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Gaza And Trump’s ‘Expanding the Canvas’ Strategy
Relevance: GS 2 – Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
Why in the News?
- Geopolitical Shift in West Asia: The region is undergoing a strategic reconfiguration, with Saudi Arabia playing a key role in shaping its future.
- On February 4, 2025, Trump proposed a dramatic resolution to the Gaza conflict.
- “Expanding the Canvas” Strategy: Known for his dealmaking approach, Trump suggested a radical solution to break the impasse.
- Depopulation of Gaza: His plan involved relocating Gaza’s 2.3 million residents to Egypt and Jordan.
- S. Development Project: The United States would take over Gaza, transforming it from a “demolition site” into a global luxury riviera.
- The proposal sparked intense debate due to its humanitarian, political, and legal implications.
Trump’s Proposal and Regional Reactions
- West Bank Resolution on the Horizon: Trump hinted at unveiling another proposal for the West Bank within four weeks.
- Praise for Saudi Arabia: Both Trump and Israeli Prime Minister Benjamin Netanyahu commended Saudi Crown Prince Mohammed bin Salman (MbS), suggesting that Saudi Arabia might soon join the Abraham Accords.
- Saudi Arabia’s Firm Stance: In response, MbS made it clear that Saudi Arabia would not establish ties with Israel without the creation of a Palestinian state.
- Mixed Reactions to Trump’s Proposal:
- Some saw it as a bold, characteristic move from his playbook of grandiloquent statements.
- Others viewed it as a colonial-style land grab in an already volatile region.
- The proposal’s extreme nature appeared designed to jolt stakeholders into negotiations, forcing them to counter with a more balanced settlement.
Geopolitical Reconfiguration in West Asia
Key Contextual Aspects
- Regional Upheaval: After intense violence since October 7, 2023, West Asia is on the brink of a major geopolitical transformation.
- Saudi Arabia’s Emerging Role: With external support, Saudi Arabia may become a key architect of this reconfiguration.
Impact of 16 Months of Hostilities
- Shattered Assumptions: Long-standing beliefs, such as Israeli military dominance and the end of the Syrian civil war, have been challenged.
- Weakened Axis of Resistance: Iran’s strategic influence from the Red Sea to the Mediterranean has been disrupted, though a resurgence remains possible.
- Israel’s Pyrrhic Victory: Despite military success, Israel faces significant internal and external repercussions.
Major Political Challenges for West Asia
- Heightened regional polarization, diminished trust, and a cycle of revenge.
- Unresolved conflicts, including the Israel-Palestine issue, Iran’s nuclear ambitions, Kurdish nationalism, and the Yemeni crisis.
- The unpredictability of Trump’s second term adds further instability.
- Unconventional Diplomacy: His aggressive, transactional approach and tendency to overbid often prove counterproductive.
- Changing Global Landscape: The geopolitical realities of West Asia and the world have shifted since his first term.
- Palestinian Statehood as a Key Issue: The Gaza war has reinforced the centrality of Palestinian statehood, complicating Trump’s efforts to expand the Abraham Accords.
- New Political Realities in the Region: He must navigate the increasing influence of ultra-religious Jewish groups in Israel and the HTS-led factions in Syria.
- Economic Focus vs. Global Challenges: Despite prioritizing U.S. economic recovery, Trump remains drawn into international conflicts.
Economic Issues in West Asia
Conflict-Driven Economic Challenges
- Reconstruction Costs:
- Gaza: Rebuilding 170,000 destroyed houses estimated at $50 billion.
- Lebanon: War-related damage estimated at $8.5 billion.
- Syria: Civil war damage over $500 billion.
- Humanitarian vs. Political Resolutions: While humanitarian aid is urgent, lasting economic recovery depends on political stability.
- Western Sanctions: Economic sanctions further obstruct recovery efforts in several conflict-affected nations.
Structural Economic Challenges: Hydrocarbon Dependence:
- The region remains heavily reliant on oil and gas, which are vulnerable to market fluctuations.
- Global demand for hydrocarbons is expected to peak by the end of the decade.
Trump’s Policies and Market Impact:
- Withdrawal from the Paris Climate Accord and the “Drill, baby, drill” campaign signal a shift in energy policies.
- Advocacy for lower oil prices raises questions about whether he is solving or exacerbating the region’s economic challenges.
- The U.S. shale industry, though dominant, is highly price-sensitive—low oil prices could render shale extraction unprofitable.
- An oil surplus could hurt West Asian economies, which are expected to fund major post-war reconstruction efforts.
Global Trade and Currency Pressures
- Tariffs and Sanctions: Trump’s aggressive trade policies have disrupted global trade and investment flows.
Stronger U.S. Dollar:
- West Asian currencies, pegged to the dollar, have also strengthened.
- This reduces their economic competitiveness and complicates diversification efforts beyond the oil sector.
Spotlight on Saudi Arabia
Evolving U.S.-Saudi Relations
- Need for a New Partnership Model: The 80-year-old “security for oil” alliance must evolve to address West Asia’s crises.
- Saudi Economic Strength:
- Largest economy in the region with a $1.07 trillion GDP.
- Saudi Public Investment Fund (PIF): Assets worth $930 billion.
- Saudi Aramco: Market capitalization of $1.79 trillion.
MbS’s Leadership and Regional Strategy
- Visionary Leadership: MbS aims to position Saudi Arabia as the leader of the Arab and Islamic world.
Strategic Moves by MbS:
- Hosted two Arab-Islamic Summits on the Gaza conflict.
- Ended Saudi involvement in the Yemeni civil war.
- Normalized relations with Iran and Qatar.
- Strengthened ties with Russia and China without alienating the U.S.
- Played a moderating role in OPEC and OPEC+ as the world’s largest oil exporter.
Saudi-U.S. Investment Talks: Trump-MbS Negotiations:
- At a Davos videoconference, Trump claimed MbS offered to invest $600 billion in the U.S.
- Trump asked him to “round off” the investment to $1 trillion.
- This highlights Saudi Arabia’s economic leverage and regional influence.
Challenges in the Post-Gaza Landscape: Shifting Saudi Position on Israel:
- Before the Gaza war, MbS negotiated hard on joining the Abraham Accords, demanding:
- A U.S.-Saudi security treaty.
- Access to nuclear technology.
- Advanced U.S. weaponry.
- After 16 months of war, MbS now insists on a clear path to a two-state solution, which Israel rejects.
Potential Role in Regional Reconstruction
- Saudi Leverage in Diplomacy: MbS can fund post-war reconstruction and rally Arab nations toward a diplomatic settlement.
- Trump’s Challenge: Convincing Israel’s leadership to adopt a more flexible stance beyond its survival-focused policies.
- The Big Question: Whether the Trump-MbS dynamic will spark a trillion-dollar investment deal or simply serve as a stabilizing force in war-torn West Asia.
Mains Question:
Discuss the evolving geopolitical landscape of West Asia and the implications of Trump’s policies on regional stability and economic reconstruction. (250 words)
