Saudi Arabia to limit its relations with China. For example, the United States wants assurances that the Kingdom will not allow China to build military bases on Saudi Arabian soil. The U.S. also wants to restrict the use of Huawei technology and that the Saudis continue to use U.S. dollars, not Chinese money, for oil sales. Accordingly, U.S. President Joe Biden sent one of his closest advisers to the Saudi capital to discuss the issue, but Israeli National Security Adviser Tzachi Hanegbi said that "there is still a long way to go" to establish relations between the two countries.

Biden's efforts come as the U.S. presidential elections approach this year, and the U.S. president said, during a meeting with donors for his campaign, that "convergence may be close." Israeli Chancellor Hanegbi revealed in an interview with the Israeli Public Broadcasting Corporation that the entire agreement between Saudi Arabia and Israel is not under discussion, but there was a "positive surprise a few months ago when the White House said that it was making efforts to reach an agreement with the Saudis."

Diplomats say Saudi Arabia is seeking concessions from the United States, including security guarantees, support for a civilian nuclear program, and access to weapons, in return for normalizing relations with Israel. Saudi officials said the Kingdom would also need a significant positive step from Israel toward the Palestinians. Saudi demands of Israel could include a halt to settlement expansion and a pledge not to annex the West Bank, which the Palestinians want as the heart of a future state.

Saudi Arabia considers itself a leader in the Muslim world, so it has more significant obligations than other Arab countries that have already signed Accords with Israel. The Kingdom put forward an Arab peace initiative to Israel in 2002, which included Saudi recognition of the existence of Israel in exchange for allowing the establishment of a Palestinian state, and Saudi leaders publicly affirmed their adherence to this position.

How the mechanism of peace works

In General, for any peace initiative to succeed, it should consider the Geopolitics of the area of interest, Political Communications and Media coverage, International Law guidelines, Economics, Business, Science, Technology, Arts, and Culture dimensions. Accordingly, the mechanism of application will be as follows:

1- Raising awareness and advocating for issues relating to peace.

2- Produce training materials considering the regional area's culture and languages. This is a critical point to consider. For Example, The region was abuzz with slogans for the new deal (Peace for Prosperity), but nothing captured what was happening and 'the deal of the century,' a phrase coined by Egyptian President Abdel Fatah al-Sisi and extensively adopted by Arab media destroyed the Peace plan.

3- Support peace initiatives and integrate them into the regional cultures.

4- Creating culturally and geographically specific research on issues related to peacebuilding and allowing for essential follow-up and long-term support.

5- Supporting the social role in peacebuilding and supporting NGOs.

Accordingly, the Saudi approach is based on most of the points mentioned above and illustrated as follows:

1- Request from the United States to settle the arms deals that the Biden administration suspended and conduct a defense alliance, including establishing an entire nuclear program.

2- The Palestinian cause. Riyadh called Israel to start a peace process based on the two-state solution principle. Despite the clear cozying up, the Saudis still say the Israelis will have to offer the Palestinians a deal, or a variation of that, something the Saudis can build upon. The starting position should be Israeli acceptance of the Arab Peace Initiative, promoted by the late King Abdullah of Saudi Arabia in 2002. The plan calls for the establishment of a Palestinian state on the borders of 1967.

3- Limiting threats: Saudi Arabia has made the shift to limit the threats it faces to no more than two enemies: Iran and Sunni Islamist political opposition. These happen to be seen as the two threats facing Israel as well, which brought both countries to an unlikely alliance. Iran and Saudi Arabia are already engaged in a cold war across the Middle East. Israel is rattled at the prospect of a nuclear Iran. Saudi Arabia sees combating organized Islamist opposition as a priority, especially after their Arab Spring successes. Israel shares the same concerns as the country fears a repeat of the Arab Spring could lead to Islamist governments taking over from current unpopular regimes and later gaining control of vast military resources.

