The world woke up to the unexpected and astounding news of the peace treaty between the UAE and Israel, making UAE just the third Arab state, after Egypt and Jordan to establish formal ties with Israel. UAE scrapped an economic boycott against Israel which was in place for decades, allowing trade and financial agreements between the countries.
Private and public sector companies on both sides are gearing up to capitalize on the investment and business opportunities thrown open by this historic peace treaty – Abraham Accord signed by the UAE and Israel. With Bahrain also joining the chorus, this accord is expected to be a game-changing initiative that will benefit key economic sectors and bring prosperity to the region.
According to industry sources, major deals are in the pipeline that will foster bilateral trade up to $4 billion by 2022. The two countries have started holding talks to promote bilateral cooperation in major sectors such as aviation, tourism, trade, education, healthcare, food, agriculture, science and technology. Major companies and financial institutions from both countries have already announced their intention to explore possibilities for meaningful cooperation.
Fight against Covid-19
Much before the public announcements by the Health Ministers of UAE and Israel on the partnership in the fight against the novel coronavirus, Israel and the UAE were collaborating to combat the pandemic. Israel Aerospace Industries (IAI) which is Israel’s largest aerospace and defense company, as well as Rafael Advanced Defense Systems are collaborating with Abu Dhabi-based technology company Group 42 for the development of a non-invasive coronavirus screening test.
APEX National Investment of UAE and Israel’s TeraGroup have reached an agreement to conduct studies on the coronavirus.
Israel is known as the “start-up nation” – thanks to its high-tech sector, which contributes more than 40% to Israel’s total exports. The vibrant and tech-savvy nation of UAE stands to benefit from the new partner as the Government of UAE has always ensured an investor-friendly environment and ease of doing business. It is commendable that one-third of all start-ups in the Middle East and North Africa will be based in the UAE. The partnership with Israel, which is the technology sector powerhouse of the world, will bring in huge investments to this industry.
Israel’s Minister for Science and Technology was vocal about their desire to partner in space technology, innovation, agro-tech, also known as agtech, artificial intelligence, fintech and security.
The Israeli ecosystem of high technology is highly advanced and makes up a major portion of Israel’s economy. The percentage of Israelis engaged in scientific and technological studies and the amount spent on R & D in relation to GDP is among the highest in the world. UAE would be keen to have access to the know-how and advanced technology, which will further propel the advancement the nation has already achieved.
UAE has always been keen to leave a mark in Space Technology and partnering with Israel will help the gulf state make giant leaps in developing and operating earth observation satellites and venture into more space missions.
Huge investments are expected in the fields of insurtech, biomedicine, fintech and cyber security.
UAE Minister of State for Food and Water Security and Israel’s Minister of Agriculture and Rural Development have had discussions to cooperate in research and development, aquaculture and agriculture technology.
It is estimated that in 2016, Israel exported $9.1 billion (7.6 billion euros) worth of agriculture technology products. With a population of over 9.6 million people from 200 countries, the UAE has a vast and diverse need for food. The UAE, where less than 1% of the land is arable, United Arab Emirates had already taken steps towards vertical farming and other next-generation planting techniques and now will be able to use Israeli know-how in hydroponics, soil-less crop cultivation and advanced irrigation methodology.
The sensors and thermal imaging technology developed by Israeli scientists that check the soil’s water status and irrigate whenever the plants need water or nutrients will revolutionize farming in UAE. The partnership will also introduce new technologies related to drones and different kinds of cameras to detect any diseases the plant has and manage the plant’s whole lifespan remotely.
Arieli Capital, an investment firm that operates innovation centers in Israel and around the world is in talks with officials in the UAE to promote desert agriculture projects. UAE will send special teams to the Ramat Negev region in Israel to undergo training in innovative desert agriculture. The team will be mirroring the Israeli agriculture methods in the UAE to grow crops like strawberries, blueberries, grapes and tomatoes.
The arid land of UAE is entirely dependent on desalinated water. The fact that UAE uses about 3,688 million cubic meters of desalinated water a year shows how much the Gulf State is dependent on desalinated water. The demand is expected to increase to 5,806 million cubic meters by 2025.
Mekorot which supplies 90% of Israel’s drinking water, is a world leader in desalination, water reclamation and cloud seeding. Its subsidiary offers water solutions and provides desalination solutions worldwide and has expressed interest in being part of UAE’s water security initiatives.
