Connectivity Made-in-Israel: Hegemony over Integration

Posted originally to American Herald Tribune on 30 November 2020.

Many sing praise of the potential peace-dividend of Chinese-led global connectivity. Launched in 2013, China’s sprawling Belt Road Initiative has renewed focus on economic interdependencies between nations as a means of promoting inter-state non-hostility.

Israel, however, stands out as a unique case among the states visibly embracing the rising trend of transnational trade corridors and matching geopolitical blocs and alliances. While Israel seeks to undo its historical isolation from regional trade and economy, its new connectivity initiatives all bear one salient aspect antithetical to the peace-dividend concept: their enabling of sustained brinkmanship in Israeli foreign policy.

While truly region-wide connectivity may be a new phenomenon for Israel, Tel Aviv has prior experience in forging close economic arrangements with other states which both alleviate its economic isolation and enable its regionally destabilizing policies.

With the adequate historical context, several contemporary Israel-led connectivity initiatives from the Eastern Mediterranean region to the Arabian Peninsula and Gulf region can be understood in greater depth.

The Camp David Accord as Israel’s blueprint for hegemonic connectivity

Israel’s 1978 Camp David Accord with Egypt can be seen as a template for Israel’s current push for regional economic integration on terms inequitable to its partners and which do not hinder its capability to wield policies with chaotic regional implications.

That it could portray the Camp David Accord as a sign of willingness to compromise for peace with Arab states was only the smallest boon for Israel the Accord represented. The major gains it rewarded Israel far outweighed anything it conceded to Egypt as part of the Accord and the negotiations which led-up to it and the Egypt-Israel normalization.

The Israeli ‘concession’ was handing back the Sinai Peninsula to Egypt, which Israel occupied since its preplanned conquest of Egyptian, Syrian and Jordanian territory during the 1967 Six Day War.

Despite much Zionist outcry in Israel at relinquishing the Sinai owing to its great significance in Jewish history, Israel in truth freed itself of an unprofitable burden. The Sinai’s oil wells were part of why Israel coveted it in the first place, yet it soon realized it lacked the technical capacity to exploit them.

Coupled with the consternation regarding future conflicts over its occupation of Arab lands Israel incurred owing to its near-defeat in the 1973 Yom Kippur War with Egypt and Syria and the case for giving up the Sinai strengthened further in Tel Aviv.

Accordingly, Israel ceded major Sinai oil wells back to Egypt in 1975 as part of a budding détente being brokered by the US’ passionately pro-Zionist foreign policy chief, Henry Kissinger.

Kissinger, who oversaw the emergency US military hardware supplies which ensured Israel repelled the Egyptian-Syrian onslaught in 1973, ensured Israel was richly rewarded for handing back the oil wells and officially committed to tending to its oil needs.

The Camp David Accord then obligated Egypt to allow Israel to bid for Egyptian oil and thus ensured that Israel, regardless of its incapability to avail the resource properly at the time, did not lose out by ceding Sinai oil back to Egypt.

Egypt was mandated to respect Israel’s security – regardless of what Israel did elsewhere in the Arab world – and thus abandon its legacy as an icon for Arab unity. Sizeable annual US military aid to Egypt was hinged upon this, cultivating an Egyptian military in the long term which considered peace with Israel profitable. In such a scenario, Israel could rely on brutal repression within Egypt of anyone who demanded active opposition to Israel.

With the largest Arab state no longer a threat, Israel gained the luxury of not having to worry about its eastern front. This allowed it to double-down against enemies elsewhere: fresh off ‘peace’ with Egypt, Israel bombed Iraq’s Osirak nuclear reactor in 1981 and invaded Lebanon in 1982, continuing its quest for hegemony.

Clearly, relinquishing a burden in the Sinai and passing it off as testament to Israel’s ‘peace’ credentials to tame Egypt and enable renewed region-wide Israeli aggression was a bonus for Israel. It got the oil – a resource it had few other real channels for purchasing – and saw Egypt’s traditional anti-Zionism depleted.

Egypt’s own security-economic stability now became inextricably tied to its acquiescence to an Israel-favouring status quo.

The Accord thus gave Israel a lot – both economically and in terms of greater freedom to amplify overt militaristic aggression against its foes in the Middle East. Moreover, it did this whilst appearing to be a historic détente between two enemies.