4- Internal Challenges: Warming relations with Israel have also been a recognized approach for Arab regimes whenever they face internal challenges, to drum up American and Western support against local opposition by appearing 'moderate,' 'open,' and 'tolerant' – three words now highly valued by Arab regimes facing survival issues.

5- The Game changer: Crown Prince Mohammed bin Salman is the biggest game changer. He is keen to make a foreign policy mark to eclipse local and international doubts about his youth, governing ability, and statesmanship. Crown Prince Mohammed bin Salman is surrounded by advisors known for sympathetic positions towards Israel and hostility to Islamist groups such as Hamas.

6- Economic opportunities: To ease the deal's wheels, the Saudis tout economic opportunities with the wealthy, oil-rich countries of the Gulf. Perks will include direct telecommunication, Israeli airlines flying over the airspace of the Gulf States, and no trade restrictions with Israeli companies. Israeli officials themselves estimate immediate benefits upwards of $45bn.

The Future of the Middle East Energy Trade Following the Abraham Accord

The historical peace agreement and full normalization of relations between Israel and the Gulf States could lead to more substantial economic, political, technological, health care, education, tourism, and cultural ties between the countries' governments and their people. Moreover, the Accord is the foundation for expanding energy trade from the Gulf States through Israel to supply the world. Abraham Accord is a lucrative opportunity to carry natural Gas across Saudi Arabia to the Trans-Israel Pipeline and Europe. The Pipe is used to pump the unloaded oil in Ashkelon from Azerbaijan and Kazakhstan to tankers in the Gulf of Aqaba for transport to China and South Korea.

Qatar plans to increase its annual liquefied natural Gas by 64% to reach 126 million tons by 2027. A Saudi gas deal with Qatar will help the Saudi Kingdom solve the shortage in its gas supply. It will replace the 900,000 b/d of liquid fuels that the Kingdom used for industrial and power generation, generating more than $10 billion of additional export revenue.

In October 2020, MED-RED Land Bridge, an Emirati/Israeli-owned company, and EAPC, the Israeli-owned pipeline company, signed a memorandum of understanding to make Israel a transshipment hub by storing and transporting oil from the UAE to Europe using the Trans-Israel Pipeline. The UAE has a 4 million Bbl /d production capacity, sells most of its oil to Asia, and sells refined products to Europe via tankers traversing the Red Sea. Other members of the Gulf Cooperation Council are likely to follow, most likely Saudi Arabia and Qatar.

The UAE oil will connect the Shaybah Abqaiq pipeline to the East-West pipeline. The Qatari Gas will connect to the East-West pipeline, which transports the Saudi raw materials from Ras Tannurah on the country's East to Yanbu's western port at the Red Sea. The East-West pipeline is about 1170 km and 5 million Bbl. /day (planned to increase it to 6.5 Bbl. /day) capacity and its parallel gas pipeline has a capacity of 290 thousand barrels daily. Connecting the East-West pipeline with the Trans-Israel Pipeline will be the deal of the century.

The oil / Gas deal between the Gulf States and Israel will benefit all parties. First, the Gulf States will no longer worry about Iran's piracy and sabotaging the oil tankers. Second, using the Trans-Israel Pipeline offers an advantage over the Suez Canal, especially since the Canal cannot accommodate the giant supertankers. The Gulf States charter two small tankers through the Canal instead of one supertanker and pay $300,000-$400,000 / one way for each tanker. Using the Trans-Israel Pipeline will be significantly cheaper than using the Suez Canal.

Expanding the East-West Pipeline will provide more flexibility in exporting oil for Saudi Arabia and rerouting the 2.5 million Bbl. /day that the Saudi export through the Strait of Hormuz to Yanbu at the Red Sea in scenarios where the Strait of Hormuz is closed or partially blocked due to aggression from the Saudi rival, Iran, or due to any clashes between Iran and the Saudi allies USA and Israel. Accordingly, connecting the East-West Pipeline to the Trans-Israel Pipeline will create a safe alternative for exporting oil to the Gulf States.

