Dr. Hamad Kasasbeh

The Middle East is facing a sensitive stage after statements by Israeli Prime Minister Benjamin Netanyahu about what he calls "Greater Israel," through annexing lands from Arab countries. These statements seem political, but their effects go beyond security.

They also carry economic and social risks that may destabilize the region and affect the global economy. They remind us of the tense period before peace agreements like Oslo and Camp David.

Settlement projects in the West Bank and attempts to displace Palestinians from Gaza are not only a threat to Palestinian rights. They also put the whole region at risk. This could stop development and increase political and social tension.

The political escalation brings tough challenges to regional economies. It raises insurance costs for investments and big projects. It affects the flow of foreign capital, especially in Gulf states, which are important financial centers. Threats to trade routes, ports, and airspace increase transport and shipping costs. This pushes up prices of goods and services and worsens inflation.

These tensions also harm global supply chains, especially in energy, gas, and fertilizers. Any disruption raises prices worldwide. Importing economies will struggle, and central banks may change their policies. Food markets also suffer, as grain and fertilizer prices rise, threatening food security in many regions.

Foreign investments in the region will face risks. This may lead to capital flight to safer markets, harming local currencies. Global markets, already sensitive to geopolitical tensions, may see big swings that reshape international investment.

The effects will not stop in the region. Europe depends more on Middle Eastern gas after the Ukraine crisis. The United States sees the region as strategic for energy security and trade interests. But continued U.S. unconditional support for Israel may weaken its influence and endanger its economic interests. This is especially true if Arabs and Muslims form a united front and use economic pressure effectively.

Economic boycott, if reactivated and modernized, can be a strong tool. The 1973 oil embargo is an example. Today, new methods can be used, such as redirecting investments, limiting trade with Israel’s supporters, and building ties with rising economies in Asia and Latin America. This can increase Israel’s isolation.

What is needed is not only condemnation. It requires a full strategy that combines economy, diplomacy, and media. Active moves in international organizations are also needed to stop expansion plans. Without such a collective effort, the region will face repeated instability. Recognizing an independent Palestinian state with East Jerusalem as its capital is not only a political demand. It is a strategic need for Middle East stability and global economic security.