Investors in Israel and the UAE are currently moving to conclude deals in a business environment undergoing transformation due to the diplomatic breakthrough between the two countries. The recent agreement between the two countries paves the way for establishing direct flights and communications links, exploring joint ventures, and in some cases bringing trade that has long been underground. This was stated in a report published by the Wall Street Journal.
Bilateral relations
Emirati billionaire Khalaf Al Habtoor, owner of one of the largest Emirati conglomerates, the Al Habtoor Group, has been reported to have launched talks with Israir Airlines, a domestic Israeli airline, to start direct commercial flights.
Avi Eyal, managing partner of Entree Capital, based in Israel, says that he has received dozens of letters and phone calls from Israelis and Emiratis interested in entering the other market, explaining that he is working with Emirati partners to establish some kind of chambers of commerce or professional organizations to formalize relations. Bilateral commercial.
The report said that the small Israel-based company, Bo & Bo Ltd., which is owned by Gadi Nir and sells physical therapy machines that monitor a patient's progress, can now proceed with direct sales to the UAE, a less expensive option. From moving some of its operations to China, which would have allowed it to enter the market before the two countries moved to establish formal relations.
Under an agreement announced last week, an unnamed Emirati company will become the exclusive distributor of BO&P in the Gulf for about $ 1 million annually that the distributor pays the Israeli company. Nair described this amount as staggering for a small company in Israel.
Before the move to formalize relations, conducting business between the two countries required a certain degree of anonymity, and deals were concluded through subsidiaries in third countries such as Singapore or Cyprus.
External parties
Direct calls between the parties require external numbers, and virtual private networks were needed to access sites blocked by governments, and some used foreign passports to travel between the two countries, according to the same report.
And because trade between Israel and the UAE was largely conducted through third countries, there are no official figures available on its volume, while the Tony Blair Institute for Global Change estimated that the total Israeli trade with Gulf countries is about one billion dollars.
Investors in both the UAE and Israel hope that the rapprochement will result in more opportunities than "cold peace" with Egypt and Jordan (after more than a quarter of a century of peace). Egyptian exports to Israel in 2018 amounted to about half a billion dollars, with imports less than 115 million dollars. According to the World Bank. The volume of trade with Jordan amounted to less than 80 million dollars in each direction.
The report went on to say that one of the positive aspects is that the UAE does not share the history of Egypt and Jordan in the conflict with Israel, as the UAE did not gain its independence from Britain until 1971, that is, after fighting two of the three Arab-Israeli wars, and its population consists of an overwhelming majority of foreigners who are from They are more likely to deal with Israel than the Egyptians and Jordanians are.
Since direct flights between Israel and the UAE will require permission to fly over at least one neighbor, Saudi Arabia, which still does not recognize Israel, Israeli Prime Minister Benjamin Netanyahu has said he is trying to obtain this permission, and Israel and Sudan said last Tuesday that they are working on an agreement to confer The official nature of the relations, according to the report.
Overt normalization
Hadi Amr, the former US deputy special envoy for Israeli-Palestinian negotiations, said, "There was indeed an Emirati-Israeli relationship of some kind, so why pretend it did not exist, let us acknowledge that and work on that as a reality."
An enterprising Emirati venture capitalist who asked not to be named said the business is a great way to normalize the relationship between two people, and perhaps bridge any gap as a result of the accumulated history.
One Emirati capitalist - among those willing to look for deals in Israel - said he began studying Hebrew 18 months ago out of a "attraction" to Israeli history and music, adding that given the "political stubbornness" in the region, he did not expect to be able to benefit from This skill is so far.
He indicated that he had hoped something like this would happen, saying, "I wanted people to communicate and understand each other."
The deal between Israel and the UAE may pressure other Arab countries to follow the example of the Emiratis, but most Arab countries have resisted rapprochement with Israel until a permanent peace agreement is reached with the Palestinians, the report says.
Israeli Eril Margalit, founder of the "Jerozali Venture Partners" company that invests in startups in Israel, America and elsewhere, said that in recent years about 10 of his portfolio companies either sold products to Emirati companies or participated in investments with them, and that the pace of deals is increasing. Quotes the Wall Street Journal report.
Margalit added that the ability to go and fly on commercial flights without special permission, the ability to host companies in Israel, participate in a conference, and work with a number of companies, all of these things will make it easier.