The Weekly Circuit
👋 Good Monday morning in the Middle East!
It’s been two years since former President Donald Trump gathered aides around his desk in the Oval Office and delivered the stunning news that the United Arab Emirates had agreed to normalize relations with Israel. The Abraham Accords, signed a month later at the White House by Israel, the UAE and Bahrain, radically altered views of what could be possible in the strife-filled Middle East. Soon after, Morocco and Sudan had signed their own normalization pacts. With hundreds of thousands of Israelis now having visited the UAE and a free-trade agreement concluded in May, financial projections point to $10 billion in trade between the former adversaries over the next five years. Investors from Gulf sovereign wealth funds have grown familiar with Tel Aviv’s tree-shaded Rothschild Boulevard, the heart of Israel’s finance sector, where they scrutinize startups with some of Israel’s top venture capital firms.
What hasn’t materialized, though, are the expectations that more Arab and Islamic nations would join the Accords and take the region on a quieter and more productive path that might include progress in resolving the Israeli-Palestinian conflict. That was part of President Joe Biden’s objective in visiting both Israel and Saudi Arabia last month, flying directly between Tel Aviv and Jeddah to underline his desire to deliver a peace dividend. In the meantime, The Circuit reports this week, investors are finding novel ventures for bringing Israelis and Saudis together, while Indonesia says it won’t interfere with private initiatives aimed at facilitating business between the two countries, though a diplomatic breakthrough appears far off. Israel is also hopeful that warming relations with Chad, alongside its new alliance with Morocco, will lead to further diplomatic progress in Africa.
In contrast to declines on Wall Street that have dented the value of some of Israel’s highest-flying startups, investors in the Gulf are reaping the rewards of high oil prices. A report by London-based Preqin showed that the eight biggest sovereign wealth funds in the Middle East, led by ADIA, the Abu Dhabi Investment Authority, have amassed more than $3 trillion in assets. According to the report, the funds are using a fair share of the gains to invest in solar, wind, hydrogen and other alternative energy sources, preparing for the inevitable future when they can’t depend on fossil fuels.
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On Saudi road to Israel, orange and date groves point the way
Why wait for diplomatic relations when there’s plenty of room to do business in the gray areas that prevail between Saudi Arabia and Israel? That’s the approach taken by Bruce Gurfein, a Jewish-American entrepreneur who has lived in the Gulf for 25 years. Operating from Dubai, in the United Arab Emirates, the 45-year-old New Yorker brokered indirect Arab-Israeli deals well before the 2020 Abraham Accords normalized Israel’s ties with the UAE and Bahrain.
No speeding: To demonstrate that the Saudis are open to informal connections with Israel, Gurfein drove his Nissan Armada SUV last week on a 2,800-mile (4,500-km.) desert odyssey across the Arabian Peninsula. Starting in the UAE, Gurfein traveled through Saudi Arabia, Jordan and the West Bank before reaching Jerusalem. Throughout the journey, he took to Twitter to describe his trek to Israel through Saudi territory. He didn’t so much as get pulled over by Saudi police for a speeding ticket on the entire trip.
Slow process: Official ties “will take time,” Gurfein told The Circuit’s Jonathan Ferziger, speaking last Thursday over WhatsApp from a Starbucks in the northwestern Saudi city of Tabuk. “It’s not going to happen overnight just because some president wants them to sign a peace agreement.” President Joe Biden flew to Israel and Saudi Arabia in July on a diplomatic trip partly devoted to encouraging ties between the two countries. Biden cited an agreement enabling Israeli airlines to overfly the vast desert kingdom, saving time and costs to destinations in Asia, as progress toward that goal. Saudi Foreign Minister Prince Faisal bin Farhan later described the flight decision as a gesture unconnected to normalization and said closer ties require agreement on a two-state solution for the Israeli-Palestinian conflict.
Oranges and dates: Gurfein is chief executive of Connect LLC, a technology investment firm owned by Abdullah Al Naboodah, one of the UAE’s wealthiest men. He is trying to set up a business accelerator in Saudi Arabia that will draw companies developing new methods for desert agriculture and ensuring food security. Those companies may come from a variety of countries, including Israel, he said. On the cross-country ride last week, Gurfein stopped at three Saudi farms that may be involved in the project, touring their orange and date groves in the dusty, desert soil.
