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Progress on mutual interests in spotlight as Israel FM visits UAE | Business and Economy News

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Yair Lapid will become the first Israeli minister in history to officially visit the United Arab Emirates when he arrives in the country on Tuesday to inaugurate Israel’s embassy in Abu Dhabi and consulate in Dubai.

Israel’s newly installed foreign minister will be hosted by his Emirati counterpart, Abdullah bin Zayed Al Nahyan. The countries’ top two diplomats are expected to discuss a range of bilateral issues over the two-day visit, including economic cooperation, trade and security.

“The inauguration is a symbolic act,” foreign ministry spokesperson Lior Haiat told Al Jazeera. “The embassy and consulate have already been working for four and a half months.”

Israel normalised relations with the UAE and Bahrain last August under the government of former Israeli Prime Minister Benjamin Netanyahu, whose 12-year grip on power ended earlier this month.

Netanyahu billed the agreements, dubbed the Abraham Accords, as a personal achievement, and ran an unsuccessful re-election campaign in part on the idea that he was the candidate who could deliver better relations for Israel with its Arab neighbours while maintaining security at home.

Hay Eytan Cohen Yanarocak, a scholar with the Jerusalem Institute for Strategy and Security, told Al Jazeera the visit demonstrates the high priority the new Israeli government places on its Gulf partners, and it “turns the Emirati relationship into an institutional policy of the Israeli state, rather than a party policy”.

It also comes as Israel has expressed serious reservations about efforts by Washington and Tehran to revive the Iran nuclear deal, and in the wake of the Gaza war – which failed to derail the fledgling UAE-Israeli relationship, or the quiet steps being taken to deepen economic and security ties.

The national flags of the United States, Israel, the United Arab Emirates and Bahrain were projected on the walls of Jerusalem’s Old City last year when the Abraham Accords were signed [File: Ronen Zvulun/Reuters]

Doubling down

The bilateral relationship between Israel and the UAE faced an early test in May when Israel bombarded the Gaza Strip for 11 days, killing at least 256 Palestinians including 66 children, and Hamas fired thousands of rockets into Israel, killing 13.

While the UAE criticised Israel for the forced expulsion of Palestinians from the Sheikh Jarrah neighbourhood of occupied East Jerusalem and the storming of the Al-Aqsa Mosque compound, it kept a more muted position regarding Israel’s assault on Gaza.

Haiat said from Israel’s perspective the conflict proved the endurance of normalisation. “It had no effect on the relationship between Israel and the Abraham Accords countries,” he said.

Still, the furore expressed in demonstrations throughout the Arab world over Israel’s actions in Gaza is a reminder of how far the official Emirati position is from that of general public opinion.

Bader al-Saif, a nonresident fellow at the Malcolm H Kerr Carnegie Middle East Center, told Al Jazeera: “Jerusalem and Palestine are still unifying motifs for Arabs at a time in which there are no other motifs.

“If it were left to the people in every one of the countries that normalised ties none of this would happen,” he added. “There is still an illegal occupation.”

But the UAE has carved out a position for itself as an outlier in the region. And bringing its relationship with Israel out into the open after decades of discreet security cooperation bolsters its trailblazing credentials, say analysts.

“Cooperating economically and in the security realm is just easier if it’s out in the open, and the UAE is in a position to do this,” al-Saif said.

A woman paints the Palestinian national flag on the face of a child amidst the rubble of buildings destroyed by last month’s Israeli bombardment of the Gaza Strip, in Khan Yunis, in the southern Gaza Strip [File: Said Khatib/AFP]

New deals

Just days after a ceasefire was announced in Gaza, the two countries signed a tax treaty to facilitate investments in their respective economies and eliminate double taxation. Haiat described the treaty as “one of the most important agreements” reached to date.

Ofer Sachs, CEO of Herzog Strategic, an Israeli advisory firm with a presence in the UAE, said the treaty removed major barriers to cross-country investment and is viewed as a positive step by the business community.

Still, he said, much of the potential for deeper economic ties trumpeted at the signing of the Abraham Accords has yet to materialise. “We are trying to demonstrate success stories very quickly, and this is not the situation,” he told Al Jazeera. “With time, fruits will arrive.”

He emphasised that Emirati businessmen are moving cautiously, noting “They are not rushing into anything. They want to create a real bonding.”

The biggest potential deal so far is Abu Dhabi’s state-owned investment fund Mubadala’s announced intent to acquire a $1.1bn stake in Israel’s Tamar gas field in the Eastern Mediterranean.

But a key part of the Abraham Accords was the UAE’s desire to partner with Israeli firms and carry out joint projects, especially in areas where both Middle Eastern states have overlapping interests.

Israel Aerospace Industries signed a memorandum of understanding in March with UAE state-owned defence firm Edge to co-produce anti-drone systems.

With time, fruits will arrive.

Ofer Sachs, CEO of Herzog Strategic

The agreement comes as drone warfare emerges as a powerful factor on battlefields throughout the region.

Turkey, which has strained relations with both UAE and Israel, is championing itself as a niche exporter of military drones and has demonstrated their potential in conflicts from Libya and Syria to Nagorno-Karabakh.

Al-Saif said the UAE is watching the development of drone warfare carefully.

In September 2019, Iran-aligned Houthi rebels in Yemen claimed responsibility for an attack on Saudi Aramco’s oil facilities that temporarily disrupted oil production and exports.

Saudi Arabia, a close ally of the UAE, has since been the target of several drone attacks claimed by Houthi rebels.

“If what happened to the Saudis ever happened to the UAE, they could never sustain their tourism sector or events like the Dubai Expo,” al-Saif said.

Ongoing relationship

One of the prizes of normalisation for Abu Dhabi is its new ability to acquire F-35 fighter jets from the United States. Following the Abraham Accords, Israel removed its objections to the arms purchase.

While defence deals between the two countries can now be announced in public, it was an open secret that the UAE and Israel had an ongoing relationship based on the sector going back decades. But Sachs doesn’t see the needle moving significantly.

“Perhaps there will be opportunities for medium-sized and small companies who couldn’t enter the market before, but I don’t think the influence of the Abraham Accords on defence industries is so dramatic,” he said.

In September 2019, Iran-aligned Houthi rebels in Yemen claimed responsibility for an attack on Saudi Aramco’s oil facilities that temporarily disrupted oil production and exports [File: Amr Nabil/AP]

Iran

Security will still likely be on the top of Lapid’s agenda.

His visit to the UAE this week coincides with ongoing efforts by the administration of US President Joe Biden to revive the Joint Comprehensive Plan of Action (JCPOA), the 2015 Iran nuclear deal with world powers.

After Netanyahu’s courtship of former US President Donald Trump, Lapid said he is eager to repair strained ties between his country and the Democratic party in the US.

On Sunday he met with US Secretary of State Antony Blinken in Rome and promised any Israeli objections to a new Iran agreement would be made privately to Washington.

Both Israel and the UAE opposed the JCPOA at its signing and supported the Trump administration’s unilateral withdrawal from the pact in 2018. That alignment played a critical role in pushing the Abraham Accords forward.

While it might not be in public view, Yanarocak said Israel will look to work with its new Gulf partner to jointly lobby the US over concerns about Iran’s missile programme and support for regional proxies.

“Israel needs to consolidate the Abraham Accords camp to pressure and leverage the US government over the terms of a possible agreement with Iran,” he said.



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