By Nadum Jwad*
On September 22, 2023, CNN reported that Israeli Prime Minister Benjamin Netanyahu said it is “likely” Israel will reach a normalization agreement with Saudi Arabia, in what would mark a seismic foreign policy shift for both countries as they edge closer to reaching a deal mediated by the US.
Speaking to CNN’s Kaitlan Collins in an interview on Friday, Netanyahu touted the potential pact as “a quantum leap” in the region.
But he refused repeatedly to say what kind of concessions he would offer Palestinians in order to get the deal across the line.
Israeli Prime Minister Benjamin Natanyahoo
It would “change the Middle East forever,” he said – bringing down “walls of enmity” and creating “a corridor of energy pipelines, rail lines, fiber optic cables, between Asia through Saudi Arabia, Jordan, Israel, and the United Arab Emirates.” (CNN, 9/22/2023.)
This came after a significant event occurred recently when Reuters reported that an Israeli delegation attended a meeting by the United Nations’ cultural agency in Riyadh, in another sign that Saudi Arabia is opening up to Israel with Washington pressing for a full normalization of ties. It added that three Israeli officials were seen sitting at Israel’s chairs of the 45th session of UNESCO’s World Heritage Committee, and that another Israeli official said the delegation included the Foreign Ministry’s deputy director-general for international organizations and the ambassador to international organizations in Paris. This is in addition to a delegate from Israel’s Education Ministry and the chair of Israel’s Antiquities Authority who also took part in the gathering, the official said.
Reuters commented that the Saudi government did not immediately respond to a request for comment. Israel’s Foreign Ministry spokesperson and UNESCO declined to comment, noting that public appearances of Israeli officials are rare in Saudi Arabia, a Muslim powerhouse and home to Islam’s holiest shrines, but both sides have had covert contacts which were forged partly through shared fears of Iran. Reuters went on to say that Washington has been pressing its traditional ally Riyadh to sign a normalization deal with Israel, which would be its biggest diplomatic win in the region and following similar agreements with United Arab Emirates, Bahrain and Morocco, known as the Abraham Accords. However, Riyadh has so far resisted U.S. pressure and linked the move to the creation of a Palestinian state as part of a two-state solution to the Israeli-Palestinian conflict, along with other demands.” (Reuters, September 11, 2023, Israeli delegation attends UNESCO gathering in Saudi Arabia.)
On August 14, 2023 CNN reported on August 14, 2023 that Saudi Arabia has appointed its first ambassador to the Palestinians, in a move that comes amid talks with the United States over a possible deal to normalize relations between the Gulf kingdom and Israel.
Palestinian president Mahmud Abbas (L) receiving the credentials of Saudi Arabia’s Ambassador to Palestine Nayef bin Bandar al-Sudairi (R)
The Israeli Prime Minister, Benjamin Natanyaho stated on several occasions that establishing a relationship between his country and Sauaid Arabia is a major priority which his administration is working diligently to achieve and it is just a matter of time for it to materialize.
This article’s intentions are to examine the benefits, or lack thereof, of normalizing relationships with Israel by Arab countries over the past 45 years. It will also be beneficial to focus on Egypt and Jordan since those two countries have long been involved with such relationships with the jewish state.
The first Arab country to normalize relationship with Israel was Egypt when in 1977 Egyptian president Anwar el-Sadat, in a dramatic move, visited Tel Aviv which was followed by the Camp David accords recognizing the jewish state and establishing full diplomatic representations between the two countries. That visit came in the aftermath of the massive riots in January of the same year when the government of Egypt lifted its subsidies of bread under direct orders from the IMF
and that made life so difficult for ordinary citizens and to a large segment unbearable.
Egypt’s population in 1977 was 40.58 million. Its population now is estimated to be 113.082 million (Worldometer, September 15.) In 1979 when the Camp David accord was concluded, the population of Egypt was 42.63 million. Sadat boosted that this year and the years which followed will be the “years of prosperity” given the expected massive support from the USA and the declining need for military spending. This is in addition to the resumption of the use of the Suez Canal and the expected flourish in tourism with peace.
