Yemen War Disrupts Saudi Arabia's Ambitious Plans, Offering Israel Strategic Opportunities

The ongoing conflict with the Houthis in Yemen is exacerbating Saudi Arabia's economic challenges and jeopardizing the ambitious projects of Crown Prince Mohammed bin Salman. This situation presents Israel with a potential opportunity to strengthen its regional standing and advance the strategic trade corridor linking Asia and Europe through the port of Haifa, according to an analytical article by economist Shlomo Maoz published in the Israeli publication Maariv.

Maoz argues that Riyadh's inability to protect its critical infrastructure from Houthi attacks has exposed the kingdom's vulnerability. Rising military expenditures, canceled international flights, and the need to reallocate budget priorities mean that funds intended for economic development may now be diverted to defense. This could hinder the "Vision 2030" program, designed to reduce the country's reliance on oil revenue, and impact major investment projects like the futuristic city NEOM, which is already facing financial and technical hurdles.

The regional instability also affects the India-Middle East-Europe Economic Corridor (IMEC), a project intended to connect India to Europe via the Persian Gulf, Saudi Arabia, Jordan, and Israel, with Haifa serving as a key European gateway. However, the conflict and Saudi Arabia's reduced development spending are slowing IMEC's progress. Meanwhile, Turkey is promoting an alternative land route bypassing Israel, though instability in Iraq and the presence of pro-Iranian militias pose risks to that initiative.

Maoz suggests that if IMEC continues to face delays, China could become a major beneficiary through its "Belt and Road" initiative, expanding its trade influence while weakening Washington's position in the competition for Eurasian transport routes. The economist believes Israel should leverage Saudi Arabia's difficulties to foster bilateral ties, proposing cooperation in intelligence, air defense, and technology, potentially with U.S. support.

In return, Maoz suggests Israel should seek Saudi Arabia's accession to the Abraham Accords and secure guarantees for IMEC's route through Haifa. This would bolster regional cooperation and counter alternative routes. He highlights Israel's advanced tech sector as a potential basis for mutually beneficial collaboration, contrasting it with Saudi Arabia's continued reliance on raw material exports despite its oil wealth. The economist concludes that bin Salman faces a difficult choice between pursuing his grand projects amid rising security costs or revising the kingdom's development strategy, while for Israel, this presents a chance to strengthen economic and political ties with Riyadh and maintain a crucial role in the future trade corridor.