Abraham Accords: Examining how economic incentives and regional security dynamics are shaping the future of Arab-Israeli relations.
Context
The Abraham Accords, brokered in 2020 under the Trump administration, represent a significant shift in Middle Eastern geopolitics. They saw the normalisation of relations between Israel and several Arab nations, initially the United Arab Emirates and Bahrain, followed by Sudan and Morocco. These agreements moved beyond decades of hostility, largely rooted in the Israeli-Palestinian conflict, opening pathways for diplomatic, economic, and security cooperation. The core impetus for these states varied – the UAE and Bahrain primarily sought strengthened security ties against Iran, alongside economic benefits; Sudan hoped for economic assistance and removal from the US’s state sponsors of terrorism list; and Morocco aimed to secure US recognition of its sovereignty over Western Sahara.
Today, the Accords stand at a crossroads. While diplomatic relations are largely maintained, the initial momentum has slowed, particularly in the absence of substantial progress on the Palestinian issue. The agreements have nonetheless created new realities, fostering direct interaction and tangible benefits, but also exposing underlying tensions and regional power plays. The ‘economics of deterrence’ – the interplay between security needs and economic incentives – is now a central feature of the evolving landscape.
Progress Made
The economic component of the Accords has yielded measurable, though uneven, results. Bilateral trade between Israel and the UAE surpassed $2.5 billion in 2022 and continues to grow, driven by sectors like tourism, technology, and renewable energy. The UAE has established a $10 billion investment fund focused on strategic sectors in Israel, and both countries are collaborating on projects related to food security and water technologies. Bahrain also exhibits growing economic ties, although on a smaller scale, with collaborations in fintech and aviation.
Morocco and Israel have deepened security cooperation alongside burgeoning trade, with a focus on defence technology and agricultural cooperation. While economic deals with Sudan experienced initial promise, they stalled following the coup d’état in 2021 and remain largely unrealised, complicated by ongoing political instability.
Beyond direct bilateral trade, the Accords have fostered regional collaborations. The I2U2 Forum – a grouping of Israel, India, the UAE, and the US – aims to accelerate joint projects in areas like food security, clean energy, and infrastructure. Although progress has been slow, it signifies a willingness to explore new partnerships beyond traditional alignments. Crucially, the agreements have facilitated greater intelligence sharing and security coordination amongst the signatory states, strengthening a nascent, informal security architecture aimed at countering shared threats. This has particularly benefitted counter-terrorism efforts and, significantly, is directly related to concerns regarding Iranian activity.
This burgeoning economic engagement has, in turn, created vested interests in maintaining the normalisation agreements, making a complete reversion to prior hostile relationships increasingly unlikely.
Challenges
Despite the progress, significant challenges persist. The most prominent remains the unresolved Israeli-Palestinian conflict. While the Accords were presented as not being conditional on Palestinian statehood, the lack of meaningful progress on this front fuels resentment and criticism among Palestinians and within some Arab public opinion. This creates political constraints for Arab governments, limiting the extent to which they can publicly champion the normalisation process.
Furthermore, the initial enthusiasm has waned, revealing practical hurdles to deeper integration. Bureaucratic obstacles, differing regulatory frameworks, and logistical challenges complicate trade and investment flows. The economic benefits have not been evenly distributed, leading to concerns about equity and inclusivity. The instability in Sudan has been a major setback, demonstrating the fragility of agreements contingent on internal political transitions.
Internal political considerations within the signatory states also present difficulties. Public opinion in some countries, particularly Morocco, remains cautiously sceptical. Concerns regarding potential Israeli influence, and a perceived prioritisation of security over Palestinian rights, require careful management. Regional scepticism also exists. Qatar, Oman, and others haven’t joined the Accords and maintain varying degrees of engagement with both Israel and its rivals. The continuing shadow of the Yemen conflict, and broader geopolitical rivalries, complicate the regional security picture.
Finally, the differing priorities and risk appetites of the involved nations also pose challenges. The UAE is more assertive in its regional engagement, while Bahrain adopts a more cautious approach. Navigating these divergent perspectives requires consistent diplomatic effort.
Israel-Iran Dimension
The ‘economics of deterrence’ are inextricably linked to the perception of the Iranian threat. A primary driver behind the UAE and Bahrain’s decision to normalise relations with Israel was a shared concern over Iran’s regional ambitions, ballistic missile programme, and support for proxy groups. Normalisation offers these states enhanced security cooperation with Israel, including intelligence sharing, joint military exercises, and access to advanced defence technologies – all bolstering their deterrent capabilities.
Israel views these partnerships as crucial in containing Iranian influence and establishing a regional security network aligned against Tehran. This evolving alignment is particularly visible in the maritime domain, where increased cooperation aims to safeguard shipping lanes and counter Iranian naval activities.
However, this dimension also introduces a significant complication. Iran vehemently opposes normalisation, framing it as a betrayal of the Palestinian cause and a threat to its regional interests. Tehran has responded with increased rhetoric, cyberattacks, and, arguably, intensified support for regional proxies. This dynamic creates a heightened risk of escalation and potentially undermines the stability of the Accords. Iran’s development of its nuclear programme further exacerbates anxieties and fuels the demand for stronger regional security cooperation. The perception that the US is less engaged in the region, and the uncertainty surrounding the Iran nuclear deal, contribute to this sense of insecurity.
Path Forward
The future of the Abraham Accords hinges on navigating a complex interplay of security concerns, economic incentives, and political realities. A full-scale, region-wide normalisation remains unlikely in the short term. Instead, a gradual, incremental approach appears more realistic. Deepening economic ties and expanding cooperation in areas like technology, climate change, and water management will be crucial in solidifying the existing agreements.
Focusing on tangible benefits for all parties – including Palestinians – is essential. This could involve supporting economic development initiatives in the West Bank and Gaza, or fostering people-to-people exchanges. While a comprehensive peace agreement remains distant, confidence-building measures can help mitigate tensions.
Continued US engagement, albeit nuanced, will be vital. Washington can play a crucial role in facilitating dialogue, brokering agreements, and providing security guarantees. However, the US must also acknowledge the evolving regional dynamics and avoid imposing overly prescriptive frameworks.
The key will be for Arab states to demonstrate that normalisation serves their national interests, both economically and strategically, despite the political sensitivities. This requires carefully managing public opinion, addressing concerns about equity, and ensuring that the benefits of normalisation are widely shared. The delicate balancing act between security concerns and economic opportunities, the core of the ‘economics of deterrence’, will ultimately determine the enduring legacy of the Abraham Accords.
Source Attribution: This report is based on publicly available information, analysis of regional geopolitical trends, and the established premise of the source title “The economics of deterrence in the Gulf”, extrapolating likely themes and developments within that framework. Specific details are synthesised from open-source intelligence and established reporting on the Abraham Accords as of November 2023.
