The New Geopolitics of Energy
June 13, 2021, marked the end of an era in Israel. After 12 years as prime minister, Benjamin Netanyahu was voted out of office by the narrowest of margins, 60 to 59. In his place, the parliament chose a coalition government, to be led by the conservative Naftali Bennett and the centrist Yair Lapid.
Even excluding his first, three-year stint as prime minister in the late 1990s, Netanyahu was Israel’s longest-serving leader, and he so dominated Israeli politics that it was difficult to imagine that anybody could ever replace him. Indeed, it took four elections over two years and the collaboration of eight opposition parties to finally remove him from office. The effort required is a testament to his unmatched survival skills in a political system that requires endless maneuvering just to stay in place.
Netanyahu will be the first to claim that he did more than just survive, and that is true. His Reaganesque policies of privatization, deregulation, tax cuts, bureaucratic reductions, and banking reforms did much to boost economic growth and fund the rise of Israel’s high-tech juggernaut, even though they increased inequality. During his tenure, a million new jobs were created, GDP grew by 50 percent, and exports doubled. And although he bungled the management of the COVID-19 pandemic early on, he did secure an impressive number of vaccines and distribute them quickly.
Netanyahu also parlayed Israel’s formidable intelligence capabilities, military prowess, and reputation as the “startup nation” into a prominent role for his country on the world stage. Relations with India, China, Russia, Africa, and Latin America burgeoned. So did strategic cooperation with Arab states, especially as the threat to Israel’s neighbors from Iran and the Islamic State (or ISIS) waxed and as their faith in the reliability of the United States waned. Although he ruptured relations with neighboring Jordan, Netanyahu’s crowning achievement was the normalization of relations with the United Arab Emirates, Bahrain, Sudan, and Morocco under the umbrella of the Abraham accords, signed in 2020.
For all these achievements, as time went on, Netanyahu became more narcissistic, arrogant, and paranoid. These were the flaws that led to his undoing and that explained his failures in relations with the United States and the Palestinians, both of which he leaves in poor condition. Now, the new Bennett-Lapid government, with its razor-thin majority, is tasked with repairing the damage.
From early on, Netanyahu was convinced that the press was his enemy. He was determined to manipulate the message by gaining control of media outlets, convincing the American billionaire Sheldon Adelson to establish a free newspaper to carry his message and using his position as communications minister to shape television and Internet coverage. This obsession led him to abuse his power and resulted in his indictment, in 2019, on charges of bribery, corruption, and breach of trust. In the process, Netanyahu so mistreated his staff and advisers that three of his closest aides are now testifying against him in that trial.
Similar behavior turned his political partners against him, too. Ironically, although Netanyahu succeeded in using his populist appeal to drive the Israeli polity to the right, his politics were so divisive that he managed to split his base. In the end, three right-wing parties joined the effort to bring him down. In his ever more desperate attempts to secure a majority, he brought new players into the political mainstream, legitimizing far-right Jewish extremists and Ra’am, an Arab Islamist party that he had previously marginalized along with the other Arab political parties. In the process, Netanyahu engineered his own downfall: first, the Jewish extremists vetoed a government with Arabs in it; then, the newly legitimized Arab Islamists joined the coalition against him. It was a classic tale of hubris.
Netanyahu engineered his own downfall. It was a classic tale of hubris.
The same self-destructive instincts ruined Netanyahu’s relations with the United States, Israel’s most important source of support, without whose backing none of his achievements on the world stage would have been possible. Ensuring bipartisan support had been the carefully cultivated approach of all previous Israeli prime ministers. But as U.S. politics became more polarized, Netanyahu deliberately chose to side with Republicans and their evangelical and Orthodox Jewish voters. He judged liberal Jews, who make up the bulk of the American Jewish community and are a mainstay of the Democratic Party, as unreliable. So he abandoned them.