In Indonesia, Israelis talk technology as prospects dim for diplomatic relations
On a rooftop in Jakarta in mid-July, a group of Israelis and Indonesians tried to break through the political divide between their countries and talked about doing business deals together. Many knew each other from chatting over Zoom for the previous three months. They were enrolled with the Jerusalem-based Israel-Asia Center in a project that encourages Israelis and Indonesians to engage even though their countries don’t have diplomatic ties.
Respecting sovereignty: It’s an improvisational approach that enables Israel to develop relationships in a region filled with political obstacles, according to Emanuel Shahaf, one of the Israeli leaders of the Jakarta visit and vice chairman of the Israel-Indonesia Chamber of Commerce, which doesn’t have an official Indonesian partner. “Nobody said you must have diplomatic relations to have a binational chamber of commerce,” Shahaf toldTheCircuit’s Larry Luxner. “We’re not impinging on Indonesian sovereignty in any way.
Normalization talk: Indonesia, the world’s largest predominantly Muslim nation, has been mentioned as a country that may normalize relations with Israel, following in the steps of the United Arab Emirates, Bahrain, Morocco and Sudan, which signed the U.S.-brokered Abraham Accords in 2020. Despite annual trade between the two countries exceeding $500 million, some of it reportedly in weapons, Jakarta has stopped short of establishing formal diplomatic ties.
Nondisclosure pact: On that sweltering summer evening in sub-equatorial Jakarta, Indonesia’s capital city, the half-dozen Israelis — who were required to have non-Israeli second passports to enter the country — mixed with Indonesian business leaders, university presidents and entrepreneurs at the rooftop reception, according to those in attendance. Given the diplomatic sensitivities, the Israel-Asia Center assured Indonesian participants that names wouldn’t be published without their express permission. It also required all participants, speakers and partners in the program to sign a nondisclosure agreement “in order to create a confidential safe space where all those engaged in the program can do so openly and freely,” the center’s website says.
BUILDING A RELATIONSHIP
After a 50-year hiatus, Israel-Chad ties are warming – fast
When Israel’s non-resident ambassador to the Republic of Chad, Ben Bourgel, presented his credentials to President Mahamat Idriss Déby in May, the biggest surprise was that it all felt very normal. “When I went to present my letter of credence, the presidency did exactly the same for me as it would do for any ambassador presenting his credentials,” Bourgal, who is Israel’s resident ambassador to Senegal and, as well as Chad, non-resident to the Gambia, Cape Verde, Guinea and Guinea Bissau, told Jewish Insider’s Ruth Marks Eglash in an interview. The meeting, Bourgel explained, marked “a new era” for Israel and the landlocked central African nation, after 50 years of no formal diplomatic relations. In 1972, facing pressure from Libyan leader Muammar Gaddafi, Chad severed ties with Israel.
Key to stability: Bordering Libya as well as Sudan, the Central African Republic, Cameroon, Nigeria and Niger, and with a population of some 16 million, Bourgel said that Chad was a “very important partner” for Israel. “It’s a key to stability and security in the region and that’s the way it is perceived by all international partners based there. Europe, the U.S. — they all see Chad as a constructive partner,” said Bourgel, who previously served as the political coordinator of Israel’s Permanent Mission to the United Nations in New York.
Africa policy: For Israel, warming ties with one of the African continent’s largest countries is part of a two-fold strategy, explained Bourgel. “First, we are widening the circle of peace,” said the envoy, explaining that the creation of such relations had an impact on other nearby countries. “The second is Israel’s efforts to go back to Africa, which was initiated a few years ago.” Yonatan Freeman, an international relations expert at the Hebrew University of Jerusalem, told JI that the renewed diplomatic relationship with Chad was the first tangible result of this African policy. In addition, he said, the diplomatic process with Chad, a Muslim-majority country, had opened doors to the Arab world, maybe even paving the way for the 2020 Abraham Accords that Israel signed with the United Arab Emirates and Bahrain, and to normalizing ties with Sudan and Morocco in the same year.
Read the full story here.
