The Weekly Circuit
👋 Good Monday morning in the Middle East!
As the midsummer sun scorches the region, hundreds of startups in Israel are developing products to address lack of water, food insecurity, desertification and other challenges presented by the environment. The so-called “DeserTech” industry, as The Circuit reports this week, has coalesced around the dusty, southern Israeli city of Beersheva, which is undergoing a renaissance driven by a number of factors, including growth of Ben-Gurion University of the Negev and a massive transfer of Israeli military facilities to the southern region. The city has become a regular stop for visitors from the Gulf, who share the punishing climate at home and are exploring partnerships with promising Israeli companies.
Much of the spadework that has enabled such visits was carried out quietly over recent decades by Koby Huberman, a former executive at one of the country’s biggest technology companies, who has dedicated himself to facilitating Arab-Israeli cooperation. In an interview with The Circuit’s Jonathan Ferziger, Huberman said he’s not disappointed with President Joe Biden’s four-day visit to the region, though others in the tech industry were hoping for more of a bang from the trip. Still, he counsels lots of patience for those expecting concrete results in the Saudi and Palestinian arenas.
Across the Middle East, tourism is rebounding from the pandemic and hotels are filling up again. Among the summer festivals kicking off this week and featured below in our “Circuit Culture” section is Tel Aviv Dance, which, along with featuring two dozen Israeli troupes, draws top choreographers from Italy, Austria and the U.S.
Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].
HOT & DRY
Sizzling Mideast offers laboratory for desert startups
Global warming, vanishing rivers and sun-pulverized soil afflict the Middle East and North Africa with cruel and growing strength. Before they further degrade the planet, though, these forces represent an opportunity for scientists and businesses in the region to develop responses that may slow the environmental damage or, at least, help humans to adapt.The prospect of mitigating climate change has spawned an emerging industry of startups in Israel that include companies such as WaterGen, which can produce enormous quantities of fresh water from the barest level of humidity in the air.
A report released last week found more than 300 Israeli businesses developing products and trying to raise money in fields ranging from crop protection, solar power and smart irrigation to creating energy-efficient construction materials and novel desert-grown foods. It notes that some 2 billion people live in deserts or extremely arid climates, and asserts that Israel is one of the few countries that has developed effective technologies for reversing the impact of desertification.
Many of the Israeli start-ups for partners in the Gulf, Israeli trade officials say. One of the drivers for the 2020 Abraham Accords, which Israel signed with the United Arab Emirates, Bahrain, Morocco and Sudan, was the understanding that the region’s punishing heat and environmental damage is a shared problem that could benefit from cooperative solutions.
The study was produced by the DeserTech Climate Technologies Community in collaboration with Start-Up Nation Central, a Tel Aviv-based organization that promotes emerging Israeli technology companies, and sponsored by the Merage Foundation Israel, the Israel Innovation Institute, the Ministry of Environmental Protection and Ben-Gurion University of the Negev, according to a press release. The project aims to position Israel and, particularly the Negev region, as “the site that will pioneer the connection between entrepreneurs, investors, industry, researchers, and policy makers to overcome the challenges of desertification,” DeserTech Director Sivan Cohen Shachari said.
Israeli tech veteran sees slow path to more regional ties
For decades, Koby Huberman has been tilling the soil, patiently developing contacts across the Arab-Israeli divide and telling whoever would listen that employing a regional approach to Middle East peacemaking would yield the most profitable results. That’s why the Israeli tech industry veteran is far from discouraged with the inconclusive results of President Joe Biden’s July visit to Israel, the West Bank and Saudi Arabia.
It took years of unsung work to help plant the seeds for quiet political ties and unpublicized Gulf-Israel business deals that burst into the sunlight with the 2020 signing of the Trump-brokered Abraham Accords. “We are transforming the relationship model where very few were quietly working behind the scenes building bridges in the Arab world,” Huberman said in an interview with The Circuit’s Jonathan Ferziger. “Investors are now beginning to understand the new business environment.”
Earlier in his bridge-building career, Huberman, was an executive at Nice Systems, the telecommunications and data security company that has become one of the five biggest Israeli businesses on Wall Street. In 2011, he launched the Israeli Peace Initiative with Yuval Rabin, son of slain prime minister Yitzhak Rabin, and an assortment of senior military and intelligence figures, who developed a proposal for resolving the conflict with the Palestinians. That led to a broader project called the Israel Regional Initiative that provided a discreet meeting ground for Israelis and Arabs to develop plans for cross-border cooperation in a more integrated Middle East.