Security and surveillance
UAE has one of the most formidable networks of cameras, which is an integral part of the “Falcon Eye” security monitoring system. Israel is the global leader in surveillance technology, while UAE is a strong base for cybersecurity, technology and surveillance. The cooperation between these two tech-hubs is bound to bring a sense of security and confidence in the region.
As the two nations formalize diplomatic, economic and cultural ties, their citizens are most excited about the travel opportunities as both nations are home to some of the most captivating architectural and archeological wonders in the world.
Israir Airlines has concluded agreements allowing it to start regular direct flights from Tel Aviv to the UAE, while Emirates and Etihad will be scheduling flights to Israel. This move will be a boon for the aviation and hospitality industries, which are currently hit by the coronavirus crisis.
This bilateral tourism will include Muslim pilgrimage to the holy sites in Israel and Israelis visiting the UAE for business and leisure. Israeli businessmen are excited that they will have direct flights to participate in the international Expo scheduled to take place in Dubai next year.
Industry experts expect around 1.25 million tourists travelling between the two countries for tourism and business during the initial stages. Israelis are known to be frequent travelers, with more than half of the population traveling abroad for vacations and business purposes every year. UAE will also become the hub for international travelers going to Israel and for Israelis traveling to India and Far East.
The landmark treaty heralds significant opportunities for oil trade between the two countries which will include both crude and oil products. According to the 2019 statistics, Israel imported 254,000 barrels of oil per day, mainly from Russia and practically nil from the Middle East oil producers. Now Israel will be able to source oil from a trusted partner.
Israeli healthcare specialists are targeting the section of UAE population who goes to the Americas and Europe for advanced medical treatments. Israel’s biggest hospital, Sheba Medical Centre, has signed an agreement with Abu Dhabi based Apex National Investment to facilitate medical care for patients from the UAE.
UAE’s healthcare providers also expect inflow of patients from Israel for aesthetic treatments. There is a huge potential for partnerships between the major healthcare providers in both countries.
Abu Dhabi based Mohamed Bin Zayed University of Artificial Intelligence and Israel’s Weizmann Institute of Science have reached an agreement to work together. The higher education institutes plan to have student exchange programs, joint conferences and sharing of resources. The universities also have plans to launch a joint online AI institute.
The premium Israeli universities now have around 15% Arab students and are keen to intake Emirati students to their tech streams.
ISRAEL – UAE – INDIA CORRIDOR
UAE-Israel-India economic activity will be a mainstream in this tie up as both Israel and the UAE are having huge investments and business activities in India. This corridor will add huge value to the already existing UAE-India business corridor on various sectors and it opens up more collaborative investments by Indian and UAE entities.
First Abu Dhabi Bank, Emirates NBD and Abu Dhabi Islamic Bank
Leading banks in the UAE and Israel have already reached an understanding to explore areas of commercial cooperation to promote sustainable development in the region.
First Abu Dhabi Bank, Emirates NBD and Abu Dhabi Islamic Bank (ADIB) have separately signed Memorandum of Understanding with Israel’s oldest Bank Leumi Le-Israel and the largest bank, Bank Hapoalim to explore areas for cooperation in Israel and UAE as well as in other international markets. The preliminary understanding will support the banking needs of business customers in both countries.
Abu Dhabi Investment Office (ADIO)
Abu Dhabi Investment Office has already announced plans to open a network of international offices to support global companies looking to establish and expand their operations in the Emirate of Abu Dhabi. The first international office will be set up in Tel Aviv and the primary aim of the office will be to facilitate cooperation between companies in Abu Dhabi and Israel with special focus on innovation-technology companies.
Dubai Multi Commodities Center (DMCC)
The diamond exchanges in UAE and Israel announced their understanding to boost diamond trade. Israel has one of the world’s largest diamond industry and is the global leader in diamond polishing while Dubai hosts an emerging diamond trade. The Israeli Diamond Exchange (IDE) will open an office in Dubai, while the Dubai Multi Commodities Center (DMCC), world’s largest economic free zone, will open an office in Ramat Gan to promote collaboration in diamond trade.
DP World and Dubai Customs
DP World and Dubai Customs have reached an agreement with a leading Israeli group to explore opportunities to develop bilateral trade links. DP World has decided to bid jointly with Israel’s DoverTower for the largest shipping hub, Haifa Port. Talks are happening to open a direct shipping route between Jebel Ali and Eilat. DP World currently runs port operations from Brisbane, Australia in the east to Prince Rupert, Canada in the far west.
Dubai Customs has announced its intentions to smoothen the processes needed to facilitate trade between private entities in the two countries. Israel Shipyards and Dubai’s Drydocks World are also exploring possibilities of partnering together.