From tech to tourism, Israel-UAE trade potential is vast

Panorama of Atlantis the Palm Hotel  / Photo: Shutterstock, Shutterstock.com

A senior UAE government official and Israeli businesspeople discuss the immense possibilities opened up by normalization.

Economic and political cooperation between Israel and the UAE has been going on behind the scenes for a long time, but it’s now clear the volume of trade is going to look very different.

A senior UAE government official has told "Globes" how many Israeli tourists a year are expected, how they believe the Covid-19 vaccine will be Israeli-made, and offers some advice to anyone planning to do business in the Gulf. The interview took place via email and by request no name can be revealed, as he says officials still do not have permission to be interviewed openly but only with high-level approval.

"We have had economic relations with Israel for many years at the government level, coordinating and organizing procedures and frameworks for running businesses, and of course at the business level," he says. "Hundreds of Israeli businessmen are in contact with their colleagues here, with government procurers and in a wide variety of fields. Since the announcement, we’ve received a thousand more official requests for delegations, meetings, entry visas for businesspeople, industrialists, and more."

How is this change being expressed?

"As far as we know, there have already been hundreds of video meetings between new contacts, some through government agencies or trade organizations, and others directly. On the matter of tourism, for example, I admit we were surprised by the number of inquiries, both from Israeli companies who have already purchased travel packages, and from individuals calling [UAE country code] +971 directly to inquire at hotels. We expect hundreds of Israeli and possibly thousands of other foreign passport-holders to arrive at our hotels during the Tishrei holidays [this reference to the Jewish High Holy Days was used in the original text], and they are ready and excited to welcome them. Our media outlets and social media are quoting your television stories about this. I am sure that if not for the coronavirus, the numbers would be much higher."

Future collaboration is also expected in all things Covid-19-related. It turns out there are high hopes for the development of an Israeli vaccine. "Over the last six months, extensive cooperation has developed between Emirati and Israeli companies, only some of which has been reported, such as the agreement between GROUP24 and your defense industries [Rafael Advanced Defense Systems and Israel Aerospace Industries (TASE: IAI)] to develop robotic machinery and other equipment for treating the virus," the senior official said.

"This is just part of what is happening," he adds. "There is information exchange at the government level, and also contact with third-party countries in R&D. Private and government money from the UAE is invested in international and Israeli research on this topic. We are fairly sure Israel will be among the first to develop a vaccine, and we have no doubt that Israel feels a responsibility to this region and its friendships, and will continue to assist in this medical issue."

What are you interested in gaining from normalization?

"Your Prime Minister said in his speeches this week, as quoted by us, that the two countries are leaders in technology development and entrepreneurship. He is right. His Excellency Mohammed bin Zayed al Nahyan has been leading our country in these fields for years, and Israelis will find international and local companies in the UAE that are dealing in the most advanced subjects. The connection with Israel will connect us directly, and without intermediaries or circumventions, to the advanced R&D which you have. Desert farming and water utilization is one of the most important areas, as well as solar energy exploitation.

"In the digital world, we keep close tabs on the high-tech and Start-Up Nation. Within that area, there are already strong ties in matters of cybersecurity as well as digital financial fraud, and that will develop because there is an advanced global financial center here. Our cities are technologically networked and you have some of the most advanced technologies. And there’s more. The blue sky of the Middle East is the limit."

"We have never been enemies of Israel"

This week, the question arose as to whether, as part of the deal, the UAE will also receive advanced weapons from the US, including advanced fighter jets. The senior official says that as far as he knows, the issue of buying F35 aircraft from the US did not come up in the talks with Israel. According to him, if his country does procure the planes, it will help Israel's security and not the other way around.

"If there is anyone in Israel who has not yet understood, let me make it unequivocally clear. The UAE has never been an enemy of Israel, even when it supports the just demands of the Palestinians for a state, and today it can be said openly that the opposite is true. The UAE is a friend and partner to Israel, with common interests and a strong will to reduce the influence of hostile and warmongering elements, to bring peace and progress to the entire Middle East; this, without neglecting the handling of the Palestinian issue. I have no doubt that progress on this plane will bring half of the Arab world after us."

Israel has hopes you will serve as a bridge to other Arab countries.

"As far as we know, we are already a bridge. Politically, each country will decide for itself how to manage relations with Israel. Economically, there is no doubt that economic / business relations will be established through us with countries that do not yet have relations with you. First of all, with the Gulf states. I know Saudi Arabia is especially important to you, and I can tell you that during the last week, via our companies, quite a few connections have already been established between Israeli companies and other Gulf states. This is a great advantage for us as well, and fully compatible with the strategy of an international trade and business center."

And what about the Palestinian issue?

"The Palestinians play an important part, and our government desires greatly to have them benefit from normalization. I hope things will work out and enable government-level projects for the development of Palestine for its citizens."

The end of this answer is particularly interesting, as the senior official more than implies that the Palestinian Authority will benefit from UAE-funded economic projects, precisely as written in the economic section of the Deal of the Century.

In conclusion, what advice can you give to Israeli businesspeople?