New Israeli geo-economics: the Mediterranean-Gulf trade corridor versus Iraq and Iran

The Camp David Accord was just the kind of connectivity Israel sought, but it was carefully insulated from the rest of the Middle East. The normalization and economic integration it espoused was not meant to extend to Israel’s relations with other Arab states.            

Today, however, Israel does seek a more region-wide connectivity with new large-scale geo-economic projects which yet prioritize hegemonic concerns over economic. Toward this end, Israel in 2018 announced a planned railway link connecting the Mediterranean Sea via Israel to the Gulf of Oman.

In November 2019, Israel reiterated its intent to proceed with this project.

The corridor’s structure and route visibly hinge its viability and future upon isolating or dismantling Israel’s enemies, the path toward which it seeks to gradually build. Foremost among these enemies is Iran, upon whom Israel has pushed and lobbied for a US attack for decades.

For a series of reasons, an actual US invasion of Iran has not been forthcoming despite Israel’s incessant advocacy for it. One of these reasons is the global crisis a US attack on Iran across the Persian Gulf would cause. Such a crisis would be caused less by the inevitable disruption of shipping in one of the world’s most vital maritime trade routes and more by Iran blocking the Strait of Hormuz chokepoint to deter escalatory US action.

This act would prevent huge volumes of trade leaving and entering the Persian Gulf. Thus, international traders and business lobbies the world over lobby against a US-Iran war. Additionally, senior US military personnel posted in the Middle East consider an invasion of Iran a reckless, unsustainable venture and accordingly resist excessive brinkmanship pushed by the most zealously pro-Israel US officials.

Therefore, Israel’s trade corridor accounts for these realities and seeks to mitigate these obstacles to a US attack on Iran.

The corridor deliberately avoids terminating in the Persian Gulf and instead prefers the Gulf of Oman as its route to the sea despite the former being a shorter, cheaper route. Doing so seeks to help the GCC alter their export logistics and route for lesser reliance on the Persian Gulf – where a war-threatened Iran blocking the Strait of Hormuz would mean the effective cessation of the GCC’s oil exports to the rest of the world.

Israel’s corridor would grant the GCC the option to redirect these exports, upon which they disproportionately rely for their revenue and foreign exchange earnings, toward Omani ports by land for shipping via the Gulf of Oman. While this would not change the severe threat of Iranian missile reprisals against the GCC in the event of a US-Iran war, it nonetheless helps Israel keep the GCC interested in the corridor.

However, the corridor’s attempt to reorient regional trade and shipping in a way that would isolate Iran reaches beyond lessening just the GCC’s reliance on the Persian Gulf. As analyzed by the author in an earlier analysis for Press TV:

Israel’s quest for a US-Iran war also has the Persian Gulf’s importance to global shipping other than GCC oil exports to contend with. Considerable shipping crosses the Strait of Hormuz en route to offloading its cargo at the shores of the Persian Gulf countries, making powerful international business interests averse to the US attacking Iran and turning the Persian Gulf into a battle zone. Eager to maintain their supply chain and ensure smooth delivery of their shipped cargo to their customers, traders would lobby governments the world over against the war.’

‘The Israel-GCC corridor’s land component seeks to counter this by linking those customers effectively to the Sea of Oman, thus ‘addressing’ the traders’ concerns vis a vis being cut off from their customers. Simultaneously with this boosting of the feasibility of the Sea of Oman route, Israel’s warmongering lobbyists in Washington will ensure the US continues militarizing the Persian Gulf and thus indirectly compels traders traditionally using the Persian Gulf into settling for the Sea of Oman alternative.’

Thus, the success of Israel’s Mediterranean-Gulf of Oman corridor not only seeks to enhance the scope for a US-Iran war, but to an extent also itself relies on Israel continuing to stoke US-Iran tensions in the Persian Gulf to render that region unsafe for trade. The hegemonic aspect thus clearly trumps the economic.

Another aspect of the corridor exemplifying the aggressive goals incorporated into it is the fact that Israel included Iraq in its pitch for the corridor to its GCC allies.

Iraq, with or without massive Iranian influence in its politics and military, is accurately describable as an anti-Zionist state. Its opposition to normalization of Israeli-Arab ties has been consistent and was strong even in the aftermath of the 2003 US invasion of Iraq when rumours of a planned oil pipeline from Kirkuk to Israel’s Haifa led to Iraqi rioting and attacks upon energy infrastructure, subsequently torpedoing the project.

