Can Israeli-Emirati business ties survive the Gaza war?
IN 2020 MIDDLE EASTERN commerce was transformed. The United Arab Emirates (UAE) and a few other countries signed the Abraham Accords with Israel, normalising relations between the Jewish state and some of its Arab neighbours. Israeli tourists flooded into Dubai on the first ever direct flights. In the first eight months of 2023 Dubai welcomed almost 230,000 travellers from Israel, 73% more than in the same period last year. Nowadays travel agencies in Tel Aviv even offer bar-mitzvah tours in the emirate, with pit stops at kosher restaurants.
Business dealings have blossomed, too. The UAE-Israel Comprehensive Economic Partnership Agreement came into force in April. Official trade between the two countries is expected to surpass $3bn this year, from nothing in 2019. Last year Abu Dhabi’s sovereign wealth fund, Mubadala, reportedly invested $100m in six venture-capital (VC) funds based in Israel or focused on Israeli startups. It also bought a $1bn stake in an offshore natural-gas field from NewMed Energy of Israel. Israeli technology companies such as Liquidity Group, a fintech darling, have opened research-and-development centres in the UAE. Israeli and Emirati universities have forged research partnerships on things like artificial intelligence.
All of this progress is now at risk as a result of the war raging between Israel and Hamas. Since the conflict erupted, reports one Israeli entrepreneur, many Emirati contacts have gone silent. An Israeli-American investor who splits his time between Dubai and Tel Aviv worries that even after the conflict abates, Arab firms will think twice about transacting with Israeli ones.
2023-11-02 09:17:57
Original from www.economist.com
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