"As in any business relationship, be as fair and transparent as possible. Our experience with Israeli businesspeople so far has been good. There is a good personal relationship, a similar Middle Eastern warmth. I came across some who are excellent Arabic speakers, who understand our customs well, and they succeed well. There are those who understand a little less. The UAE is a technologically advanced and sophisticated country, and Israelis are expected to bring their capabilities and knowledge. The government echelon will make every effort to help, and we are preparing Hebrew courses for our businesspeople who would like that. Contracts have already been signed with Israeli and international agencies."

The sectors expected to make major profits

Judging by the potential at least, normalization with the UAE is expected to boost the volume of Israeli exports, due to the removal of restrictions on trade with the UAE - even more so due to the bridge that has opened and expanded to the entire Gulf. The Gulf Cooperation Council (GCC) is the fourth largest importer in the world and quite a bit of this purchasing power is in areas where Israel has something to sell. Relevant Israeli government ministries have already contacted and received contact requests from their UAE counterparts, some of which came a few hours after the normalization announcement.

Israel Export and International Cooperation Institute chairman and CEO Adiv Baruch said, "The expectation is that the UAE will open an amazing, huge scale gateway for Israeli industries and will be one of the driving forces for emerging from the Covid-19-generated economic crisis. These are developed countries with huge infrastructure investments and impressive digital development. In the UAE alone, imports amount to $270 billion a year and in technologies that are relevant for Israeli companies. One very important area in development is the ‘Smart City’ - digital management of communities, digital services, transportation, etc. Other areas are digital health services, precision agriculture, and digital financial services. "Almost every such a sector is expected to accelerate dramatically and exponentially."

What changes should we expect?

"Normalizing relationships will create direct communication channels that will lead to real and deep cooperation. The ability to facilitate delegations and direct communication between businesspeople, much more than before, will lead to mutual cross-pollination. The first thing they did was to open direct communication channels - and that demonstrates and highlights the importance of interpersonal communication. In our region, in the Middle East, personal connections and personal contacts are especially important, and this new, direct connection will nurture them. People are already putting out feelers and making inquiries, and we are organizing to meet that need.

A seemingly small matter on the practical level is the stimulus [that normalization will provide], the moment it becomes possible, for direct transfer of funds between financial institutions, instead of indirectly through other countries.

"This enormous political achievement is meaningless if it doesn’t go hand-in-hand with economic achievements. Economic ties are the anchor. The State of Israel cannot exist without exports, and increasing exports to the UAE and entire Gulf region will be an important engine on the tracks leading us out of the current coronavirus crisis."

"It’s a great relief. So far I’ve had to go via Jordan"

Many local business owners are already working hard to create collaborations with Israel's new friend. One of them is Mas Wattad, a resident of Baqa al-Gharbiya, owner of the Masclinics Israel chain, and founder and president of the global Dawasat ompany, a nutrition and weight loss program adapted to Arab and Middle Eastern cuisine.

"As soon as I heard about the normalization agreement, I let out a huge sigh of relief and felt great joy. Relief both about the technical aspect of direct contacts, and also deep in my heart." This is no small matter. Wattad, an Israeli Arab businesswoman who owns businesses in the Palestinian Authority and the Gulf, embodies the possibilities offered by the agreement to Israel, the UAE, and Israeli Arabs and Palestinians.

Wattad is a clinical dietician who studied at the Hebrew University of Jerusalem, and decided to adapt her knowledge to suit Arab and Middle Eastern food. In short: "How to eat knafe pastry and still stay healthy".

17 years ago, she began organizing groups at her home, teaching women how to make Middle Eastern food healthier, by balancing meals, controlling portions, and more. She developed her own nutritional points system, adapted to Arab cuisine. Within a year a thousand Arab women were participating and that enormous demand led to expansion and establishment of Dawasat, a patented weight loss, weight maintenance, diet, food and nutrition points program tailored to the Arab world.

Wattad opened branches in other Arab cities in Israel, as well as the Palestinian Authority: Tulkarm, Nablus (Shekhem), Qalqilya, Salfit and more. At these Palestinian groups, she met Palestinian women and men who were already living and working in the UAE. She met with Tali Singer, a development economics expert and businesswoman who had worked for The Investment Corporation of Dubai, (the Dubai administration's sovereign wealth fund), and the two prepared a digitally-based plan for penetrating this market. They developed an application based on Israeli technology suitable for proper nutrition in Arab cuisine. A training and leadership model for program facilitators has also been developed, which is distributed within the company framework to groups throughout the Gulf. Business there is booming, the app has thousands of downloads, groups are opening rapidly, and Wattad herself is a sought-after guest on Arab TV shows.

How will the agreement improve your activity there?

Wattad: "So far, I’ve gone through Jordan, and so far, I haven’t hidden anything. Everyone knew I was an Israeli Palestinian businesswoman with an Israeli passport. Now, it will be huge relief, I’ll be able to travel directly, call directly, and the doors will open wide." Another change is the possibility of leaving the Hebrew text on ads in the UAE.

She also says, she doesn’t intend to settle on doing business alone. "Now, I can now take the whole family with me, and we’re already making plans, looking into hotels, tours and entertainment options we can do together. We will be on the first plane there, that's for sure."

Published by Globes, Israel business news - en.globes.co.il - on August 24, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Panorama of Atlantis the Palm Hotel  / Photo: Shutterstock, Shutterstock.com
Panorama of Atlantis the Palm Hotel / Photo: Shutterstock, Shutterstock.com
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