How UAE-Israel historic peace deal will affect business in the Middle East

A historic deal has been signed between UAE and Israel. Business between these two countries is finally open. Markets such as investment, tourism, finance, technology, transportation and more are now taking full advantage of the historic Abraham Accords and are ready for business.

The new era of trade between UAE and Israel is forecasted to reach $4 billion in three years. With the help of the UAE-Israel Business Council and the removal of trading restrictions manifested by the Abraham Accords, business connections will be formed, joint ventures will be created and economic cooperation will be fostered. According to the council, there has been an increasing demand already from Israeli companies to trade with UAE companies.

A $3bn fund, the Abraham fund, was established jointly by UAE, US and Israel in order to stimulate private sector-led investments across the two nations by enabling infrastructure projects, bolstering regional trade and increasing energy security.

Investment on Real Estate and Property

It is well known that Dubai is recognized as the best destination for real estate investment. Therefore with the help of this deal, many Israeli investors will focus on profiting from investing in real estate in Dubai due to its globally competitive pricing and high yield rates. Adding to this, bilateral agreements were made that provide protection and incentives to investors who are planning to make an investment in each other’s countries. Even though, the global pandemic has caused an unprecedented recession, many buyers and are looking to secure a deal as prices are continually decreasing.

Banking & finance

The peace deal has benefited the industry of banking and finance. With the signal of Memorandum of Understanding (MoU) on banking and finance, many opportunities for agreements between the two countries will unfold. However, some opportunities have already opened up, for example the first Israeli trade delegation had arrived in the UAE, where the biggest bank in Israel signed a MoU with the biggest bank in Dubai, Emirates NBD. Another example was when the Abu Dhabi Investment Office announced that Tel Aviv would be the location for its first ever foreign office.

Diamond industry

Dubai Multi Commodities Center (DMCC) has established a representative office in Tel Aviv in order to support Israeli businesses that are interested in setting up their companies in Dubai and DMCC. DMCC has stablished over 18,000 companies of all kinds and sectors, its extension of services, packages and prices will attract even more future entrepreneurs.
A massive interest from Israel in doing business in Dubai has been noticed, especially in diamonds. A collaboration was agreed between Dubai Diamond Exchange (DDE) and Israeli Diamond Exchange (IDE). Even though the diamond industry has been hit by the global pandemic, the agreements between Dubai and Israel are expected to rebound this industry, as both countries are leaders in the global diamond industry. Adding to this, the exchange of diamonds and the establishment of reciprocal offices in each country was agreed.

Coronavirus research and development

Many pharmaceutical and drug companies around the world are racing to develop the vaccine for Covid-19, including UAE, which announced that testing of the vaccine is undertaking in the Gulf country. UAE and Israel, have announced their collaboration in regards to research and technology development for the vaccine. It is important to note that both nations were classified as the safest countries in the Middle East in terms to safety and stability during the global pandemic.

Tourism

Israel and UAE, are both very popular tourism destinations. Direct tourism between the two countries will be facilitated which will undoubtedly benefit the economy of both nations. That being the case flights will be facilitated in order to open direct routes to ensure an easy and fast way to travel. With the signal of bilateral visa free travel agreements a boost in the tourism market is expected as it is foreseen that about 100,000 tourists will be attracted in Israel from the UAE.

Transportation

As mentioned previously, collaboration in regards to technology could stream innovation as the two countries can benefit each other. One of the many fields that are benefited, is transportation, for example self-driving taxis are expected to be on the streets by 2022. Adding to this, another major innovation in terms to transportation is the opening of a direct shipping line between Israel and UAE. Lastly, one of the most important announcements in regards to transportation, is the launch of direct flights between Dubai and Israel from three Israeli airlines, the agreement allows 28 weekly commercial flights between the two countries.

Conclusion

It is expected that more positive changes will spread, not only across the Middle East but internationally as well. Moreover, another area which has been widely discussed lately is hospitality, Dubai conglomerate Al Habtoor Group, is planning to establish its offices in Israel as well. Taking everything into account, some interesting areas of which are expected to be affected by the deal include, an increase in employment rate, direct export of technologies such as agricultural, solar and other renewable energies.