Sunday, June 4, 2023

Lapid puts business noses out of joint in UAE

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The Abraham Accords are perhaps former prime minister Benjamin Netanyahu’s greatest diplomatic achievement, and he received prominent and extensive acknowledgment for that by Minister of Foreign Affairs Yair Lapid in his speech at the inauguration of the Israeli embassy in Abu Dhabi.. Lapid and Prime Minister Naftali Bennett know that they have to prove themselves on the diplomatic front, and one of the ways to do so is to strengthen the ties with the Gulf states, as though to fulfil the message to Netanyahu: “Thank you for what you’ve done, we’ll take it from here.”

The diplomatic and strategic importance of these ties are especially great against the background of the possibility that the US will return to the nuclear agreement with Iran, which worries Israel and the Gulf states, besides their huge economic importance.

Partial diplomatic success

During Lapid’s visit, the Israeli embassy in Abu Dhabi and the consulate in Dubai were inaugurated, and he met several ministers, headed by UAE Minister of Foreign Affairs Abdullah bin Zayed, but it was on the business side of the visit that there were discordant notes that caused anger among some of the most senior businesspeople in the UAE. These people, who are behind large investments in Israel, are annoyed that Lapid did not meet them, despite attempts to arrange such a meeting.

One of the businesspeople told “Globes”, “The foreign minister preferred a meeting with Internet influencers who have tens of thousands of followers, instead of with businesspeople who have the capacity to invest billions in Israel” According to what they were told, because of a lack of time, the minister’s bureau gave priority to the meeting with the influencers over one with the businesspeople, and even that was cancelled in the end. The same source said that if the agreements between Israel and the UAE were meant to be about the economy and trade, that should have found expression during this visit as well.

Among the businesspeople concerned were some from the Al Naboodah and Al Tayer families, which are among the eight strongest families in the country. These two families were the first to initiate investments in Israel and acquisitions of companies, some of which deals are in the process of being completed.

Following the cancellation, a senior executive in the Al Naboodah Group sent a letter to the foreign minister’s bureau on behalf of all the businesspeople involved, the text of which has reached “Globes”. It states that the Al Naboodah family has been one of the biggest investors in Israel, particularly in the technology sector, for 25 years, and even more so since the Abraham Accords were signed. The writer of the letter attempts to persuade the foreign minister’s bureau to hold the meeting all the same, with representatives of the Al Naboodah and Al Tayer families and with giant companies RTA and DIWA.




A senior Israel source familiar with the diplomatic and economic contacts with the UAE and the Gulf states told “Globes” that a fundamental rule of such contacts was showing respect, and that in this case, according to the code of behavior of these wealthy families, they were offered an insult. “It’s not that they’ll cancel the planned investments, but they expect an appropriate attitude by the new government, and that it should understand the way to the hearts of the businesspeople here. If you want their wealth, you have to pay them respect and abide by customary rules of conduct.”

Lapid’s bureau said in response that he and his UAE counterpart had met businesspeople from the UAE who had been invited by the UAE government. No comment was forthcoming on the cancellation of the meeting with the senior businesspeople.

In recent weeks, Israel’s Ministry of Foreign Affairs has been expediting contacts for strengthening economic ties with the UAE with the idea that this will assist the program for exiting the coronavirus crisis, and out of understanding of the strategic and economic importance of the accords. The incident during Lapid’s visit indicates that there is room for improvement in the approach to the Gulf states.

Other than that affair, Lapid’s visit is considered a success, and the government in Abu Dhabi has done a great deal to portray it as such. The visit was widely covered, and an interview with Lapid by the Emirates News Agency (WAM) was also published on other media outlets.

Lapid told “Globes” during the trip that its main purpose was economic. “We’re in a tough period economically, with a need for solutions for deficits and budgets, and the answer is economic development – that’s what’s happening here. The ties with the Emirates and the diplomatic and trade agreements are a real win-win. The aim is to expand economic and business ties even with countries with which we do not at present have relations. We intend to expand these ties with Sudan as well, and with countries with which we have connections under the radar.”

Lapid and his UAE counterpart signed an umbrella trade and economic agreement fleshing out in more detail the principles in the Abraham Accord.

According to government ministries on both sides, since the accords were signed last fall, trade between Israel and the Emirates has reached NIS 2 billion, not including services and tourism, and those two items add hundreds of millions of shekels at least. More than 200,000 Israelis have visited the Emirates since the accords were signed.

The services segment has grown substantially. An indication of this can be found in Israel Export Institute data showing that cybersecurity services, fintech, and other services, are taking a larger and larger slice of Israel’s exports. A Foreign Ministry official said that, by the end of the decade, trade between Israel and the Emirates was expected to be measured in the tens of billions of dollars.

Published by Globes, Israel business news – en.globes.co.il – on July 1, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021




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