Sadat at Ben Gorian airport, 11/19/1977
Since then, it is hard to see how that visit and the forming of relationships with Israel translated into prosperity. This article will examine factors such as population growth, foreign debt, runaway inflation, and devalued currency as indicators of Egypt’s current economic condition.
Population growth in Egypt, which has one the highest birth rates in the world, is becoming a very serious problem and a priority for the government. On September 7, 2023, the BBC reported that Egyptian President Abdel Fattah El-Sisi warned of
an imminent catastrophe that would afflict the country unless fertility rates decreased, after the population reached about 105.5 million people, according to data from the Central Agency for Public Mobilization and Statistics.
The Egyptian President pointed out that some citizens do not realize the extent of the burden posed by unregulated childbirth, which could bring disaster to the country, which is already going through a severe economic crisis, in his opinion.
Speaking about the National Population and Development Strategy that was unveiled at the conference, the Minister of Health and Population, Khaled Abdel Ghaffar, stressed the need to educate society about the dangers of high fertility rates.
Egyptian president Abdel Fattah el-Sisi
The minister explained the scale of the problem facing Egypt – first in the Arab world in terms of population, third in Africa and 14th in the world – saying that 5,683 children are born in Egypt every day, at a rate of 237 per hour and 4 per minute, and one birth every 15 seconds, explaining that this is “the greatest challenge.” “Which hinders the wheel of economic growth and devours development revenues, affecting the level of services provided to citizens and their standard of living.” (BBC, September 7, 2023, Population increase in Egypt: Is it solely responsible for the recurring economic crises?)
Population growth is one of Egypt’s many challenges which also includes massive foreign debt, depreciating currency, and runaway inflation. Egypt External Debt reached 165.4 USD bn in Mar 2023, compared with 162.9 USD bn in the previous quarter (CEIC Data.) Egypt currently owes over $52 billion in debt and its services to multilateral institutions, more than 44 percent of which is owed to the IMF, according to the Central Bank of Egypt (CBE.) And despite non-stop IMF programmes since 2016, debt sus- tainability risks have increased at the start of the new 2023 programme: Egypt’s debt is assessed to be sustainable but not with high probability.
Furthermore, the CBE’s statistical bulletin showed that the debt burden service was divided into paid installments of $5.843 billion, and paid interest of $1.311 billion. From July to December 2022 the value of paid interest and installments amounted to $11.9 billion, divided into $4.784 billion during the first quarter and $7.154 billion during the second quarter.
The premiums paid during the fiscal year 2021/2022 amounted to about $21.7 billion, and the paid interest amounted to about $4.570 billion.
The bulletin showed that the ratio of the external debt balance to the GDP amounted to about 35.5 percent by the end of December 2022.
The economy has been growing steadily, but the impact of that growth – forecast at 4% to 5% this year – is blunted by the population surge. Many Egyptians say their standard of living has been eroded.
Since March 2022, Egypt’s pound has depreciated by nearly 50% against the dollar. An acute dollar shortage has suppressed imports and caused a backlog of goods at ports, with a knock-on effect on local industry.
Annual headline inflation surged to 25.8% in January, the highest level for five years, according to official data. Prices for many staple foods have risen much faster.
Official data classified about 30% of the population as poor before COVID-19 struck, and analysts say numbers have risen since then. As many as 60% of Egypt’s 104 million citizens are estimated to be below, or close to the poverty line.
Unemployment has fallen to just over 7%, but labor market participation also dropped steadily in the decade to 2020. Parts of the public education system are in a state of collapse. Many graduates with the opportunity to do so seek work abroad. (Reuters March 3, 2023.)