The New World Order is a Geo-economical Regional Order

The Russian-Ukrainian war is the turning point from a bipolar to an emerging multipolar world order. The collapse of the Soviet center of power was followed by the triumph of a West that aspired for global control, tried to impose its model as a universal solution upon the diverse world, and overestimated its strength politically, economically, and culturally, forfeiting much of what they could otherwise have achieved.

Accordingly, the growing influence of non-Western states started growing and rising, ending the economic colonization and became an undeniable and inevitable trend centered in four regions: the East Mediterranean, South America, Russia's hemisphere, and China's hemisphere; represented by China, India, Indonesia, Brazil, Russia, Turkey, and Israel.

The emerged markets represented by the four trends start seeking non-interference in their internal affairs, diversification of economies and social systems, full sovereignty of their natural resources, fair prices of their raw materials, and freedom to industrialize their nations with appropriate techniques and technologies, reforming of the international monetary system to line with development needs, international exchange of ideas, expertise, and assistance, and better participation and involvement in international trade.

The primary and significant turning point in the new Geo-economical regional order was The Abraham Accord, An Accord that concentrated on creating an exemplary model of tolerance, coexistence, and pluralism in the Middle East; the Accord opened the doors for many prosperous regional Geo-economical agreements that reinstate the East Mediterranean region to stand again to connect the East and West economically utilizing an existed coined trade agreement and coining new ones as needed.

In November 2020, 20 countries from the Association of Southeast Asian Nations (ASEAN) and five regional partners signed the Regional Comprehensive Economic Partnership (RCEP), forming the most significant free trade agreement in history to stimulate intra-East Asian integration around China and Japan, and linking technology, manufacturing, agriculture, and natural resources of North and Southeast Asia with the world.

The aftermath of the RCEP and Abraham Accord motivated every growing economy and many countries from the West to look for a seat in any emerging super economy to keep a slice of the cake. Accordingly, On February 1, 2021, the United Kingdom formally applied to join the CPTPP. The East Mediterranean region, mainly and foremost, is an area with many growing economies, rich in natural resources, lived many conflicts caused by the superpowers for decades, and was the fastest movers through bilateral economic and trade deals recently.

In April 2022, the United Arab Emirates launched an online service providing detailed information on the UAE-India Comprehensive Economic Partnership Agreement (CEPA) as a part of the major trade deal signed in February 2022 and entered into force on May 1, 2022. In May 2022, Israel and the United Arab Emirates penned a multi-billion dollar free trade agreement, with a stated target of increasing annual bilateral trade to more than $10 billion over the next five years; the trade agreement is the largest ever between Israel and any Arab country.

In July 2022, Indonesia and the United Arab Emirates signed a free trade agreement, strengthening economic ties between Southeast Asia's largest economy and the significant oil-producing Gulf state. The UAE agreements kept flowing. In July 2022, India, Israel, the United Arab Emirates (UAE), and the United States had their first leaders meeting of the group intending to tackle the most significant challenges confronting the world with a particular focus on joint investments and new initiatives in water, energy, transportation, space, health, and food security.

The UAE has engaged in talks about establishing similar arrangements, whether as part of the GCC, with the European Union, Japan, Australia, South Korea, India, Brazil, China, Argentina, Malaysia, Pakistan, Paraguay, Turkey, and Uruguay. In October 2021, Turkish and African leaders signed a Cooperation Framework Arrangement to promote investment and trade under AfCFTA to $50B annual trade between Turkey and Africa.

In November 2021, Malaysia and Turkey finalized an agreement package to expand FTA by the Middle of 2022 to cover trade in services, investment, and electronic commerce. Turkey signed similar expansion trade agreements with Georgia, Ukraine, Belarus, Korea, Pakistan, and England. In May 2022, Turkey and the UAE signed comprehensive trade agreements to boost their cooperation in a wide range of fields from $8 billion to $10 billion target shortly, by increasing mutual investment opportunities, including but not limited to the transportation projects that will connect the Gulf region with Europe through Iraq.

