Monthly Insight: UAE-Israel: The Abraham Accords & The Opportunities it Affords

UAE-Israel: The Abraham Accords & The Opportunities it Affords

by Joelle Niven

 

What does it tell us about the UAE?

On September 15, the historic new Abraham Accords Peace Agreement between the UAE and Israel was signed on the White House lawn. After Egypt and Jordan, this makes the UAE only the third Arab country to normalize relations with Israel, and it is the first of the six Arab Gulf states to do so.

By being the first in the region to take this courageous step, the UAE has initiated closer Arab-Israeli alignment regarding strategic issues and economic opportunities. The agreement also has significant potential to encourage peace not only between governments, but also the people of both nations, in terms of tourism, trade, investment and business opportunities.

The UAE has consistently demonstrated its progressive approach, willingness to make necessary adaptations and to be at the forefront of new initiatives in the region, that create wealth and growth opportunities for its people. The decision to sign the peace agreement with Israel is a continued demonstration of the UAE’s desire to leave the past behind and create its own future, instead of submitting to an old regime.

Areas of collaboration

Both the public and private sectors of the UAE and Israel have shown palpable enthusiasm about the opportunities that will arise for both nations. Early estimates indicate that the normalization of ties could soon see bilateral trade in excess of $10bn (https://www.cnbc.com/video/2020/10/21/well-see-over-10-bn-in-bilateral-invmts-between-uae-israel-ceo.html).

Being two major economic powerhouses in Middle East will help to build capabilities across both countries in sectors like biotech, security, agriculture, education and energy.

It also gives the UAE an opportunity to collaborate on technology and health care with Israel, a leader in both, at a time when combating Covid-19 is every country’s main concern.

For Israel, establishing normal diplomatic ties with Arab countries has long been a strategic goal. It signals greater acceptance in the Middle East and the potential for more commercial ties for a country that has until now conducted very little of its business in its own region. And the hope is that other countries in the region will soon follow the UAE’s example.

Until then, the UAE’s bold decision can provide Israeli companies with a crucial bridge to the wider Gulf region. In addition, the UAE’s hub status between the East and West is well-known, and this will also attract Israeli business transiting to elsewhere in the world.

Israel has earned the well-deserved nickname ‘the start-up nation’, with the largest number of startups per capita in the world (https://apex.aero/articles/startup-nation-israel-become-silicon-valley/). The UAE is well-known for its efforts to attract innovation in the form of start-up incubators, its pro-business regulations and world-class IT and logistics infrastructure. This provides an ideal opportunity for both nations to take advantage of what each other has to offer.

Positive Early Developments

The speed with which collaborative initiatives between the two nations have taken place since the Abraham Accord has been remarkable. The stamp of approval to do business with each other has opened the gates and numerous positive developments are swiftly following.

The UAE, US and Israel have established the $3bn Abraham Fund to help stimulate private sector-led investments across the region. In the banking sector the large UAE and Israel banks are starting to cooperate with one another, and many more firms in the financial services industry are expected.

On 20th October 2020, the UAE and Israel agreed to exempt tourists from both countries from visa requirements when visiting the other country, with the view that free movement of people will offer benefits to the Israeli and Emirati economies – making Emirati citizens the first in the Arab world to not require Israeli entry visas (https://www.thenationalnews.com/uae/government/uae-and-israel-agree-on-90-day-visa-free-travel-for-emiratis-1.1098086).

The most exciting recent development – low-cost airline flydubai announced that it will be the first UAE airline to operate passenger flights from Dubai to Israel from Dubai, with the route launching on 26th November 2020. (https://www.thenationalnews.com/lifestyle/travel/flydubai-to-launch-low-cost-flights-between-israel-and-the-uae-in-november-1.1105541)

Israel is also set to participate in Dubai’s World Expo 2020, which is now scheduled to start in October 2021 due to the coronavirus pandemic.
All these initiatives show that the agreement is not merely on paper, but that both nations are strongly committed to strengthening relations and echo Netanyahu’s sentiments of a ‘warm peace’.

Conclusion

This courageous step by the UAE to turn the tables around, move past history and biases and look at the future, demonstrates the UAE’s progressive and pro-business approach. Driven by leadership that stewards the country as CEOs, rather than politicians, sets them apart in a world that is short of visionary leadership at the country level.

Our clients often ask us to share our thoughts about the sustainability and growth of the country and our reply is always that we trust in the leadership’s deep understanding of the value of credibility, agility and courage to look past the obvious. The move with Israel demonstrates that attitude in a major way and strengthens the case to continue to promote the UAE.

Should you wish to find out more about the opportunities the UAE has to offer yourself or your business, please do not hesitate to reach out to us.

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