Despite expectations in Israel that the Biden visit would lead to more overt actions by the Saudis toward normalization, Huberman said the limited steps, such as allowing Israeli airlines to overfly the kingdom and agreeing on rules governing two strategic islands in the Red Sea, were roughly what could be expected in a region that generally undertakes political changes very slowly. “This will yield a lot of progress for the wellbeing of the region and a lot of business upside,” he said.
Read the full story here.
Neom Gets Bigger: Cost estimates for Saudi Arabia’s mammoth Neom project have more than doubled to over $1 trillion, according to the Wall Street Journal, which discloses previously unreported plans for a 75-mile-long, mirrored skyscraper made up of two parallel structures that would house 5 million people.
Rising Exports: Israeli exports are projected to reach $165 billion in 2022, a 15% increase from last year. The U.S. was Israel’s largest trading partner with $10 billion in bilateral trade during the first half of 2022, followed by China with $9 billion, according to the Economy Ministry.
Power Investments: Dubai plans to invest nearly $11 billion in electricity and water projects over the next five years, focusing on renewables, clean energy and its transmission and distribution networks.
Cash Barriers: Israeli Finance Minister Avigdor Lieberman said he’s trying to find legal ways to let Russian immigrants transfer money from their bank accounts in Russia, a process complicated by sanctions enacted after Russia’s invasion of Ukraine.
Hospital Trips: Arab patients comprise some 30% of the world’s medical tourism market, an industry that is expected to reach $200 billion in the next 10 years.
Need Skills: Qatar and Kuwait face the greatest shortages in the Gulf of skilled workers, and companies are increasing salaries there to retain experienced employees.
Gas Demand: Fuel shortages in Europe are creating rising demand for natural gas, already boosting sales for Egypt’s two liquefaction plants after the European Union signed a gas import agreement last month with Egyptian and Israeli leaders.|
New Saudi Airline: Saudi Arabia will soon launch a second national airline – so far unnamed — alongside Saudia as part of a plan to boost tourism and become an international flight hub.
Male Patch: Israeli startup Virility has raised $10 million from Migdal Insurance and Arkin Investments to develop a skin patch that helps men control premature ejaculation.
Drone Grocer: Walmart will roll out its drone grocery delivery service in the U.S. with an operating system made by Israel’s FlightOps to manage a fleet of more than 150 unmanned aerial vehicles.
Dutch Retailer: SPAR International, the Netherlands-based supermarket chain, signed a letter of intent with retail executive Amit Zeev to open a network of stores in Israel.
Saudi VC: Saudi Arabia’s venture capital funding tripled to $584 million in the first half of 2022, compared to the same period last year.
Tahini Shortage: Israeli scientists and farmers are developing techniques to increase sesame seed yields to make tahini paste as global supplies dwindle because of civil war in Ethiopia.
Tourism Rebound: Dubai hotels posted a 75% occupancy rate in the first five months of 2022, up from 58% in the same period last year when the pandemic deflated travel.
On the Circuit
Miami Mayor Francis Suarez visited Israel last week, meeting with venture capital firms and startups in Tel Aviv, where he talked about his efforts to turn the Florida city into a regional tech hub.
UAE Climate Change and Environment Mariam Al Mheiri called for more “realism” in global efforts to adopt clean sources of energy, telling The National, “The world is knocking on our door and asking us to produce more oil and gas, because they are not ready with the new energy systems.”
Indian billionaire Gautam Adani, who bought Israel’s Haifa Port this month was ranked as the world’s fourth-richest person with an estimated fortune of $112.5 billion, vaulting past Microsoft founder Bill Gates.
Ahead on the Circuit
July 26, Dimona Conference on Real Estate: Israeli Regional Development Minister Oded Forer, Transportation Minister Merav Michaeli among speakers at a property industry forum in the southern Israeli city of Dimona. Hashachar Community Center.
July 26, Israel Elections Forum: Israeli President Isaac Herzog, leaders of Israeli political parties discuss national elections scheduled for November. Hosted by Channel 13 News. Jerusalem International Convention Center.
July 27-28, Dubai: Global Vertical Farming Show. Businesses in agriculture, construction, water technology and other industries from around the world meet for a two-day conference. Hotel Conrad, Dubai.
Summer Dance Festival Gets Tel Aviv Swinging
The annual Tel Aviv Dance festival opens for a two-week run at the Suzanne Dellal Center with a performance by Israel’s Castle in Time Orchestra. Among the international headliners are Austria’s Bodhi Project, Italy’s Silvia Gribaudi and New York-based Netta Yerushalmy. Israeli troupes include Lior Tavori, Nur Garabli and Rotem Tashach. The festival will also feature free outdoor events from Aug. 8-12 in a program called Cypher Connection 2022 that will spotlight hip-hop, freestyle, breaking, popping and other contemporary forms of dance.