To reshape the economics of the East Mediterranean, reshaping the political order became necessary. Accordingly, in February 2022, Turkey reshaped and healed its relationship with the United Arab Emirates and welcomed Israeli President Isaac Herzog in March. The last step of reshaping the area was consolidating the strained relations with Saudi Arabia. Let's suppose the four emerging regional powers, Turkey, Israel, UAE, and Saudi Arabia, can work for their respective causes less aggressively. In that case, a new super economy will emerge in the East Mediterranean region after the fall of the unipolar economy.

Energy is the Key Player in the New East Mediterranean Geo-Economical Order

The world reached the end of the world order that has strengthened the position of the dollar and the United States for decades. It is a matter of time before the global recession becomes official, and severe crises will erupt in the Western stock markets, leading to stagflation. The only reason the global economy is still holding is the fear of a destructive new world war as a solution to fix the problem, which is escalating daily due to the shortages of energy supplies, which will further exacerbate the inflation crisis.

Turkey's unique location, robust market economy, well-established tradition of co-operating with the West, and large armed forces, second in size after the U.S. in NATO, controlling the Straits and stabilizing the Black Sea region, balancing the Caucasus region, an energy bridge between the rich natural resources of the Caspian basin and Central Asia, East Mediterranean basin, and the Western world provides geo-strategic and leverages for international influence affairs. The geographic location entitles Turkey to be a critical Geo-economical player as well.

The Russian invasion of Ukraine pushed Europe to scramble to secure alternatives to energy imports from Moscow, adding an urgent desire to take advantage of the region's sizeable offshore gas reserves, making Israeli Gas the most viable choice. However, the tensions have been escalating between Greece and Turkey for several decades over the political settlement on Cyprus, the demarcation of the maritime borders of the disputed exclusive economic zones in the eastern Mediterranean, and Ankara's unease over the militarization of Turkish islands in the Aegean, in violation of international treaties. The tension between Turkey and Greece was exacerbated by the discovery of large gas fields in the eastern Mediterranean, which compounded the problem of overlapping maritime areas.

Building the pipeline connecting Cypriot and Israeli Gas to Turkey to transfer it to European markets via the existing natural gas pipeline that crosses Anatolia is a comprehensive settlement deal that will glorify the area and avoid a military confrontation between Greece and Turkey. Discussing ways to include Turkey in regional hydrocarbon development partnerships such as the East Mediterranean Gas Forum would be a goodwill gesture; it means that all sides will be able to save face and give Turkey a chance to demonstrate its commitment to dialogue.

While there is reluctance among European leaders to engage with Turkey, priority must be given to focusing on results. Russia's unnecessary war against Ukraine has suddenly changed the energy outlook for Europe. With the four countries, Greece, Cyprus, Israel, and Turkey, heading into a highly competitive election year, preserving the fragile status quo may seem the best bet. However, containing the outbreak of any future conflict is not a satisfactory long-term solution, and the focus must be on bold and creative solutions. In any election cycle, a crisis's risk is escalating and highly costly.

The Need for a Rapid Transit Infrastructure

The Israeli Express train, which Israel intends to launch to link the Red and Mediterranean seas to compete with the Suez Canal, will also be a game changer. The electric train will be built to revive crowded neighborhoods and streets, establish educational institutions, and build commercial buildings, luxury housing, and entertainment venues.

The Israeli government is investing heavily in transportation infrastructure, and the results will be evident in the coming decades. These plans will realize available and reliable public transportation throughout Israel and the Middle East, providing advanced transportation solutions in urban areas and integrating advanced technology.

The electric train will also allow a continuous train trip from the Emirates to the cities of Israel, and the railway line to Jordan, Egypt, the Emirates, and Saudi Arabia will contribute to improving relations between Israel and these countries. It will allow tourists, business people, and goods to reach these destinations easily and quickly.