Revenues of the Egyptian government
Egypt’s economy relies mainly on agriculture, media, petroleum imports, natural gas, and tourism. The Suez canal is also an important source of revenue. In 2020, the total revenue generated from the canal amounted to 5.61 billion USD and 18,829 ships with a total net tonnage of 1.17 billion passed through the canal.
Daily (Wikipedia, Suez Canal Authority)
As of the first half of fiscal year 2022/2023, the government revenues in Egypt were at roughly 686.8 billion Egyptian pounds (which is comparable to 22.23 billion U.S. dollars). Furthermore, the fiscal revenues amounted to close to1,326 billion U.S. dollars (42.92 billion U.S. dollars). This was higher than the value for FY2020/2021, which amounted to around 1,109 billion Egyptian pounds (35.9 billion U.S. dollars). From 2016/2017 onwards, the revenues generated by the government have been following a positive trend. With taxes being the largest share of government revenue, the Egyptian Ministry of Finance plans to broaden its value-added tax (VAT) base from 70 thousand to 550 thousand enterprises. This move plans to combat the shadow economy and improve financial inclusion.
At such a huge debt it looks like that all Egypsts government revenue is barely keeping up with servicing that debt and the only way for the government to survive is to borrow funds from the IMF and elsewhere to provide essential services and service the same growing debt.
Egypt’s colossal debt has been a permanent feature of that country’s economy and newly-released archives by the British government, as reported earlier this year by the BBC, shows that since the the 1980’s that successive governments in Egypt always struggled with that debt, and in 1987 the government of Margaret Thatcher was adamant of not helping the government of the then Egyptian president Hosni Mobarak in its request for help with its huge debt. Other released archives revealed that the gulf states and particularly Saudi Arabia were getting tired of Egypt’s non-ending request for financial support. Ironically, those archives also reveal that the Israeli government lobbied hard with the Thatcher government to help the Egyptian government. It considered it as a stabilizing force in the middle and its fall would seriously undermine the peace process. This gesture can be considered as a positive sign of the benefits of normalizing relationships.
Former British Prime Minister Thatcher with Former Egyptian President Mubarak
This trend is continuous and is becoming more visible. On March 1, 2023 CNN reported that The Gulf creditors are, however, changing the way they lend financial
support to their North African ally, moving away from loosely conditioned handouts and central bank deposits and toward taking sizable stakes in some of Egypt’s trophy assets. Many of those assets have long been under the control of Egypt’s military, an economic behemoth and the backbone of Sisi’s power.
The nation is seen by its neighbors as vital to regional stability and has often found a helping hand from richer Arab states. This time, however, Gulf Arab allies – especially Saudi Arabia and the United Arab Emirates – want to see returns.
The apparent shift in policy was clearly expressed by Mohammed Al-Jadaan, the finance minister of Saudi Arabia, one of Egypt’s biggest benefactors, at the World Economic Forum in Davos, Switzerland in January.
He said they used to give direct grants and deposits “without strings attached,” without specifying the recipients, according to local media. “We’re changing that as we’re working with multilateral institutions to actually say we want to see reforms,” he added (CNN, 1, 2023, Gulf states have given billions in aid to Egypt. Now they want to see returns.)
Furthermore, a Kuwaiti MP in the National Assembly, Osama Al-Shaheen, warned his country’s government against the consequences of what he described as complying with the directives of the International Monetary Fund to support Egypt through new dollar deposits, stressing that this greatly harms Kuwaiti public funds.
In his speech during a session broadcast live in the Kuwaiti National Assembly, “Shaheen” said: “We warn the government against submitting to the directives, or rather orders in some cases, of the International Monetary Fund… which issued an official statement on its website demanding new financing resources from the countries of the Gulf Cooperation Council.” to Egypt worth $14 billion.”
Egypt is suffering from a severe economic crisis, the worst in its history, as the state’s external and internal debts have reached catastrophic, unprecedented numbers.
