The report in "The Wall Street Journal" over the weekend that Jared Kushner had raised $2 billion from the Saudi Arabia sovereign wealth fund for investment in Israeli tech companies through his private equity fund is a substantial step forward in relations between the two countries with major diplomatic significance. According to the report, this would be a direct investment of Saudi money in Israeli companies - a move which is far more than symbolic and demonstrates the desire of the Saudi royal family to be a player in the Israeli economy, while also removing more obstacles on the path to direct relations with Israel.
The biggest obstacle currently preventing Saudi Arabia from joining the Abraham Accords is King Salman, the father of Crown Prince Mohammed bin Salman (known as MBS). For some years, his health has been waning and yesterday he was again hospitalized in Riyadh for medical examinations. MBS has in practice been ruling the kingdom for some time and has been instituting far reaching social and economic reforms.
Israel and Saudi diplomatic sources say that the economic aspects of the investment in Kushner's fund are significant but the indirect diplomatic implications are even more important. A Saudi source told "Globes," "The whole world is investing in Israeli technology and there is no reason why Saudi Arabia, which is promoting Crown Prince Mohammed bin Salman's 2030 vision for economic and social progress for the advanced technology era, should not also be investing. Our areas of interest range from agricultural and water technology, solar energy and others to fintech, cybersecurity and more. The current activities are through international funds and the Affinity Partners fund of Jared Kushner is not the only way that we are investing."
Regarding diplomatic matters, the Saudi source added, "The fact that bin Salman approved direct investment and not indirect investment, as there has been until now, says that another barrier has been breached and direct and publicly open relations are coming nearer."
But the source adds, "A significant and public diplomatic move will be difficult for bin Salman to do without some diplomatic concession on the Palestinians. With the UAE you gave the cancellation of sovereignty (annexing) the West Bank. But bin Salman is a reformer and so nothing would surprise me."
The Israeli source agrees with these main ideas and stresses that the connection with the Saudis has existed for some years in many areas and these connections were maintained following the change of government in Israel last year. In practice, the source says, what might delay diplomatic progress is the continuing political crisis in Israel and the possibility that the government will fall. "In Riyadh they see the success of the economic-technological-trade relations with the UAE and they also want. Politically, there is no doubt that bi Salman will demand a concession," the Israeli source adds.
Growing closer because of the joint struggle against Iran
Israel's move towards Saudi Arabia and the other Gulf states has been boosted by Israel's campaign against the Iranian nuclear program, which also threatens the Gulf, as well as Iran's support for terrorist organizations throughout the Middle East including within Saudi Arabia and Bahrain. The nuclear agreement signed in 2015 and the campaign by then Prime Minister Benjamin Netanyahu against the agreement brought about direct contacts and attempts to coordinate positions. The election of US President Biden and attempts to revive the Iran nuclear agreement have aroused concerns in the Gulf, and this partly explains meeting between UAE and Saudi representatives with their Iranian counterparts.
An Israeli diplomatic source told "Globes" that the path of economic and trade agreements could expand in the near future to other Arab and Muslim countries. He added, "There are at least three countries that are in talks with Israel about trade agreements or arrangements or other agreements like diamonds (for example the agreement to open Israeli representation in the Qatar Diamond Exchange as revealed by "Globes") but also other areas." He cited Saudi Arabia in terms of aviation, airspace and other agreements.
Through its bridge with Israel, bin Salman also hopes to promote investments in cybersecurity and life sciences in the new city of Neom, which along the Red Sea coast is a joint project with Jordan and Egypt.
Published by Globes, Israel business news - en.globes.co.il - on May 9, 2022.
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