A door leading to a wide range of businesses was opened up as Bahrain and United Arab Emirates (UAE) signed landmark agreements to normalize relations with Israel. The Trump administration hosted the historic agreement on 15th September 2020. The UAE is the third country to have diplomatic relations with Israel.
For the first time in nearly 50 years, Israeli and UAE companies can directly transact. Numerous private and government entity collaboration deals were announced soon after the agreement. It is seen to be an opportunity for peace, business, and hope.
Multi-national companies seeking to invest in Israel would now no longer face boycotts and counteractions from Arab states. Israeli companies can also establish a presence in Dubai and Abu Dhabi as gateways for access to Middle Eastern markets. With the new relationship ties, the oil, tourism, medical equipment, and pharmaceuticals, and tech and innovation sectors are expected to flourish both regionally and globally.
No other governments in the Arab region have sold oil to Israel in the past. Israel and UAE will both benefit from the oil reserves of the latter. Israel will benefit from purchasing oil directly from a local and reliable partner while UAE will have a large customer in need of its resources.
Tourism is also an area that will gain much prominence with the end of the COVID-19 pandemic. With Etihad’s and Emirates international networks, Israel would be much access to other countries, especially the Indo-Pacific, as there would be direct routes to Tel Aviv through Saudi airspace. Also, Israel’s tourism industry is likely to flourish, especially to the Mediterranean metropolis of Tel Aviv, by attracting Muslim visitors to Jerusalem’s Al-Aqsa mosque compound, Islam’s third-holiest site.
Both UAE and Israel are well known for their technological advancement. Israel is nicknamed ‘start-up nation’ due to its high-tech sector that makes up over 40 percent of the country’s exports. UAE’s recent focus also has been on innovation and its desire to attract tech companies. Cross-border investment flows and broader technological cooperation and the development of their respective knowledge-economies will benefit both countries, with tech and innovation relating to irrigation, desalination, agriculture, healthcare, and cybersecurity to be common interests.
The countries have also signed a collaborative agreement on developing the COVID-19 vaccine. The Abu Dhabi Stem Cells Centre had announced an agreement with Israel’s Pluristem Therapeutics for collaboration in research into regenerative medicine. Moreover, the countries have common interests in research areas such as genetics and diabetes where cooperation is expected to increase.
With this co-operation, the Gulf region will become open to major Israeli global companies and also the country’s small and medium-sized enterprises. There will also be a growth in Israeli exports to the region via the UAE. Both countries will also gain more business opportunities in the future.