Unlimited Caviar: Emirates is investing $2 billion to upgrade its aircraft fleet and service, including pampering first-class passengers with all the Persian caviar they can eat. A new vegan menu features pan-roasted king oyster mushrooms, jackfruit biryani and sliced kohlrabi with burnt orange.
Tech Training: Israel launched a $6.2 million program to increase the number of its Arab citizens in technology companies, which need to address a shortage of skilled workers.
Health Incubator: Peregrine Ventures, an Israeli investment firm focused on healthcare, will invest some $90 million in an incubator for startups through a consortium with Bristol-Myers Squibb and several Israeli businesses and institutions including Elbit Systems, Ben-Gurion University and Shaare Zedek Medical Center.
Flight Deal: BCD Travel, the world’s fourth-largest travel agency, will use Israeli startup FairFly’s ticketing technology in a deal estimated to be worth as much as $15 million a year.
Cutting Back: Israel’s Wix website-building company will make cutbacks aimed at saving $150 million per year, laying off employees and trimming costs amid slowing growth.
Drone Drop: Ondas Holdings will take control of Israel’s Airobotics, a maker of drone aircraft systems, for about $15 million. Three years ago, the company was valued at $240 million.
Egypt Stake: The new Saudi Egyptian Investment Co. acquired minority stakes worth about $1.3 billion in four companies including finance, cargo and fertilizer businesses.
Smart Shopping: Israel’s Shopic, which makes smart shopping carts where customers scan their groceries, raised $35 million in a funding round led by Qualcomm Ventures.
Up the Creek: Emaar Properties, the UAE’s biggest real estate developer, agreed to acquire Dubai Creek Harbour from Dubai Holding for about $2 billion in cash and shares.
Majority Interest: Abu Dhabi’s Chimera investment company bought a 56% stake in Egypt financial service company Beltone.
On the Circuit
Giannis Antetokounmpo, the superstar Greek-Nigerian basketball player for the NBA’s Milwaukee Bucks, agreed to serve as a brand ambassador for Israeli telemedicine startup Antidote Health.
Liron Zaslansky, Israel’s new consul general in Dubai, began her posting last week after serving as the Foreign Ministry’s director for Jordan, Syria and Lebanon.
Inbar Yacoby was appointed to lead software giant SAP’s startup accelerator in Tel Aviv, SAP.io Foundry, which identifies and helps develop potential business partners for the German company.
Ahead on the Circuit
Sept. 28-29, UAE: World Green Economy Summit. Dubai Electricity and Water Authority hosts environmental conference with the World Green Economy Organization. Dubai World Trade Centre.
Oct. 23-27, Israel: ECCV 2022. European Conference on Computer Vision holds the biennial event in Israel, gathering companies involved in computer vision and machine learning. Expo Tel Aviv.
Authorized Influencers: Saudi Arabia has instituted a licensing system for the influencer industry, setting fees for making money from one’s social media profile. Aspiring influencers must pay a fee of approximately $4,000 to the government’s General Commission for Audiovisual Media, which grants three-year permits to promote products and services through social media, provided it doesn’t violate Saudi laws or values.
Warhol in Tehran: Artworks by Andy Warhol, Marcel Duchamp and Sol Lewitt are on display at the Tehran Museum of Contemporary Art after dwelling in a basement storage facility since the 1979 Iranian Revolution. The works by Western artists from the 19th and 20th centuries that were collected by Shah Reza Pahlavi and his wife Farah have been stashed away for more than four decades by order of Islamic government authorities. With the recent easing of some cultural restrictions, curators obtained permission to bring many of the works upstairs, according to the Associated Press. The new show, which has doubled traffic to the museum, features 34 artists and runs through mid-September.
Grappling with Morocco: Morocco’s national wrestling team will compete in an Israeli tournament this month commemorating the 50th anniversary of the killing of 12 Israeli athletes at the 1972 Munich Olympics. The decision to join the event, which will also include wrestlers from the U.S., Germany, Switzerland, Greece and Tajikistan, is seen as a fruit of the 2020 Abraham Accords normalizing Morocco’s ties with Israel. The tournament takes place Sept. 25-26 in the southern city of Beersheva.