The Political and Economic Impacts of the Sharm El-Sheikh Peace Agreement on the Middle East
The recent ceasefire agreement between Israel and Hamas, brokered by U.S. President Donald Trump, has sparked significant political and economic shifts in the Middle East. The deal, which includes the release of hostages and a temporary truce in Gaza, is expected to reshape regional dynamics, particularly in the foreign policies of Arab states.
Last week, the first phase of Donald Trump’s 20-point peace plan was finalized, leading to a temporary ceasefire in Gaza and the release of Israeli hostages. The agreement, which was achieved under U.S. pressure and with the support of Arab countries like Saudi Arabia, the UAE, Egypt, and Jordan, marks a turning point in the Gaza crisis. The plan includes the release of all Israeli hostages (both alive and deceased), the exchange of Palestinian prisoners, and the phased withdrawal of Israeli forces from Gaza.
Hamas, albeit reluctantly, agreed to the release of hostages and the transfer of Gaza’s administration to a technocratic Palestinian committee, though it insists on maintaining its influence.
The ceasefire agreement, mediated by Qatar and Egypt, has four main implications for the foreign policies of Arab states:
- Normalization of Relations with Israel:
The agreement accelerates the normalization of relations between Arab countries and Israel, building on the Abraham Accords. Countries like the UAE and Bahrain, which previously benefited from the Accords, are now key partners in Trump’s “Peace Committee.” This normalization reduces regional tensions and strengthens diplomatic ties, while also isolating Iran diplomatically. - Economic Reconstruction of Gaza:
Arab countries have committed to funding the reconstruction of Gaza, which is expected to boost regional trade. Egypt and Jordan have pledged $5 billion for infrastructure, reducing logistical costs by 20%. The UAE is also investing $2 billion to rebuild Gaza’s port, which could increase Palestinian exports by 25%. - Weakening Hamas and Iran’s Influence:
The disarmament of Hamas and the transfer of administrative control to a technocratic committee reduces Iran’s influence in the region. Saudi Arabia and the UAE have pressured Hamas to limit Tehran’s role, cutting off financial support from Iran and weakening the Hamas budget. - Regional Security:
The deployment of Arab forces in Gaza is expected to enhance regional security. Jordan and Egypt are sending 5,000 troops, which could reduce the likelihood of attacks by 35%. This move aims to stabilize the region and ensure the security of Gulf countries.
The Next Steps for the U.S. and Israel:
The next phase of Trump’s plan involves the complete withdrawal of Israeli forces from Gaza, the deployment of Arab troops, and the formation of a temporary Palestinian government. The U.S. is expected to send 5,000 troops to ensure security and commit $50 billion for reconstruction. Israel, under Prime Minister Netanyahu, remains focused on the disarmament of Hamas.
