Washington, D.C. – With a formal normalization agreement between Saudi Arabia and Israel facing significant political hurdles, particularly following the Israel-Hamas conflict, a new analysis suggests focusing on private sector cooperation as a crucial next step. In an opinion piece published by the Atlantic Council, experts Mark Donig and Tally Zingher argue that US businesses can play a pivotal role in building economic ties between the two nations, ultimately creating a more conducive environment for future political progress.
Current Obstacles to a “Mega-Deal”:
The authors acknowledge the previous momentum for a comprehensive US-brokered deal, potentially involving a defense treaty with Saudi Arabia. However, the recent conflict has complicated matters, with Saudi Arabia reiterating its stance that a Palestinian state is a prerequisite for normalization. This position presents a significant challenge given the current Israeli government’s stance and the ongoing hostage situation.
A Shift Towards Economic Engagement:
Donig and Zingher propose a strategic shift towards incentivizing private sector collaboration. They emphasize Saudi Arabia’s strong economic interests, particularly Crown Prince Mohammed bin Salman’s Vision 2030 plan, which aims to modernize and diversify the Saudi economy. The authors highlight recent Saudi economic reforms that make the kingdom an attractive market for US companies.
The US Role in Facilitating Economic Ties:
The authors outline three key ways the US can facilitate stronger economic ties:
- Promoting Israeli Technology Integration: Encouraging US companies already collaborating with Israeli firms in sectors like cybersecurity, agritech, and renewable energy to deploy these technologies in Saudi Arabia. Existing initiatives like the BIRD and BARD Funds could be leveraged to incentivize this collaboration.
- Leveraging US Multinationals: Facilitating the transfer of Israeli technology and expertise through the numerous US multinational corporations with research and development operations in Israel.
- Improving Regional Infrastructure: Supporting regional infrastructure projects, such as the India-Middle East-Europe Corridor (IMEEC), to boost trade between Saudi Arabia, Israel, and Europe.
Building Economic Interdependence:
While acknowledging potential challenges, including Saudi Arabia’s relationships with China and Iran, US concerns about technology transfer, and regional instability, the authors argue that fostering economic interdependence is crucial. By deepening economic ties, the US can raise the stakes for both Saudi Arabia and Israel, making it more costly for either side to deviate from a path towards peaceful relations. The authors also suggest including a Palestinian private-sector component in these endeavors to ensure regional prosperity is shared by all.
The authors conclude that while formal normalization remains elusive, a business-first approach, championed by the US private sector, can enhance prosperity in both Saudi Arabia and Israel and significantly increase the prospects for long-term regional stability.