The coincidence of Britain's referendum on a withdrawal from the EU, the Turkey-Israel agreement and the Turkey-Russia rapprochement are important issues to be addressed. First of all, Britain's decision on secession from the EU has revealed that the world trade order must be redesigned given that the Transatlantic Trade and Investment Partnership (TTIP), which is planned to take effect between Britain and the U.S., is virtually suspended now. This being the case, the agreement between Turkey and Israel becomes crucial as the world trade order will be re-created through one-to-one agreements between countries like Turkey, Iran and Israel, which have strategic positions in the region. The Turkey-Russia rapprochement brings Russia's Eurasian Union project up for discussion as an alternative to the EU from a broader perspective.
Israeli Prime Minister Benjamin Netanyahu's statement that the agreement will have "immense" economic consequences reveals that the main dynamics of the agreement are based on the economy. The beginning of the normalization of relations between Turkey and Israel is not the Turkish and Israeli governments' relief maneuver that is limited to realpolitik. As such, the agreement goes beyond the normalization of relations between Turkey and Israel and indicates one of the most important steps taken to normalize the Middle East. Turkey has not taken a step irrespective of Palestine and its interests and will care about Palestine throughout the whole process. All economic consequences to rise from this agreement will have a direct impact on the Palestinian people.
To evaluate "immense" economic consequences as Netanyahu said, we need to look at the past and present economic foundations on which Israel and the region's economy is based.
Following World War II, Britain was aware that the West Bank and Gaza Strip would be an important and central trade route that would control energy routes reaching the Mediterranean. Therefore, as of 1945, Britain encouraged the Palestinians and Jews deployed in the British army to be engaged in economic activities in agricultural and manufacturing industries in the region. The investments and the line of business introduced by Jewish entrepreneurs increased and grew into an economic dominance in a short time. The Jews regarded the emerging situation as an opportunity to found a state on the promised lands with their economic dominance, while the Arabs said the global economic support given to the Jews made them slaves on their own territories.
This dual situation showed the two hegemonic countries of the system - Britain and the U.S. - that it was not possible to achieve a homogeneous economy on this territory and imposed the inevitability of founding a Jewish state there. In 1947, a British High Commissioner serving in the region reported that Jewish and Arab markets completely broke away from each other, making it impossible to carry out economic activities under those circumstances.
Consequently, Britain and the U.S. divided Palestinian territory into three parts and officially declared the Israeli state in 1948. The Gaza Strip was put under Egypt's control and the Palestinians remaining within the Israeli borders began abandoning the Palestinian land and migrating to the West Bank and Gaza Strip. It was known that this would happen, given that this migrating Palestinian population, which was removed from their territories, would serve as cheap labor force for the Israeli economy, which would be developed by Britain and the U.S.'s war industry.
From 1948 to 1967, the Israeli economy rapidly grew through war indemnities, the capital that was transferred from confiscated agricultural lands and Jewish communities. When it came to 1967, however, the economy, which reached its peak through defense industry investments, began having problems with spending, renewal and raw material supply, giving rise to the 1967 Arab-Israeli War, which marks the beginning of the invasion of the West Bank and Gaza Strip. This war enabled the Israeli state economy to directly access market and labor force resources that it indirectly obtained previously.
Today, the Israeli economy can no longer survive through cheap labor force, agricultural production and capital inflows from abroad. It wants to further commercialize its high technology in military and agriculture on a global scale and control Eastern Mediterranean energy resources. This does not concern the Israeli economy alone, but also directly concerns Britain and the U.S. as before. This is because all trade and energy corridors reaching Europe from the Pacific region and their connection to the Mediterranean pass through the Turkey-Israel economic cycle. As highlighted above, the Brexit has showed that the TTIP will be put into cold storage. As such, the new trade order cannot be established on platforms that ignore countries like Turkey and Iran. So far, the blockade on Gaza, Egypt's military coup, an anti-Erdoğan bloc's efforts to destabilize Turkey and stage a coup all attempted to sideline such strategic countries. Indeed, the rift between Turkey and Russia was a trap for both countries. They aspired to bring the old Turkey back to destabilize the country.
Previously, it was easy to achieve this goal with a Turkey that had no claims in the Mediterranean and that remained indifferent to Caspian, Iraqi and Mediterranean energy resources, trade routes and markets. Military superiority and invasions were enough to achieve this in the Middle East. However, it is impossible for this strategy to succeed with a rising Turkey that is interested in Caucasian, Iraqi and Mediterranean energy resources today.
Certainly, the Turkey-Israel agreement will have "immense" consequences both in economic and political terms as it will lead to the fair sharing of Middle Eastern and Mediterranean resources, base the economic growth on inclusive and fair sharing and create all-embracing welfare through the equal use of energy, agriculture and water resources. The Turkey-Russia rapprochement will also have immense economic consequences.