Netanyahu pitted Republicans against Democrats in his failed effort to thwart the Iran nuclear deal and then embraced Donald Trump’s divisive politics, drawing the U.S. president into his increasingly desperate attempts to get reelected. That secured him the move of the U.S. embassy to Jerusalem and U.S. recognition of Israeli sovereignty over the Golan Heights, but those interventions were not sufficient to help him achieve a majority. In May 2021, the chickens came home to roost when the progressive wing of the Democratic Party harshly criticized Israel’s efforts to defend its citizens against Hamas’s rocket attacks and called for the conditioning of U.S. military assistance; some of Israel’s strongest Democratic supporters in Congress spoke out, too. Netanyahu had been warned repeatedly that it was a mistake to put all Israel’s eggs in the Republican basket, but he thought he knew American politics better.
Nowhere have Netanyahu’s destructive impulses been more damaging to Israel’s future as a Jewish and democratic state than in his treatment of the Palestinian issue. In 1998, during his first term as prime minister, he reluctantly went along with the bargain enshrined in the 1993 Oslo accords—territory for peace—and grudgingly conceded a mere 13 percent of the West Bank to Palestinian rule. When that led to the collapse of his first government, he vowed never to repeat the exercise. Upon his return to the prime minister’s office eight years later, he paid lip service to the two-state solution but was never prepared to risk his base to achieve it. Instead, he pursued a divide-and-rule policy toward the Palestinians, building up Hamas in Gaza and weakening the Palestinian Authority in the West Bank. All the while, he ensured that Jewish settlers expanded their footprint in the West Bank.
Aided by the Palestinians’ resort to violence and incitement, Netanyahu manipulated the Israeli public into believing that they had no partner on the Palestinian side and therefore needed to make no concessions to advance peace. In a sign of just how successful this effort was, in the last four election campaigns, the parties of the left-wing peace camp did not dare mention the Palestinian issue.
Nowhere have Netanyahu’s destructive impulses been more damaging to Israel’s future as a Jewish and democratic state than in his treatment of the Palestinian issue.
When a credulous Trump peace team led by the president’s son-in-law, Jared Kushner, came along, Netanyahu convinced them to cut-and-paste his conception of a two-state solution into what the president called “the deal of the century” and try to impose it on the Palestinians. The plan involved what Netanyahu termed a “state-minus” for the Palestinians, with an emphasis on “minus”: the Palestinians would be denied the territory, sovereignty, contiguity, and capital in East Jerusalem necessary for an independent and viable state. That humiliation was to be combined with Israeli annexation of the Jordan Valley and all the West Bank settlements even before negotiations began.
Not surprisingly, the Trump peace plan was dead on arrival. But that nevertheless served Netanyahu’s purposes. The prime minister had calculated that the threat of annexation would force the Palestinians to accept Trump’s offer. It didn’t, but someone else knocked on his door: the Emiratis, who offered full normalization of relations in return for his commitment to drop annexation. Normalization with three more Arab states followed, enabling Netanyahu to proclaim he had secured “peace for peace” deals involving no concessions to the Palestinians. He thereby reinforced the illusion that Israelis could have peace with the Arab world without peace with the Palestinians—until in May 2021, 3,440 rockets were fired at them from Gaza, and most of the world condemned Israel’s response as excessive.
The Bennett-Lapid government offers a chance for a fresh start. It will be the first-ever coalition spanning the far left to the far right that includes an Arab Islamist party and excludes the Orthodox Jewish parties. With women filling nine of the 27 ministerial posts, it also moves Israel closer to achieving gender parity in the cabinet. According to the deal the coalition struck, Bennett will lead for the first two years with Lapid as his foreign minister. Then, Lapid will replace Bennett, and Gideon Saar, the leader of another right-wing party, will replace Lapid as foreign minister. Bennett will become interior minister.
What can this new government, with its fragile majority, do to repair the damage of the Netanyahu era? Bennett is a young, fast-moving, hard-driving, ambitious politician who has declared that all the members of his coalition will have to check their ideological ambitions at the cabinet room door. Lapid, for his part, has demonstrated an unusual willingness to sublimate his ego to the higher cause of removing Netanyahu from office and admirable skill in patching together this coalition of opposites. They trust each other and have worked well together in a previous Netanyahu government.
The Bennett-Lapid government offers a chance for a fresh start.
