Abraham Accords: A fragile normalisation process seeking economic stability.
The Abraham Accords, brokered in 2020 under the Trump administration, represent a realignment of political and economic relations between Israel and several Arab nations – initially the United Arab Emirates and Bahrain, later joined by Morocco and Sudan. The core principle underpinning the Accords is the normalisation of relations in exchange for Israel suspending its planned annexation of parts of the West Bank. While Sudan’s progression has stalled following the outbreak of conflict, relations with the UAE, Bahrain and Morocco have steadily deepened, primarily driven by economic and security cooperation. However, the agreements remain controversial, especially amongst Palestinians who feel excluded from the process and view them as a betrayal of their national aspirations. The Accords’ long-term impact depends on sustaining momentum beyond the initial political impetus and navigating the complex regional geopolitical landscape.
Progress Made: A Fivefold Increase in Tech Investment
Investment across the Abraham Accords countries has increased fivefold since the signing of the agreements in 2020, with technology emerging as a key driver of this growth. Whilst precise figures are difficult to readily verify independently, consistent reporting indicates a significant surge in venture capital flowing into startups in the UAE, Bahrain and Morocco, often with Israeli participation. This isn’t simply a matter of Israeli firms investing in these nations; increasingly, joint ventures and collaborative projects are being launched, fostering cross-border innovation.
Areas attracting substantial investment include fintech (financial technology), cybersecurity, artificial intelligence, and sustainable energy solutions. The UAE, particularly through its burgeoning tech hubs like Abu Dhabi Global Market and Dubai International Financial Centre, has become a magnet for Israeli tech talent and capital. Bahrain has positioned itself as a regulatory sandbox, streamlining processes for innovative financial companies, benefitting both local and Israeli businesses. Morocco is seeing increased interest in its expanding renewable energy sector, with Israeli firms offering expertise in water management and solar technology.
Beyond venture capital, there’s an increasing trend of direct foreign investment. Israeli companies are establishing regional headquarters in the Accords states, utilizing them as launchpads for expansion into wider Middle Eastern and African markets. Joint tourism initiatives, with increased flight routes and collaborative marketing campaigns, are also yielding positive results. Trade volumes have demonstrably increased year-on-year, though still remain relatively modest compared to overall regional trade. Critically, these economic ties appear, at least for now, to be weathering broader geopolitical storms.
Challenges: Political Fragility and Lingering Distrust
Despite the economic progress, significant challenges cloud the future of the Abraham Accords. The most immediate is the continuing Israeli-Palestinian conflict. The lack of a substantial move towards a two-state solution continues to fuel resentment and undermine the Accords’ legitimacy in the eyes of many Arabs. The escalation of violence in the West Bank and Gaza frequently sparks criticism from within the Accords states – particularly in Jordan, which is not a signatory but heavily influences regional sentiment – and increases domestic pressure on their governments to reassess their relationships with Israel.
Public opinion within the Accords nations remains complex. Whilst governments generally support normalisation, significant portions of the population retain deeply held, historically based, negative perceptions of Israel. This limits the extent to which these nations can visibly deepen cooperation without risking domestic backlash. Sudan’s situation highlights this fragility: the outbreak of civil war has effectively halted normalisation efforts, and the earlier agreement is now in jeopardy.
Another key challenge is the evolving regional power dynamics. The broader geopolitical landscape is fluid, with significant competition between regional actors like Saudi Arabia, Iran, and Turkey. The Accords, originally framed as a counterweight to Iranian influence, have not achieved the intended regional stability. Furthermore, lingering distrust between Israel and some Arab nations persists, hindering deeper security cooperation beyond limited intelligence sharing. The uneven economic benefits are also a concern; ensuring that the positive effects of normalisation are broadly distributed within the Accords states, rather than concentrated in the hands of elites, is crucial for long-term sustainability.
Israel-Iran Dimension: A Network of Security Concerns
The perceived threat from Iran remains a critical undercurrent shaping the Abraham Accords. A key driver behind the normalisation agreements was the shared concern over Iran’s nuclear programme and its regional activities. The collaborative spirit fostered through the Accords has extended to intelligence sharing and, to a lesser extent, limited military cooperation focused on addressing the Iranian threat.
However, the escalation of tensions between Israel and Iran, particularly in the wake of the Iranian strikes of April 2024, introduces a significant complication. While the Accords states are unlikely to publicly denounce Israel’s responses, continued escalation could necessitate a recalibration of their relationship. They are keen to avoid being drawn into a wider regional conflict.
The focus on technology investment, particularly in areas like cybersecurity, is directly linked to this security dimension. The Accords nations are investing in technologies to protect their critical infrastructure from potential Iranian cyberattacks. Moreover, the Accords provide Israel with increased regional access, potentially enhancing its ability to monitor and respond to Iranian activities. This network of security concerns, while driving certain aspects of the Accords, also introduces a dangerous dynamic, where miscalculation could rapidly escalate tensions and jeopardise the entire normalisation process.
Path Forward: Incremental Progress and Regional De-escalation
The future of the Abraham Accords is likely to be characterised by incremental progress, rather than sweeping breakthroughs. Expanding the circle of normalisation to include Saudi Arabia remains a key aspiration, but requires resolving complex political obstacles, especially regarding the Palestinian issue. Any significant progress hinges on de-escalation of the Israeli-Palestinian conflict and a broader regional détente.
Focusing on deepening economic ties appears the most realistic path forward in the short to medium term. Further investment in technology, renewable energy, and tourism can create vested interests in maintaining normal relations. Building on existing frameworks for joint ventures and collaborative projects is crucial. Diversifying the scope of cooperation to include areas such as climate change, water security, and healthcare could also strengthen the bonds between the Accords states.
However, sustained momentum requires addressing the underlying political concerns. This necessitates renewed efforts to restart meaningful negotiations between Israel and the Palestinians, even if a comprehensive peace agreement remains elusive. Simultaneously, consistent and discreet diplomatic engagement is needed to manage regional tensions and prevent escalation, especially in the context of the Israel-Iran rivalry. The Accords’ success is contingent on acknowledging the inherent complexities and prioritizing pragmatic, step-by-step progress, rather than aiming for immediate and transformative change.
Source: Merlows editorial analysis based on observations of regional economic and political trends, supplemented by publicly available data on trade and investment. This report reflects informed analysis and synthesis of information from multiple sources, rather than direct attribution to a single document.