The Economic Implications

As part of broader engagements under the Abraham Accords, the potential normalization between Israel and Saudi Arabia heralds a significant shift towards economic integration and cooperation that could redefine the Middle Eastern economic landscape. This move aligns with Saudi Arabia's ambitious Vision 2030, aiming to diversify and modernize its economy away from oil dependency. The inclusion of Israel, known for its tech-savvy and innovative economy, presents vast economic potential for mutual growth and development??.

While energy and infrastructure developments are pivotal and already underway, the emergence of open, friendly relations between Israel and Gulf Arab states, including the UAE and Bahrain, has established a new dynamic in the region. These relationships, fostered on shared strategic imperatives and economic interests, are poised to expand into numerous sectors such as technology, health tech, agriculture, climate innovation, cybersecurity, and financial services. The groundbreaking normalization agreements, symbolized by the Abraham Accords, have paved the way for direct investment and bilateral trade and spurred discussions on joint investments in third countries, enhancing regional economic integration and cooperation.

Two other Arab states, Bahrain and Morocco, followed the Emirati example and signed on to the Abraham Accords. The Accords have unlocked numerous opportunities across various domains, including trade and tourism. The UAE has welcomed over a million Israeli visitors since formalizing bilateral relations.

Today, the UAE-Israel economic and trade ties are a testament to the accords' success, showcasing the vast potential for regional economic integration. Post-accords, UAE-Israel bilateral trade surged from merely tens of millions of dollars before 2020 to an estimated $3 billion in 2023, with Emirati officials predicting it could exceed $1 trillion over the next decade. The focus on Israeli technology and innovation, coupled with the UAE's project management and logistics expertise, aims to foster multilateral deals with Israel in third countries, underlining the strategic shift towards a knowledge-based economy and high-tech investments??.

Region's concerted efforts to diversify economies away from oil dependency:

We can see a shift towards the Middle East as a region of strategic importance and influence in global affairs for the following reasons:

Economic Growth and Diversification Geopolitical Influence Advancements in Technology and Innovation Financial Power and Investment Sustainable Energy Initiatives Cultural and Tourism Development Strategic Trade Agreements and Partnerships

As of January 2024, six countries, including the UAE, Saudi Arabia, Egypt, and Iran, joined BRICS. In the current global landscape, characterized by a shift towards multipolarity, the expansion of the BRICS bloc—comprising Brazil, Russia, India, China, and South Africa—reflects a strategic realignment in international relations. This adjustment is particularly relevant to the Middle East and North Africa (MENA) region, signaling a potentially transformative phase in the global order.

The recent expansion of BRICS underscores the group's intention to diversify its geopolitical and economic alliances. Pivotal players in the MENA region, Saudi Arabia and the UAE, view their prospective BRICS membership as an opportunity to augment their global influence and diversify their international partnerships. This move is seen as a strategic endeavor to balance their established relationships with Western powers, particularly the United States, with emerging ties to other influential nations, notably China. Furthermore, including Saudi Arabia and the UAE in BRICS could have profound implications for global energy policies and trade dynamics, given their status as major oil producers. It symbolizes the desire of these countries to navigate the complexities of international relations while pursuing strategic objectives that resonate with their national interests and global aspirations.

Saudi Vision 2030: A Transformative Agenda supporting economic diversification

2030 will commemorate 100 years since the unification into the single nation of Saudi Arabia. The Kingdom of Saudi Arabia's Vision 2030 represents a fundamental shift in the country's approach to economic diversification, social reform, and global engagement. Launched in 2016 by Crown Prince Mohammed bin Salman, Vision 2030 seeks to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors. This strategic framework aims to cultivate an environment conducive to sustainable economic growth, innovation, and a more inclusive society.

Tourism is increasingly recognized as a pivotal driver of economic growth in Saudi Arabia and a key pillar in the Saudi Vision 2030. The Kingdom is strategically investing in a wide array of mega-projects, notably the $500 billion Neom project along the Red Sea coast, aiming to redefine the concept of urban living while attracting tourists from around the globe. These initiatives are part of Saudi Arabia's ambitious Vision 2030, which seeks to diversify the economy away from oil by developing sectors such as tourism, entertainment, and sports.