The International Monetary Fund, in an official statement, called on what it described as “Egypt’s Gulf allies” to fulfill their investment pledges amounting to billions of dollars in Egypt, which will be in exchange for shares in Egyptian assets and companies, on the specified dates, to ensure that the state covers the external
financing gap in the coming years. (Al Shabaka Al Libralia Al Hurra, January 3, 2023.)
In 45 years since normalizing relationships with Israel Egypt had six presidents, one was assassinated in spectacular fashion, one was toppled by popular revolt and died after a lengthy trial, one was toppled down by military coup and mysteriously died in jail, and the current one who is regarded as a ruthless dictator by many.
Egypt’s population almost tripled during that time, its debt went 50 fold, suffers from runaway inflation and crushing unemployment and poverty, this is in addition to persistent insurgency. It is hard to see the prosperity envisioned by Sadat when he formed full diplomatic relationships with Israel in 1979.
Jordan was the second Arab country after Egypt to recognize Israel and established a full diplomatic relationship. On 26 October 1994, Jordan and Israel signed a peace treaty, normalizing relations between them and resolving territorial disputes, including water sharing. The treaty adjusted land and water disputes, and provided for broad cooperation in tourism and trade.
Israel and Jordan sign a peace treaty in 1994
During that time, Jordan rarely had any stability. The country had 20 different governments (18 different prime ministers), it had several major riots for food and demands for political reforms, war with ISIS, among other things. Its population almost tripled as it went up from 4.27 million to 11,337, 052 today. Its external debt went up from $7.55 billion to $41.82 billion today.
The Jordanian-Israeli relationships are far from being idealistic and were shaken by several events. For example, On September 25, 1997, the Israeli Mossad tried to assassinate Hamas political leader Khaled Mashaal outside a building in Amman, Jordan. The assassination attempt failed, but it caused a major rift between the two countries.
Former Hamas leader Khaled Mashaal
In September 2019, just before a scheduled parliamentary elections, Israeli Prime Minister Benjamin Natanyahoo announced that he plans to annex the Jordan Valley. He later backed down from this threat after intense criticism by the international community. He did, however, and on 28 May 2020, said he was committed to annexing parts of the West Bank in July once a joint Israeli-U.S. team completes mapping the exact territory based on the conceptual map released
by U.S. President Donald Trump’s administration. However, the July 2020 annexation plan was later pushed back. Jordan, for its part, fiercely protested such a move.
Former American President Donald Trump
The parliament of Jordan has voted to recommend the expulsion of Israel’s ambassador to Amman from the country in protest against the behavior of a minister in Israel’s far-right government, who stirred controversy earlier this week after he denied the existence of the Palestinian people (Aljazzera, March 22, 2023.)
Riots in Jordan
The 1996 Jordanian protests were mass protests and riots in Jordan for 2-4 weeks in August-September against new International Monetary Fund-led reforms, leading to bread-price hikes and despite economic troubles, the government of Prime Minister Abdul Karim Kabariti increased food prices and basic good prices hiked, sparking rioting in Karak and spread to Ma’an, Zarqa, Amman, Madaba and other southern cities, where poverty is high (“Food Riots”. The Victoria Advocate. 1996-08-23. Retrieved 25 March 2013.)
Former Jordanian Prime Minister
In June 2015, hundreds of protesters took to the streets of Amman, as anger boils over a gas deal between Jordan and Israel.
The Jordanian government is being accused of fueling the murder of Palestinians. Critics called for all agreements to be scrapped (Euronew 6/3/2015.)
Jordan was not immune from the “Arab Spring” which began in Tunisia and caused regime change in Egypt and Libya. The Jordanian protests were a series of protests in Jordan that began in January 2011, and resulted in the firing of the cabinet ministers of the government. In its early phase, protests in Jordan were initially against unemployment, inflation (Kadri, Ranya; Bronner, Ethan (1 February 2011). “Jordan’s King Dismisses Cabinet as Tremors Spread Through Region”. The New York Times. Archived from the original on 6 November 2018.
