Tuesday, August 18, 2020

The UAE-Israel Deal

 Several days ago the United Arab Emirates (UAE) and Israel have agreed to have diplomatic relations, with this being the third Arab nation to officially recognize Israel, following Egypt in 1979 and Jordan in 1994. President Trump and his supporters are claiming that this is a great breakthrough to world peace, with Jared Kushner supposedly the key player on the American side.  But most observers think that this is an exaggeration, to put it mildly.  The standard summary is that this deal is a win-win-win-lose: a win for the US, UAE, and Israel, but a lose for the Palestinians.

Let me give the Trump people, including even the usually incompetent Jared Kushner, some credit.  They have managed to achieve only a handful of international agreements.  And given the long and difficult relationship between Israel and the Arab nations, it must be recognized that making such an agreement is difficult, so they deserve some congratulations, even if this is far less than what they claimed they were going to achieve, which was supposed to be a much broader agreement. But given the administration's strong tilt to Israel from the beginning, supporting moving the US embassy to Jerusalem, recognizing the annexation of the Golan Heights, and supporting a plan that would countenance annexation of territories in the West Bank, it is unsurprising that the Palestinians simply withdrew from any negotiations being pushed by the Trump administration. There simply was not going to be that more general agreement.

Of course we must admit that there is a sort of gain for the Palestinians: the UAE leadership demanded a cessation of the Israeli plans to annex West Bank territories, thus retaining a smidgeon of a chance for the nearly dead two state solution that supposedly came out of the Oslo Accord. Of course, Netanyahu says this is only temporary, and he retains the plan to do annexation. But that plan is now on hold. But this is a matter of the good thing being a matter of Israel not doing a bad thing that Trump and Kushner were supporting them in doing. This is not something to get too into praising about.

There is also the matter that there was a lot less input from Trump and Kushner to this outcome than they would have us believe. This deal has been in the works for a long time. Indeed, while he did not make a big deal about it and was ridiculed by the Trumpisti when he mentioned it, Biden and Obama did play a role in the early stages of this. The initial openings between the UAE and Israel date as far back as 2013 with more definite moves happening in 2015, with the top people in the Obama admin aware of this and encouraging it.  From 2015 on there were Israeli businesses operating in the UAE, and the two have shared intel since from around then, if not earlier, mostly about Iran, whom they share an enmity towards.  The key player on the UAE side has been its top leader, Prince Mohammed bin Zayed (MbZ) of Abu Dhabi. He is viewed by many as more important in Middle East matters than his junior sometime ally, MbS in Saudi Arabia.  While these two generally work together mostly, they have backed different groups in Yemen, and Saudi Arabia is apparently not likely to follow UAE on making an open deal with Israel, although rumors have Bahrain and Oman possibly doing so.

Will this deal lead to peace between Israel and the Palestinians or peace between Iran and its regional enemies or even a major relaxation between Israel and the broader Arab world?  Probably not, possibly even aggravating some of these.  But it may reflect public acknowledgement of the reality on the ground.

Barkley Rosser

5 comments:

rosserjb@jmu.edu said...

Juan Cole reports that the US is now offering F-35 stealth planes to the UAE. These are produced by Lockheed Martin, where the current SecDef Esper worked, and indeed worked on this airplane. UAE figures are letting it out that this was part of the deal with Iarael, but this would put UAE on a technological equal level with Israel militarily in terms of aircraft. Apparently Netanyahu is claiming no knowledge of this or that it is part of the deal, and many in Israel are unhappy about this. It is being said that he is going to shaft Benny Gantz, with whom he is in a coalition while he is being tried for corruption. Call an election and try to win based on the deal. Of course, Trump gets also to claim a foreign policy "victory," while pleasing a big campaign contributor in Lockheed Martin.

rosserjb@jmu.edu said...

Reportedly Netanyahu is not getting much, if any, political credit for this diplomatic "achievement," with large demonstrations going on daily now against him and his government, which is now stuck in an impasse over a new budget.

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Fred C. Dobbs said...

Fed pledges to focus on low unemployment and tolerate higher inflation

The Federal Reserve, in a significant shift that could keep interest rates low for longer periods, said it would focus on keeping unemployment low and allow inflation to run slightly higher in good times.

The Fed chair, Jerome H. Powell. announced the change in a speech on Thursday at the Kansas City Fed’s annual Jackson Hole symposium that was accompanied by an updated long-run statement describing the Fed’s policy strategy. He said the shifts would allow the gains of a strong economy to benefit a wide range of workers.

“Our revised statement emphasizes that maximum employment is a broad-based and inclusive goal,” Mr. Powell said in remarks prepared for delivery Thursday, and “this change reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities.”

The Fed had been raising rates as joblessness fell to avoid economic overheating that ended in breakaway inflation, but in recent years, price gains have been tepid. The changes are an explicit recognition that too low, rather than too high, inflation is the problem.

By emphasizing the importance of a strong labor market and underlining the Fed’s modesty in understanding how long, and how far, unemployment can fall, Mr. Powell and his colleagues used their updated framework to lay the groundwork for longer periods of low interest rates, which could translate into both long periods of cheap mortgages and business loans and stronger future job markets.

Mr. Powell, in explaining the changes, said that “with interest rates generally running closer to their effective lower bound even in good times, the Fed has less scope to support the economy during an economic downturn by simply cutting the federal funds rate.”

The result, he said, “can be worse economic outcomes in terms of both employment and price stability, with the costs of such outcomes likely falling hardest on those least able to bear them.”

Mr. Powell acknowledged that it might seem “counterintuitive that the Fed would want to push up inflation” which, in turn, raises prices. But he the trade-off was a less robust economy that did not deliver gains evenly.

“We are certainly mindful that higher prices for essential items, such as food, gasoline, and shelter, add to the burdens faced by many families, especially those struggling with lost jobs and incomes,” he said. “However, inflation that is persistently too low can pose serious risks to the economy.” ...

Fred C. Dobbs said...

Stocks rise after the Federal Reserve chair’s update

U.S. stocks edged higher on Thursday, as investors digested a speech by the Federal Reserve chair that signaled a looser approach to stimulating the economy. ...