Israel has long seen this as a factor denying it access to Iraq’s immense oil wealth and bolstering anti-Zionism in the Arab world. Aside from continuing the use of airstrikes against Iraqi targets as it did in 1981 at the Osirak nuclear reactor, Israel has employed other tactics against Iraq such as promoting Kurdish secessionism in its north and supporting extremist sectarian terrorists such as ISIS against Baghdad which leave little doubt as to its conviction that destabilizing Iraq is in Israel’s interests.

Thus how does Israel’s Iraq policy line-up with Iraq’s inclusion into the Mediterranean-Gulf of Oman trade corridor? From an economic connectivity perspective, it makes little sense to include a state which Israel seeks to damage so severely in the route of an important mega-project.

Yet, Israel not only included Iraq but included it despite the corridor not needing to even pass through Iraq for its end-point at the Gulf of Oman. The Israel-Jordan-Saudi Arabia-Oman route works fine whereas crossing through Iraq would be a needless detour even if the corridor terminated in the Persian Gulf – which it would do so via any GCC port and not Iraq’s long-damaged and inefficient Umm Qasr Port – instead of avoiding it because of Iran.

The answer for this seemingly curious decision regarding the corridor’s route lies again in Israel’s hegemonic connectivity concept.

Ridding Iraq of the influence of the Shia clergy and Iran-allied Shia paramilitaries – who today uphold Iraqi anti-Zionism much the way Arab nationalism did decades ago – would remove the only coherent obstacle to Iraq-Israel normalization, although Baghdad’s resistance to ISIS and Kurdish secession attempts in recent years has been successful.

Therefore, Israel’s inclusion of Iraq into the corridor’s route sets the violent subduing of Iraq as a priority of the corridor – and even a pre-requisite for its full actualization.

Evidently, the corridor throws down the gauntlet against Israel’s foes and raises the stakes of its geopolitical tussle with them to encompass not only the fate of their respective blocs and alliances but the economic future of the Middle East itself.

Israel’s natural gas ambitions and the strangulation of Egyptian economic sovereignty

Discoveries in 2009-10 of huge gas fields near its East Mediterranean coast whetted Israel’s appetite for regional connectivity fixed strongly in its favour. Israel rapidly sought to avail exploitation of the Tamar and Leviathan gas fields to become a gas exporting powerhouse and energy transit hub for oil and gas flows between Europe and Asia.

However, it faced uncompromising hurdles in this regard.

Israel had no infrastructure of its own to export gas abroad. Such constraints meant that the companies working at Tamar and Leviathan would be incapable to secure large export contracts with foreign buyers – a function that needs to be completed before large volumes of gas are produced from the fields since it ensures it is sold and not idle or wasted.  

In short, after quickly fulfilling its domestic needs as a physically small market, Israel would not be able to exploit the huge gas surplus and penetrate global markets.

Israel had, however, one ace up its sleeve to convert this situation of disadvantage to one of advantage. This was not economic or financial wizardry, but the control over Egypt’s economy by the Egyptian military and General Intelligence Services (GIS), who the Camp David Accord rewarded with US aid for appeasing Israel.

With their help, Egypt could be volunteered to enable Israel’s energy goals despite doing so involving sacrificing Egypt’s economic interests to boost Israel’s. Following the 2013 military coup orchestrated by Israel and the GCC which propelled dictator Abdel Fatah al Sisi to power in Cairo, this strategy became fool-proof.

First, a long-term commitment was needed for Egypt to import Israeli gas. Restoring gas self-sufficiency was a pretext, but given the cheaper option Cairo had in using local gas or from its own massive East Mediterranean offshore gas fields discovered in 2015 for this purposes, committing to costly Israeli imports was not the best choice for Egypt itself.

Moreover, unlike Israel, Egypt had ample infrastructure to produce gas locally – and existing partners such as Italy’s ENI or French Total to run it whilst Cairo reeled under financial instability following the 2011 ‘Arab Spring’ turmoil. Sale of the gas locally and then abroad would remunerate both Egypt and its investors adequately in the long term.

 In spite of these issues, Egypt signed a deal in February 2018 to import $15 billion worth of gas from Israel over 10 years. The amount was later raised to $19.5 billion.

As documented by an October 2018 investigative report by Egyptian newspaper Mada Masr, the GIS controlled the network of local and offshore Egyptian companies involved at every stage of the deal’s signing and implementation. Such was necessary to ‘strong-arm’ the lopsided deal forward and shield it from any serious backlash in Egypt.