Retrieved 23 February 2017.), corruption (“Protesters demand ‘saving’ Jordan from corruption” Archived 6 November 2018 at the Wayback Machine. The Daily Star (Lebanon), (2 December 2011).along with demanding for real constitutional monarchy, (“Thousands rally to demand reform in Jordan” Archived 6 November
In December 2022, major riots erupted in Jordan. The protesting workers, which include goods and passenger transport drivers, are demanding reduction in fuel prices and cancellation of special taxes on fuel derivatives (Arab News, December 2022 “Jordan’s striking truck drivers sign deal with lawmakers to end protest”.)
It is really hard to see how Jordan has greatly benefited from its peace treaty with Israel. By all accounts, the country’s economic performance albeit by its massive debt, enormous population growth, large number of refugees, frequent food riots, its total and complete dependence on outside financial help, etc. has been dismal to say the least.
The issue of whether Arab states have gained benefits from normalizing relationships with Israel is hotly debated by Arab thinkers.
Palestinian writer and media personality Ibrahim Hamami said that for 5 decades, specifically since the visit of former Egyptian President Anwar Sadat in 1977 and then the signing of the Camp David Accords two years later, Israel has been seeking popular Arab normalization but has not achieved it.
Hammami confirmed in statements to today’s episode, February 21, of the “The Opposite Direction” program that all of Israel’s cultural, economic, and political attempts to penetrate the Egyptian people failed, and the same thing was repeated with the Jordanian people, whose authorities signed a peace agreement with Israel about 30 years ago.
According to Hamami, Israel has realized that normalization with the Arab peoples is impossible, considering that the Arab rejection of the Israeli media presence at the World Cup hosted by Qatar is the best evidence of the position of the Arab peoples as a whole rejecting the Israeli presence on Palestinian soil. Based on its realization, Hamami said that Israel is no longer looking for participation and cooperation with the Arabs, but rather wants normalization with their governments that guarantees it hegemony and control over their capabilities, and wants to impose normalization on the Arab peoples by force and coercion, and therefore it proceeded to sign peace agreements with many governments. Arab countries are indifferent to the positions of their people who reject them.
The Palestinian writer said that the deteriorating conditions of the Arab countries that signed peace and normalization agreements with Israel decades ago strengthens the conviction of the Arab peoples who reject peace with Israel, and he concluded by saying that normalization with Israel in the Arab world is an official failure and popularly rejected
Hammami also rejected some suggestions of benefits of normalization by stressing the deterioration of the situation in Egypt since it signed the Camp David Accords. He stressed that Egypt’s conditions before the agreement were comparable to the conditions of Malaysia and Turkey, and he asked about the similarity between its situation and the situation of these two countries now. He said that Egypt has become indebted and economically collapsed and is about to declare… Its bankruptcy, and the situation in Jordan did not change for the better after peace with Israel – according to Hamami – but rather the opposite is true (Aljezzira, 2/21/2023.)
From 1977 when the first attempt was initiated to normalize relationship with the Jewish state by Egypt, the population of jewish settlers in the west bank increased from a mere 3200 to 503,000 in 2022, and in East Jerusalem from less than 10,000 to 230,000 in 2022 (a total of 733,000, 56 folds.) (Wikipedia, Israeli Settlements.) This is despite, as in the case of Egypt and lately the UAE, claims that Israel “promised” to halt or at least slow down the building of settlements in the occupied Arab territories. In fact, Benjamin Natanyahoo, who heads the most right wing government in Israel’s history and the biggest proponent and pusher of normalizing relationships with as many Arab countries as possible (and so far the most successful of all past Israeli leaders in that endeavor), never ceased building settlements and vowed to continue that process (Haaretz, Netanyahu Vows to Continue ‘Battle’ to Expand Settlements, March 2, 2023.)
*Nadum Jwad is freelance political writer, lives in Windsor, Ontario, Canada