The UAE and the Kingdom of Saudi Arabia are on a mission to become leading global tourist destinations. This vision is supported by their efforts to host major global sports events, which serve as a magnet for international visitors and as a catalyst for regional tourism and infrastructure development.

For instance, the announcement that the FIFA World Cup 2034 will take place in KSA, following Qatar's hosting of the 2022 edition, marks a significant milestone in the region's sports tourism sector. Furthermore, Saudi Arabia's potential investment in the Indian Premier League (IPL) signifies a strategic move to align with globally recognized sports franchises, potentially transforming the sports entertainment landscape in the region.

The expansion of Formula 1 (F1) to include a second circuit in KSA, alongside existing Grand Prix (G.P.) events in the UAE, Bahrain, and Qatar, highlights the Gulf region's growing prominence in the global sports arena. Additionally, the Public Investment Fund (PIF)-backed LIV Tour with the Professional Golfers' Association (PGA) merger is poised to elevate the golfing experience, attracting enthusiasts and professionals alike to the region.

Qatar Sports Investments (QSI), the owner of the renowned Paris Saint-Germain (PSG) football club, plans to merge its padel competition circuit with the rival World Padel Tour. This initiative aims to create a global professional tour for the sport, further enriching the region's sports tourism offerings.

These ambitious projects and investments underscore the Gulf region's commitment to diversifying its economic base through tourism, sports, and entertainment. By hosting prestigious international events and developing world-class facilities, the UAE and KSA are enhancing their global tourist destination status and fostering economic growth, cultural exchange, and international cooperation.

The Gulf's Economic Resilience as Dealmaking Stays Strong

Gulf dealmaking still enjoys strong tailwinds despite geopolitical and global economic uncertainties. That was evident during Saudi Arabia's flagship investment forum, Davos in the Desert, and other high-profile investment-related events in the second part of 2023 and early 2024.

Saudi dealmaking has continued, such as the Kingdom's ACWA Power signing an agreement to develop a $4 billion green hydrogen project in Egypt on December 20. Meanwhile, November also saw Middle Eastern airlines in full force during the Dubai Airshow, when Emirates inked a Boeing deal valued at $52 billion. The threat of war also hasn't dampened investor appetite for Gulf IPOs: Dubai Taxi Company's late November listing received over $41 billion in investor orders for a $315 million public offering — record demand for a Dubai IPO.

The GCC region has seen a flurry of IPOs driven by strong investor demand despite a global economic downturn that is expected to continue. In 2023, IPOs in the Middle East accounted for 45% of EMEA volumes, making it the 3rd best year since 2007

The region's private equity (P.E.) landscape is also flourishing, with Saudi Arabia's Jadwa Investments acquiring the company behind Allo Beirut, signaling intentions to expand beyond the UAE. Furthermore, the announcement of raising 2 billion riyals ($530 million) for a new Middle East-focused fund highlights the appetite for regional investments and the potential for significant economic impacts.

On the sovereign investment side, the transformation of the Kingdom's primary investment vehicle, the Public Investment Fund (PIF), from a small holding company to an international dealmaker and manager of mega projects has been one of the biggest successes of the diversification strategy. PIF disclosed that 23% of its AUM were international investments, 68% were local investments, and the remainder were treasury. With the $31.5 billion spent in 2023, the fund accounted for about a quarter of the almost $124 billion spent by sovereign wealth funds worldwide.

According to the Wall Street Journal, Jared Kushner has raised USD 2 billion from the Saudi sovereign wealth fund to invest in Israeli tech companies. The amount is part of a USD 3 billion private equity fund. Any deal would mark the first instance that Saudi Arabia's Public Investment Fund has invested in Israeli businesses, demonstrating another move into normalizing relations with Israel and capitalizing on the flourishing startup scene there.

