Will Israel and Saudi Arabia Normalize Relations Before 2022? + Starlink and Nuclear Deal

Will Israel and Saudi Arabia Normalize Relations Before 2022? + Starlink and Nuclear Deal

In this week's volume of Metaculus Mondays, we'll be staying in the Middle East by turning our attention away from Iran and towards Israel and Saudi Arabia. So not too far a turn.

The primary question we'll be forecasting this is week is whether Saudi Arabia and Israel will establish official diplomatic relations in 2021.

The median community prediction is this event has a 45% chance of occurring, however the individual predictions made by Metaculus members spans a large, flat-topped distribution.

Graph depicting the distribution of community predictions for the Saudi-Israeli Normalization question. Graph shows a clustering around 50%, with a second clustering in the lower-end of the spectrum, with a third and smallest one at the upper-end of the spectrum.

What does that mean? We're not entirely sure, but we feel two things stand out.

  1. The clustering around 50% indicates either a true belief that a positive resolution is a coin toss, or there is a lot of uncertainty within the community about this event's likelihood.
  2. Predictions not-centered around 50% are largely on the lower-end of the spectrum <50% rather than upper-end of the spectrum >50%.

While we feel the first point is some mix of both possibilities, we also find it notable that if someone doesn't predict a coin-toss they are more likely to say the event is unlikely rather than likely.

Question Review

There is very little we have to comment on this question in terms of phrasing or resolution criteria, and it is clear this question carries public significance given the history between Saudi Arabia and Israel, the relative size and strength of both countries, and–most importantly–the recency of the historic Abraham Accords. The one negative point we will mention, however, is this problem does carry a lot of inherent uncertainty which makes it a very time-consuming problem to untangle to answer with any degree of prediction granularity.

Saudi-Israeli Prediction

Our approach to this forecast is similar to last week's on Iran, where we will consider the different perspectives of all three key actors to Saudi-Israeli normalization–Israel, Saudi Arabia, and the United States–and the relevant constraints to each. Then, we will blend these different perspectives together, weight them, and then determine a likelihood of a positive resolution based on a scale ranging from nearly impossible to nearly certain.

The US Perspective

On the surface, the United States would be glad to facilitate the normalization of diplomatic ties between the two countries. Saudi Arabia and Israel are the United States’ two closest allies in the region, and both are integral factors in the Middle East’s stability. Normalizing relations would ease tensions between the two countries that were previously managed by the United States in the long-run. It would also open up new possibilities for United States influence in the region.

There are a number of drawbacks however that make facilitating a deal before 2022 less appealing. First, and as we wrote about last week, the United States plans to rejoin the JCPOA at some point in the future. Working alongside Israel and Saudi Arabia (particularly with the concessions necessary to trigger normalization this year) would make the United States an extremely poor negotiating partner in the eyes of Iran, and could jeopardize the United States’ non-proliferation agenda, something that president Biden and Secretary of State Anthony Blinken have stressed is a priority for this administration.

The Biden Administration has also made it clear that it is reshuffling its foreign policy priorities, and Israel and Saudi Arabia are no longer topping the charts.

  • Why does this matter? It matters because the United States may be less willing to make concessions for the Saudis to get a deal done in the short term. Given King Salman’s seeming lack of excitement to get a deal done either

Moreover, Jordan remains a key United States ally who remains generally opposed to normalization without concrete progress towards a two-state and who Saudi Arabia would be unlikely to easily offend on this issue.

Finally, President Biden has also made it clear that he views the current Saudi Arabian king, King Salman, to be his diplomatic counterpart, not his son Mohammed bin Salman (MBS). While MBS worked closely with Trump on several projects during his administration, his influence may not carry as much weight with Biden.

Israeli Perspective

From Israel’s perspective, getting a deal done with Saudi Arabia to normalize relations would be a huge boon for Netanyahu’s political future, especially with legislative elections coming up next month. It would also be a big win for Israel’s future in the region, as a strong bilateral relationship between Saudi Arabia and Israel would noticeably weaken Iran’s influence in the Middle East.