Another necessary favour to Israel required for the deal’s fruition was giving it control over the subsea Arish-Ashkelon pipeline. This pipeline was Israel’s only transport outlet to Egypt, or anywhere abroad, for its gas and was used until 2012 to export Egyptian gas to Israel. It needed to be modified to reverse its flow and send Israeli gas to Egypt. Thus, the GIS used ‘Sphinx’, a firm it launched in tax haven Holland, to launch EMED, a joint venture with the companies operating Israel’s gas fields, where it held a 50% share. EMED then acquired a controlling 39% stake in the East Mediterranean Gas (EMG) company operating the pipeline from its own shareholders – a series of Israeli businessmen and GIS-affiliated Egyptian companies – and thus gained the right to reverse its flow.

Another key favour done Israel by the GIS pertained to the price of Israeli gas it agreed to import.

Citing apparent future plans for the Israeli gas imported by Egypt to be re-exported, Israel priced its sales to Egypt very high based on the idea that its end-users would be at the end of a further international supply chain.

The aforementioned Mada Masr report, citing an energy sector report by Egypt’s CI Capital Investment Bank available to the GIS, described this Israeli premise as a deceptive means to over-charge Egypt for the gas exports:

‘The report concludes that the cost means that the gas will be sold to the end user for “$7.50-8/mmBtu, on our calculations.” For comparison’s sake, the report refers to  the cost of producing local gas in Egypt, which ranges from $1.75 to $3.50 per btu after dividing costs with foreign firms, and the sale price in Europe, $5.80 per btu.’

‘In light of this cost, the report concludes that it is unlikely that Israeli gas can be exported to Europe, demonstrating in graph form the difference between the price Egypt is paying to import Israeli gas and the sale price of gas in Europe.’

Writing in February 2019, Egyptian geophysicist Khaled Foad also illustrated the unlikelihood of Israeli gas being re-exported to Europe to thus justify Israel’s higher prices:

‘The first obstacle is apparently the inability of the gas coming from Israel to compete with natural gas prices in European markets where it will be difficult to imagine that the gas coming from Israel through a pipeline to Egypt, liquefied in the Egyptian liquefaction plants, transported in tankers to the European coasts, and finally deliquefied again, can compete with cheap Russian gas flowing into Europe through a pipeline network that has been existing for decades.’

Suffice to say, the GIS acquiesced to the deceptive premise. Israel was gifted profits beyond its means at the expense of Egypt’s people, whose bills inevitably soared under steep gas price hikes purposed with ensuring Egypt continued the exorbitant Israeli imports.

Dealing in gas and West Bank annexation: Israeli hegemonic connectivity engulfs Jordan

Israel’s 2009-10 gas discoveries set the stage for a convergence between its quest for primacy in the gas trade and another, older policy approach toward Jordan. What has followed since then in Israeli policy toward Jordan exemplifies the seemingly paradoxical combination of expansionism and economic integration in Israel’s connectivity projects.

That older policy approach is Israel’s serious intent to annex the Palestinian West Bank and use Jordan as the dumping ground for the Palestinians Israel thus expels. Zionists have threatened to do this for decades, underscoring it with claims that Jordan represents the ‘real Palestine’.

A constitutional monarchy, Jordan normalized relations with Israel in 1994 and unlike Egypt was never a military threat. This combined with the fact that Jordan has no indigenous energy resources and must import makes brings within Tel Aviv’s sights both the prospect of securing it as a market for overpriced Israeli gas and to have it acquiesce to receiving a Palestinian exodus.

Sure enough, Jordan signed a deal with the companies operating Israel’s Leviathan gas field in late 2016 to import $10 billion worth of Israeli gas over 15 years starting in 2019. The controversy preceding and following the signing demonstrated amply that most in Jordan knew the deal for what it was: an attempt to force Jordan to continue to bow to Israeli interests even when threatened with destabilization.

Naturally, this necessitated stealthy maneuvering and misleading of the general public by Jordan to get the deal going, as would be also be done in Egypt by the GIS.

The deal’s preceding memorandum had already been rejected by Jordan’s parliament in 2014. To bypass this obstacle, the government claimed the deal did not require parliamentary ratification since it was between private entities. This was a false excuse, since the Jordanian party signing the deal, the National Electric Power Company (NEPCO), is wholly state-owned. The government also claimed the deal needed to be translated into Arabic before the parliament could inspect it, but signed it before this could be done.