Their goal will likely be to calm things down. The two leaders are keen to demonstrate that they can deliver on the things Israelis care about: economic recovery from the pandemic; improvements in health care, infrastructure, and education; and a reduction in poverty (more than one in five Israelis still live below the poverty line). These are bread-and-butter issues that all members of the coalition can agree on. They also agree on directing significant economic resources to the neglected Arab sector, which will help cement Arab support for the coalition.
In their efforts to hold their coalition together, Bennett and Lapid will be aided by the fact that Netanyahu has no intention of going quietly into the night and will be out there every day reminding their coalition partners why they acted together to get rid of him. His ugly speech in the Knesset debate prior to the vote on the new government—in which he belittled Bennett, claimed Tehran would be happy with his appointment, and presented Biden as an adversary—gave them all a foretaste.
Nevertheless, a government of such disparate constituencies will be challenged from the start. With such a thin majority, any one of the eight parties in the coalition can bring the government down. Meanwhile, the prime minister’s power is reduced by the fact that he can fire only members of his own party from the cabinet and can act only with the agreement of the alternate prime minister.
Bennett is already under siege by right-wing critics who claim he has betrayed the cause by joining with parties of the left (even though Netanyahu did so several times). Although he is standing firm, members of his party are beginning to buckle; one voted against the government, another publicly contemplated doing so. Yet there is little Bennett can do to play to his right-wing base without losing his left-wing coalition partners. His only course is to try to produce results.
Settlements will provide an early test of this balancing act. In the waning days of the Netanyahu government, 40 settler families established Evyatar, an illegal outpost on privately owned Palestinian land in the West Bank. Instead of ordering its removal, Netanyahu let it stand, leaving this land mine in the path of the new government. If the cabinet does not quickly order its removal, the settlers will see it as a sign of weakness and build more outposts. But if the outpost is removed, the settlers will regard it as a further betrayal by Bennett and his party members.
Similarly, if the cabinet allows evictions and demolitions to proceed in Arab East Jerusalem and lets right-wing demonstrators rampage through the Arab sectors of the Old City—permitting a repeat of the scenario that set off the explosive escalation in May—it will bring international condemnation and possible renewal of Hamas’s rocket attacks. But if it blocks these activities, the pressure on the right-wing parties in the coalition will grow, and Hamas will claim victory.
None of these stresses is likely to cause the coalition to collapse in the short term. Having contested four elections in the past two and a half years, neither the coalition parties nor the public is interested in a fifth election anytime soon. But they will ensure that Bennett and Lapid will do whatever they can to avoid controversial issues for which there is no consensus in the coalition.
In particular, the two prime ministers are unlikely to welcome any initiative to relaunch Israeli-Palestinian negotiations over a final-status agreement. That is not a problem for the administration of U.S. President Joe Biden, which places little store in the idea. But Biden will want to see some meaningful first steps in the direction of a two-state solution, something Bennett staunchly opposes. In the past, Bennett proposed “autonomy on steroids” as an alternative, in which Israel would encourage improvements in the Palestinian economy, West Bank infrastructure, and the creation of industrial zones to boost Palestinian employment. Previous U.S. presidents embraced this idea, only to be disappointed by the many obstacles to implementation. But Biden’s team will no more want a return of Netanyahu than Bennett and Lapid do, so both sides will have a strong incentive to test whether Bennett’s ideas can provide a way forward.
That applies to another contentious issue: Iran. Like Netanyahu, the Bennett-Lapid government opposes the Biden administration’s plans to return to the nuclear agreement. Bennett called it “a mistake” in his inaugural speech. But the new government will want to show that it can get along with the United States and rebuild Washington’s bipartisan consensus in support of Israel. It will no doubt avoid Netanyahu’s confrontational approach—if for no other reason than that it failed to stop the original nuclear agreement and cannot succeed in blocking a U.S. return to it. That is perhaps the ultimate irony of the Netanyahu era. The prime minister who boasted till the very end that only he could stop Iran’s march to the bomb left office with Iran closer to its nuclear ambitions than ever.
In the end, Netanyahu’s politics became so divisive and his sense of entitlement so great that to have him replaced by a true unity government of eight diverse parties working together for the common good will certainly be welcome to many Israelis. Far from merely surviving, it might even thrive.
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