Additionally, Israel would likely have to make some (possibly minor) concessions in order to make normalization of diplomatic relations between Israel and Saudi Arabia palatable to the public, as well as for Saudi Arabia’s own legacy. While painful in the short term, a deal here could lighten the burden of international criticism and pressure moving forward for Israel, allowing it to play a bigger role in the region.

From a security perspective, Israel is very eager to execute a deal with Saudi Arabia as well. Still an enemy of many state and non-state actors in the region, partnering with Saudi Arabia would be a massive boost to Israeli’s already robust military apparatus both in terms of boots on the ground and military resources i.e. oil.

Saudi Perspective

One key incentive and driver for both Saudi Arabia and Israel is the economic benefit normalization would offer, since both countries have similar and complementary technological, academic, and innovative strengths–with many Israeli strengths closely aligning with Saudi Arabia's Vision 2030 plan.

However, Saudi Arabia’s complicated stance on normalizing relations with Israel is heavily derived from the fact that the oil-powered authoritarian regime has reached a generational crossroads. Salman bin Abdulaziz Al Saud is currently the King of Saudi Arabia, and at eighty-five years old, he has witnessed first-hand the course of Arab-Israeli relations since Israel’s inception in 1948. He is the ruler of Islam’s most holy land, home Sunni masses and the storied cities of Mecca and Medina. In many ways he is the face of the Arab world.

Normalizing relations with Israel, and in turn giving up leverage that ostensibly could have been used to help Palestine, would signal a massive shift in mindset and priorities in the Gulf, and by extension the greater Middle East region. Only taking up the crown in 2015 after the death of his predecessor King Abdullah at age 90, King Salman may also be especially conscious of his legacy, not wanting to cause harm to the Arab world during his tenure.

His son, Mohammed bin Salman (MBS), is from a younger generation however, and has already demonstrated a penchant for exercising Saudi Arabia’s power domestically and abroad. While being known for his incredibly repressive tendencies, including the murder of journalist Jamaal Kashoggi and the imprisonment of his own brother, he has also taken significant steps to paint himself as a modenizer. Women in Saudia Arabia gained the right to drive in 2018 and were recently allowed to join the armed forces as well. While MBS may be inclined to normalize relations with Israel in order to reap economic and military benefits, as well as further weaken Iran, his ability to do so will be severely limited by his father.

Under the previous president, Donald Trump, deference was shown towards MBS on numerous occasions, including Trump’s vetoing of a bill that would have ended U.S.-backing for the ongoing Saudi attacks in Yemen. However, the current Biden administration has explicitly declared that the political dynamics of the past would be bygones. Normalizing of relations between Saudi Arabia and Israel is extremely likely to happen if given a boundless time horizon, but the likelihood that it happens before January 1st, 2022, given that King Salman is still in power, seems much lower.

Blending Perspectives

To determine the effect of these perspectives and constraints, we divided them into three categories (while adding some other minor factors we identified during our research):

  1. Pros - Weighted as Low (+1), Medium (+2), High (+3) effect on normalization by 2022
  2. Cons - Weighted at Low (-1), Medium (-2), High (-3)
  3. Constraints - Weighted at Low (-1.5), Medium (-3), High (-4.5)

We weighted constraints at 1.5x pros and cons because of the effects that decision-making constraints have on geopolitical outcomes are more substantial than preferences derived from pros and cons.

Table depicting the Pros, Cons, and Restrains for The United States, Saudi Arabia, and Israel when it comes to normalizing relations between Israel and Saudi Arabia before 2022. The pros for the US are: long-term stability in region (medium) and momentum (high). The cons are: Jordan (medium). And the constraints are the Democratic Party (low), Congress (medium), Biden's political priorities (high), JCPOA (aka nuclear deal - high). For Saudi Arabia, the pros are: A weaker Iran (high), Israeli tech and innovation (medium), and univeristies (medium). The cons: popular dissent (low). Constraints: King Salman (medium), royal tensions (medium), Jordan (medium). For Israel, the pros are: A weaker Iran (high), Greater access to Saudi oil and innovation (medium), Universities (medium), and greater acceptance in region (high). Israel has no cons. For constraints, they have the election, which is a short-term, medium effect.

