Diamond agreement brings Israel and Qatar closer

Doha skyline  credit: Shutterstock
Doha skyline credit: Shutterstock

Qatar plans a free trade zone for diamonds and gold, and needed Israeli consent to join the countries entitled to trade in diamonds.

After years of an official boycott on its part, and strong opposition to the Abraham Accords, Qatar has reached a commercial agreement with Israel on diamonds. Although the agreement relates to an apparently technical arrangement in an important business sector, it indicates the existence of direct ties between the two countries and contacts on matters on their agendas. According to one source familiar with these contacts, Qatar will have no problem in reaching further economic and commercial agreements with Israel, as long as that suits its interests, as happened in the case of the diamonds agreement. Qatar, he reminds us, will host the football World Cup next year, in has undertook to let any tourist who so wishes to come to the games. It has to prove to the world that it will fulfil its undertaking, and the diamonds agreement with Israel indicates a desire to appear open to the world.

"Globes" has learned that the governments of Israel and Qatar have reached a commercial agreement on diamonds that will enable Qatar to join the list of countries entitled to trade in diamonds. Qatar undertook to allow Israel diamond traders to enter the country without difficulty,, and even to set up representative offices if they so wish, even though there are no diplomatic relations between the two countries, and Qatar, the "bad girl" of the Gulf, opposed the Abraham Accords with the UAE and Bahrain. The agreement was signed by senior foreign ministry officials of the two countries.

Qatar intends to set up a free trade zone that will specialize in precious stones and gold, and later to form a diamond exchange, on the Dubai model. The move still requires final approval by the plenum of the countries that are members of the Kimberley Process Certification Scheme, and setting up an exchange will require approval by the Diamond Exchange Federation, but after the removal of Israeli opposition, the way is open for Qatar.

Dr. Ron Malak, director general of the Ministry of Economy and Industry, confirmed the details of the story to "Globes". He said that following close and continued dialogue between the ministry and the Israeli diamond merchants and with the Ministry of Foreign Affairs, Israel received a commitment that the interests of the Israeli diamond merchants would not be harmed and that they would not be discriminated against versus other diamond merchants in access to the trade center that Qatar intends to set up. Following this commitment, Israel did not object to Qatar joining the organization. According to Malka, the development is indicative of Israel's strengthening economic and commercial position. Asked whether the agreement with Qatar heralds further agreements, he answered that Israel was ready for and open to any initiative and approach from any country in the region, including Qatar.

At the Israeli Diamond Exchange, in response to enquiries form "Globes", sources said that they welcomed the achievement, and that this was a very important move that opened up new markets for Israeli diamond merchants and for the Israeli diamond industry, which continues to help advance the economy and to represent the country all around the world.

The direct economic significance of the agreement is not high, at least not for the next few years. According to senior people in the industry in Israel and in the Dubai Diamond Exchange, it will take the Qataris time to establish significant trading and to gain a foothold in a field dominated by two strong veteran players. Israel's close, direct ties with the Dubai Diamond Exchange provides the connections to traders from countries without diplomatic relations with Israel. All the same, the importance of the agreement lies in its being a first commercial agreement after the breaking off of ties between the two countries following Operation Cast Lead and the signing of the Abraham Accords, and in its being an opening to future economic-commercial agreements.

Not to be left out

From conversations with diplomatic and commercial sources who deal with trade with the Gulf states, it seems that the move represents a combination of needs and interests and desire on Qatar's part not to be left out in the new diplomatic balance in the Middle East after the Abraham Accords. In the past, Qatar was a pioneer of openness to the West. It was the first Gulf state to have US forces on its soil, and it opened the international English and Arabic language news network Al Jazeera. It was also a pioneer in relations with Israel. During the period of the Oslo agreements, the late Shimon Peres, then Israel's minister of foreign affairs, met several times with Qatari leaders, and in 1996 representative offices were opened in Tel Aviv and Doha.

Official ties were broken off in 2009 with Operation Cast Lead in the Gaza Strip. In recent years, in its attempts to return to a position of influence, Qatar has financed various projects in the Gaza Strip, and in 2017 the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, even said that relations between Qatar and Israel were good. In the past two years, Qatar has financed fuel for the power station in the Gaza Strip and has provided money for 10,000 needy families there every month. In the course of contacts over these matters, former Mossad chief Yossi Cohen visited Doha. But after the signing of the Abraham Accords with the UAE and Bahrain, Qatar announced that it would not join them until there was a solution to the dispute with the Palestinians.

The agreement now reported could be a sign of a certain thaw on the part of Doha, and of the possibility of economic and other agreements, even if not full normalization of relations. Informed sources say that Qatar has seen the economic and commercial success of the Abraham Accords and their great potential, and seeks an elegant way of joining the process, if only partially. Another point to think about is that one of the command posts of the Hamas leadership is in Qatar, generously hosted by the government.

For Israel, such a thawing of relations could yield many fruits, certainly on the economic and commercial plane, but perhaps also diplomatically, in distancing Qatar from the countries and organizations hostile to Israel and bringing it closer to the moderate Gulf Sunni alliance.

Published by Globes, Israel business news - en.globes.co.il - on November 25, 2021.

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

Doha skyline  credit: Shutterstock
Doha skyline credit: Shutterstock
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