Jordanian civil society, activists and lawyer groups reacted with initiatives such as the ‘National Campaign to Overturn the Gas Deal with the Zionist Entity’. They cited the fact that Jordan had diverse import sources and thus competitive prices as opposed to needing a long-term commitment to just Israel and also a gas surplus it planned to re-export.

The deal’s hegemonic agenda was condemned by the Jordanian chapter of the international Boycott Divestment Sanctions (BDS) movement launched by Palestinian activists in 2005 against Israel, which stated soon after its signing:

‘Jordan BDS categorically rejects the agreement for strategic, economic and moral reasons as it ties Jordan’s energy, economic and political security to Israel for the coming 15 years.’

Nevertheless, Jordan in 2020 began importing Israeli gas despite continued domestic disapproval – and the prospect of Israel’s West Bank annexation looming large.

Alongside thus deepening the rift between the Jordanian government and its people with the controversial gas deal, Israeli Prime Minister Benjamin Netanyahu maintained his re-election promise to annex the West Bank as a non-negotiable policy. Additionally, the January 2020 US-Israeli ‘Deal of the Century’ on Palestine declaring the annexation ‘legitimate’ further confronted Jordan with the prospect of receiving a Palestinian exodus.

Destabilize and integrate: Israel’s old Lebanon strategy re-applied to Jordan

Israel’s simultaneous deepening of its economic footprint in Jordan and threat to destabilize it with a Palestinian refugee exodus resembles the way it sought to combine expansionism with economic integration toward another Arab state, Lebanon, decades ago.

As narrated by the late Professor Israel Shahak, renowned author on Israeli ideology and foreign policy, writing in 1996 on Israel’s invasion of Lebanon fourteen years prior:

One of the first things that Israel did on invading Lebanon was to remove the customs barriers separating the two countries, as far as entry of Israeli merchandise is concerned.’

‘Ordinary Lebanese goods are still forbidden to enter Israel, although a brisk import of drugs (re-exported to other countries) is going on. But Israeli merchandise enters Lebanon with the full encouragement of the Israeli government, without paying custom duties of any kind, and is also re-exported to other countries.’

Thus, alongside the brutalities of its invasion including numerous genocides such as the Sabra and Chatila Massacre, Israel sought to ensure monopoly in Lebanon for Israeli exports. In fact, Israel’s forceful undermining of the scope for a strong central Lebanese authority to exert defiance to Israel’s dictates broadened the scope for Israel to use strong-arm the Lebanese market into its dominating orbit.

Professor Shahak describes an example of this in his 1997 book, ‘Open Secrets: Israeli Foreign and Nuclear Policies’, whereby Israeli state-run agricultural exporter Agrexco used military coercion against its competitors:

‘Anyhow, owing to action of the security forces, ‘the initial disarray’, when ‘Arab farmers from the Galilee were allowed to enter Lebanon and sell their produce there’ was speedily put to an end: ‘Agrexco, in its capacity of authorized state monopoly, requested the Army to act with dispatch against the Arab interlopers… Border controls were reinstated and the Lebanese and unauthorized Israelis were as a rule denied the right to cross it. Agrexco alone could from then on deliver Israeli agricultural produce to locations right behind the Lebanese border.’ (pp. 109, Chapter 10)

In Jordan’s case, the strategy of connectivity accompanied by severe coercion Israel implemented in Lebanon in the 1980s may fare better than it did in Lebanon itself. While Israel ultimately lost the Lebanese market to the successful insurgency against its military occupation by Hezbollah, today’s unpopular Israel-Jordan gas deal is unlikely to face similar blowback from Jordan to Israel’s West Bank annexation threats since Jordan has little will or means to resist it.

Connectivity and conflagration

Obstacles abound to Israel’s connectivity projects and to Israel’s vision for a Middle East re-engineered into a state which has no room for Tel Aviv’s foes. Even the fruition and completion of some of these projects, such as the Israel-GCC Mediterranean-Gulf of Oman trade corridor, depends upon a manner of dismantlement of Israeli enemy states which can only be heralded chaotic and destabilizing events.            

This, of course, means the ‘new normal’ Israel seeks to set in place with the launch and promotion of its connectivity projects is unlikely to be anything resembling peaceful. Egypt and Jordan as allies have been easily subsumed into Israel’s hegemonic connectivity paradigm and Tel Aviv certainly intends on finding a way to apply it to its enemies as well.

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