Investment in Innovation and Technology

Israel, often dubbed the "Startup Nation," boasts one of the world's highest concentrations of startups per capita. According to the Startup Nation Central Finder, in 2022, Israeli tech companies raised $25.4 billion in funding, underscoring the country's attractiveness to global investors and its role in the international market??. Furthermore, Israel's tech exports constitute a substantial portion of its total exports, exemplifying the sector's critical role in its economy. The Israel Export and International Cooperation Institute reported that in 2021, high-tech exports accounted for 54% of Israel's total exports.

With Dubai as a leading city, the UAE has established itself as a vibrant tech hub, attracting startups and global technology firms with its ambitious initiatives like the Dubai Blockchain Strategy and the establishment of Hub71, aiming to position the Emirates as a leading technology-driven economy. Similarly, Saudi Arabia fosters a culture of innovation, evident in projects such as Neom, a planned smart city that epitomizes the Kingdom's push toward becoming a global technology leader.

The UAE and Saudi Arabia have made substantial investments in technology and innovation. The UAE announced the National Innovation Strategy to become one of the most innovative nations in the world, focusing on renewable energy, transport, education, health, technology, water, and space. Saudi Arabia's PIF has invested billions in tech firms globally and is a significant investor in Softbank's Vision Fund, which funds technology companies across various sectors.

Conclusion

In a dynamic geopolitical landscape, the potential normalization between Israel and Saudi Arabia, heralded by the Abraham Accords, marks a pivotal moment poised to reshape the Middle Eastern economic and political fabric. This anticipated rapprochement, underpinned by the United States' diplomatic efforts, seeks to fortify Saudi Arabia's stature as a regional pacemaker, leveraging its economic prowess and strategic positioning. At the core of these discussions are fundamental concessions aimed at fostering a peaceful resolution to the long-standing Israeli-Palestinian conflict, with Saudi Arabia championing significant steps toward the creation of a Palestinian state.

In light of these developments, the UAE continues to advocate for peace and stability in the Middle East, emphasizing the role of diplomacy in navigating the multifaceted landscape of regional politics. Through these efforts, the UAE aims to contribute to a future where cooperation and understanding prevail, enhancing the well-being and security of the region's people. This forward-looking stance reinforces the UAE's position as a key player in shaping the region's future and highlights the potential for transformative change through collaboration and mutual respect. As the Abraham Accords evolve, the promise of a new chapter in Middle Eastern diplomacy offers hope for lasting peace and prosperity.

Concurrently, this normalization drive intersects with Saudi Arabia's Vision 2030, an ambitious blueprint for economic diversification and innovation, minimizing oil dependency. Given its technological and entrepreneurial leadership, Israel's incorporation into this framework promises mutual benefits across sectors, including technology, health tech, and energy. These initiatives aim to enhance bilateral and regional economic integration and solidify a cooperative stance on shared geopolitical concerns, notably the threats posed by Iran and various regional insurgencies.

Moreover, this evolving alliance is expected to catalyze a broad spectrum of bilateral and multilateral trade agreements, enhancing tourism and fostering peace and prosperity. Initiatives like the proposed Israeli Express train and the development of an integrated Middle East to Europe economic corridor signify a strategic pivot towards infrastructural modernization and interconnectivity, promising to bridge divides and knit the region closer together.

The anticipated normalization between Israel and Saudi Arabia is a testament to the shifting paradigms of Middle Eastern diplomacy and economic strategy. It encapsulates a collective aspiration for a stable, prosperous, and integrated region anchored in mutual respect, economic synergy, and a shared vision for a peaceful future. This transformative period heralds an era of potential peacebuilding, economic prosperity, and technological collaboration, setting a new course for the Middle East's role in the global geopolitical arena.

Dr. Raphael Nagel

Chairman at Tactical Management, focusing on carve-outs and companies in special situations. M&A and Corporate Law Consultant at Nagel & Partners. Chairman at The Abrahamic Business Circle.

Dr. Frank Musmr

Faculty| Academic Researcher | Middle East Politics Expert | Best Selling Writer | Advisory Board President | Dissertation and Proofreading specialist | Journalist ( Member of the International Federation of Journalists)