Based on a raw aggregate of totals, that puts normalization by 2022 as a -6.5.

  • Only considering Israel and Saudi Arabia, +4.
  • Should Jordan change opinion / be placated, -1.5.

Finally, we have to generally consider the remaining time in 2021. Although Israel and Saudi Arabia have unofficial relations, there are rumors recent talks have degraded over formal normalization. Had the time horizon for this question's resolution have been by 2023, our overall prediction would have no doubt changed greatly.

Given the above perspectives, the balance of factors, and the shortness of time, we find normalization to have a low probability of occurring before 2022. Based on our terminology for predictions,

We predict the odds of Israel - Saudi Arabia normalization before 2022 to be 21%, making it unlikely.

We chose 21% because it is the near middle-point of slightly unlikely and highly unlikely, and felt it best aligned with the balance of factors we determined.

(Although, given the uncertainty we did consider taking an easy arbitrage opportunity too. Only a few less points...)

Graph showing an arbitrage opportunity for question. With a community median of 45%, giving a 46% chance would give you +10 points if normalization didn't happen, and +2 if it did. Win/win!

Iran Nuclear Deal Update

In last week's volume of Metaculus Mondays, we forecasted the likelihood of the United States “rejoining” the Iran Nuclear Deal by 2022. After examining the motivating factors for re-entering the deal as well as the constraints on the side of Iran and the United States, we forecasted that there is a 20% chance the U.S. rejoins the JCPOA this year.

As this prediction is very much subject to changes in the news, however, we also made a point to mention that we would be updating this Metaculus Monday forecast as new, relevant information was released. And as it happens new articles came out that are pertinent to this question.

According to an article in Politico released last week, rejoining the JCPOA “may be a far messier, longer-lasting set of negotiations than what many observers had expected – if it happens at all.”

In its stead, Biden looks prepared to either strike a short-term deal to mitigate Iran’s nuclear progress and work towards longer term solutions, or begin negotiations on a replacement agreement for the JCPOA altogether. Both options, while potentially positive for both Iran and the United States, would not satisfy the criteria initially set out in the Metaculus question. The article also did not suggest any real urgency on either side to make a deal happen.

Then, after negotiations late into Sunday night, it was announced on Monday that Iran would “continue to allow the U.N.’s nuclear watchdog some oversight over its nuclear sites.” While only temporary, the move is likely one that will allow the two countries negotiate in good faith, without asymmetric information leading to distrust and culminating in a security dilemma, tit-for-tat progression. It will also stymie Iran’s enrichment program in the short-term, which gave a scare to West in recent months.

While an agreement is far from in place, it seems that parties are willing to conceded more than they initially let on. This bodes well for future talks between the nations. Given the constraints previously discussed in our last volume, however, and the volatile nature of negotiations at the current moment, Global Guessing is deciding to keep our prediction at 20% for the time being. Keep checking in to his Metaculus Mondays series, however, and news each week may tip the scales in either direction!

Before closing this week's volume of Metaculus Mondays, we want to turn our attention upwards–at the betrayal of our branding–to space.

The final question we are forecasting this week is whether Starlink–Elon Musk's constellation-based, high-speed, full coverage satellite internet service currently under SpaceX–will IPO before 2030.

Given that:

  • Elon Musk has stated Starlink will probably IPO in "several years" once cash-flow becomes stable
  • Tesla was founded in 2003 and went public in 2010 (7 years); Starlink was created in 2015 (2030 would be 15 years)
  • Starlink is currently operating in large-addressable market with very little competition (if any real, at the moment)

It would appear nearly certain (>99%) that Starlink would IPO by 2030. However,

  • There are other ways to make a company public, ranging from SPACs to ICOs, which Elon might do
  • 9 years is a WHILE (#fattails)
  • Elon Musk doesn't want or need your money no more
As a result, we forecast Starlink will IPO before 2030 with an 85% chance–making it likely to occur.

Oh! And the Question Review: Elon go brrrrrrrrr. We like.