Mohamed Al Khaja helps push a button to ring the Tel Aviv Stock Exchange’s opening bell, triggering a cascade of golden paper hearts through the gleaming glass building.
Cheers erupt as Mr Al Khaja, the UAE’s ambassador to Israel, then shakes hands with Ittai Ben-Zeev, head of the bourse, and Ahmed Al Zaabi, chairman of the UAE’s financial center Abu Dhabi Global Market.
It’s no ordinary opening of Israel’s main stock market. Instead, it is another milestone in deepening relations between Israel and the United Arab Emirates.
It comes two years after the two countries joined Gulf state Bahrain in signing the historic US-brokered Abraham Accords.
In these statements, the UAE and Bahrain agreed to normalize relations with Israel and establish full diplomatic ties. It ended the decades-long boycott of Israel by all Gulf countries.
Emirati investor Sabah Al-Binali, part of the visiting UAE delegation, beamed as he watched the event in Tel Aviv earlier this month.
“We are witnessing history being made and the steady development of a long, deep and fruitful relationship between natural neighbors in the Middle East,” said executive chairman of investment fund OurCrowd Arabia.
Mr. Al-Binali sees the growing business relationship between Israel and the United Arab Emirates as a win-win situation for everyone.
“There is so much natural synergy between Israeli and Emirati business and technology skills and experience that I expect the results of our collaboration will be even greater than the sum of the already impressive parts.
“We are currently examining joint projects in the areas of logistics, MedTech, AgTech and cybersecurity, to name just a few areas in which work is already well advanced.”
Mr. Al-Binali also pointed out that several business deals had been agreed in principle at the end of last month’s visit.
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Economists agree that the Abraham Accords will result in a significant increase in trade between Israel and the United Arab Emirates. On the one hand, Israel has its strong technology sector, including military technology.
The UAE now has the second largest economy in the Gulf after Saudi Arabia. While the UAE is still dominated by oil sales, they are looking to diversify.
Ketaki Sharma is the founder and CEO of Algorithm Research, a data and economic research company based in Dubai, one of the seven emirates that make up the UAE.
She believes trade between Israel and the United Arab Emirates will exceed $10 billion (£9.3 billion) in the next five years.
“The agreement was signed in 2020 and has already given both Israel and the United Arab Emirates a massive trade boost,” says Ms Sharma.
She points to UN data showing that Israel’s annual exports to the UAE increased from $74 million to $384 million in 2020-2021. At the same time, trade in the other direction increased from $115 million to $632 million.
“Some of the declarations of intent [memorandum of understanding, or outline agreements] signed [between the two countries] include agriculture, clean energy, cybersecurity and smart cities,” says Ms Sharma.
“A Free Trade Agreement was also signed between the two countries in early 2022, resulting in the elimination of tariffs on 96% of goods traded between the nations.”
Israel is said to have broken records in arms sales as early as after the Abraham Accords. According to the Israel Defense Ministry, arms sales peaked at $11.3 billion in 2021, 7% of which went to the UAE and Bahrain.
Israel’s former Defense Minister Moshe Ya’alon (2013-2016) tells the BBC that the main reason is a common security threat in the region – namely Iran.
“For the past decade, Israel and the Gulf States have faced common enemies, namely Iran and its proxies, and while the Palestinian question still stands, the Arab-Israeli conflict no longer exists.”
However, the Palestinian Authority has slammed normalization deals with Israel, accusing such Arab states of selling their cause.
Meanwhile, outside the Gulf, Morocco has also signed a similar normalization agreement with Israel. So has Sudan, although progress between that country and Israel has stalled.
Mr. Ya’alon is now Chairman of Synaptech, an Israeli-led investment fund based in Abu Dhabi.
He believes defensive alliances are a key component of Israel’s new relationship with the Gulf states. But for reasons of national security, he can’t give many details. He only confirms: “We found a way to work together on security.”
Mr Ya’alon insists there are many other areas of growth as well.
“Gulf leaders realized that they needed more than oil, like high tech, sophisticated desert agriculture, exploitation of water, etc.,” he says. “In Israel, we’re fortunate to have developed these technologies, so we have a lot of common interests.”
Agreements between Israeli and UAE companies are also being signed in the energy sector. In September last year, Israeli company NewMed Energy (then Delek Drilling) announced the sale of its 22 percent stake in Israel’s offshore Tamar gas field to United Arab Emirates-based company Mubadala Energy for $1 billion.
NewMed had to find a buyer in order to comply with government competition rules.
“The agreement we signed with Mubadala was a significant step in deepening our regional activities and is part of our aim to strengthen our ties with the countries of the region,” says NewMed Managing Director Yossi Abu.
Mas Watad is a Palestinian citizen of Israel and co-founder and president of the Arabic-language diet app and website Dawsat.
Along with partner Tally Zingher, they recently expanded into the Gulf thanks to the Abraham Accords.
She says the agreements were “groundbreaking” as she and her team can now move freely between Israel and the United Arab Emirates and Bahrain. Ms Watad was also able to relocate her family’s home to Abu Dhabi.
“The UAE wants to be a leader on some of the most important issues, with health being at the forefront,” she says, adding that the Abraham Accords allow Dawsat to see their “full impact and impact in the Arab world.”
Ms Sharma says she hopes other countries in the Gulf region will now seek their own deals with Israel as they “see favorable outcomes from the UAE’s experience”.
“It’s just the beginning,” she says, “we’re all looking to the future with optimism.”
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