The Weekly Circuit
👋 Good Wednesday morning in the Middle East!
Saudi Arabia’s crown prince, Mohammed bin Salman, has been named prime minister, the government announced on Tuesday. The 37-year-old crown prince has been the kingdom’s de facto ruler for years, handling many royal duties in place of his 86-year-old father, King Salman. He has led the government in an ambitious agenda designed to wean the economy off its dependency on oil. He has also been blamed for the October 2018 killing of dissident Saudi journalist Jamal Khashoggi, who was a columnist for the Washington Post. The prince, widely known as MBS, said in 2019 that he took “full responsibility” for the missteps that led to the killing, but denied ordering it.
The White House today will host a delegation from Israel to launch a new strategic dialogue on technology cooperation. The initiative was part of the “Jerusalem Declaration” that President Joe Biden and Israeli Prime Minister Yair Lapid agreed upon during the U.S. leader’s Mideast trip in August. The dialogue will focus on cooperation in fields ranging from artificial intelligence and quantum computing to pandemic preparedness and climate change, according to a statement from Lapid’s office. Leading the Israeli delegation will be Innovation, Science and Technology Minister Orit Farkash-Hacohen and National Security Advisor Eyal Hulata.
Israel’s growing integration with the wider Middle East and North Africa has been paved with business connections, from investment in technology startups to offshore gas reserves in the Mediterranean. One ambitious project is a proposed train line stretching from the Persian Gulf to Israel’s Mediterranean port of Haifa. As The Circuit reports, however, Middle East rail projects have a century-long history of stopping short of their target destinations.
Two years after the Abraham Accords were signed, Israel’s influence has grown throughout the region, according to the annual Arab Youth Survey, which probes the mindset of 18- to 24-year-olds across MENA. But despite rising to be the third most influential country among Arab youth, Israel is still regarded as an enemy by many respondents, despite normalization efforts in the United Arab Emirates, Bahrain, Morocco and Sudan.
Couture houses and buyers from around the world will be coming to the UAE next month for Arab Fashion Week. Details below in The Circuit’s culture section, where you’ll also learn about “Cinema Sabaya,” a film about Israeli and Arab amateur filmmakers, which won “Best Film” honors last week at Israel’s annual Ophir Awards.
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].
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Gulf-Israel train project chugs into political, financial obstacles
Knitting together the Middle East with a network of train tracks has been a dream of transportation planners for over a century. The vision persists today as part of ongoing efforts to link the six Gulf states through an east-west rail network that would span Saudi Arabia and connect with the Red Sea. However, tying the project to a northern route that leads through Jordan to Israel’s Mediterranean port of Haifa – a notion floated amid the exuberance of the Abraham Accords – is still a long way off, Saeb Rawashdeh reports for The Circuit.
On the shelf: Just as the megaproject was suspended more than 100 years ago, the politics and multibillion-dollar cost involved mean it will probably remain on the shelf for years to come. “The success of a railway link would be dependent on the willingness of Saudi Arabia to support such a project,” RAND Corp. researcher Daniel Egel told The Circuit. “I think that they would have to be incentivized to include Haifa as a primary terminus for the railway” – given the current absence of diplomatic relations with Israel.
Transporting pilgrims: The history of the never-completed Hejaz railroad, which was built by the Ottomans in 1908 so that Muslims from parts of Asia and Europe could make the hajj pilgrimage to the holy city of Mecca, is a saga that illustrates the idea’s appeal and serial failures. Designed at the beginning of the 20th century by German engineers, the railway ran some 820 miles (1,320 kilometers) of rocky desert trail from Damascus to Medina, Islam’s second holiest city, stopping 220 miles short of Mecca. It wasn’t until four years ago that Saudi Arabia built the high-speed Haramain rail line connecting the two sacred sites at a cost of about $16 billion. By then, the Hejaz was a tin-can artifact with no connection across the Saudi border.
Complete overhaul: A renewed Hejaz would require that the decrepit railbed be completely replaced with modern infrastructure and has been under Jordanian government review for 11 years. Across the border, Israel started pitching its “Tracks for Regional Peace” initiative in 2018 to connect Israel with its Arab neighbors. It sought to promote the plan two years later when the United Arab Emirates and Bahrain agreed to normalize relations through the U.S.-brokered Abraham Accords.
Land bridge: The idea was to use the new railway Israel built between Haifa and its eastern town of Beit She’an, extend it to the Jordanian border and connect to an overhauled Hejaz. From there it would cross into Saudi Arabia and end up in Dubai connecting the Mediterranean with the Persian Gulf. The regional railway network would transport cargo and tourists, providing a regional network that would include Jordan, the Palestinian Authority, Saudi Arabia, the UAE and the other member states of the Gulf Cooperation Council. Annual trade flow through the land bridge, it was estimated, could reach $250 billion by 2030.
Economic viability: If relations between Israel and Saudi Arabia change and rail links became acceptable, the project would still face significant challenges and have to prove its economic viability. “It comes up from time to time,” said Ben Moore, an Israeli Foreign Ministry spokesman. “If we sign for peace, it could be considered.”
Read the full story here.
Youth poll ranks Israel as third most influential country in the Arab world
Arab young people see Israel as an increasingly influential presence in the Middle East and North Africa, topped only by the United States and Saudi Arabia in its impact on the region, according to the 2022 annual Arab Youth Survey, released Sept. 21. Last year, Israel also trailed the United Arab Emirates, which fell to No. 4 in the current edition.
Work in progress: The perception of Israel, though, was broadly negative, with 88% of the respondents describing the Jewish state as an enemy. Iran was seen as an enemy by 62% of those surveyed. China, by contrast, was viewed as an ally by 78%; Turkey by 77%; Russia by 72% and the U.S. by 63%. The poll, commissioned by ASDA’A-BSW, a Dubai-based unit of the world’s largest advertising and public relations agency, WPP, was based on face-to-face interviews with 3,400 people ages 18 to 24. It was conducted in 17 countries and territories across the MENA region by IDS Research & Consultancy from May 13-June 16.
Continued friction: The survey, which has been published for 14 years, indicated that the normalization of Israel’s ties with the UAE, Bahrain, Morocco and Sudan through the 2020 Abraham Accords has some distance to go in softening the hostility with which it is perceived among Arab youth. Other Arab countries, including Saudi Arabia and Qatar, have said continued friction with the Palestinians has prevented them from joining the agreements and establishing official ties with Israel.
Greatest obstacles: The rising cost of living was cited by 35% of respondents as the greatest obstacle facing the region, with unemployment cited by 32%. Next was the Israeli-Palestinian conflict (28%), the COVID-19 pandemic (23%), the threat of terrorism (17%) and lack of opportunity for women (13%). The UAE was viewed as the most desirable country to live in by 57% of the respondents, followed by the U.S., Canada, France and Germany. At the same time, 73% said they favor U.S. disengagement from the region. Many more Arabs hold the U.S. and its NATO allies as responsible for the Russia-Ukraine conflict (31%) than blame Russia (18%) and Ukraine (15%).
Read the full story here.
Air Defense: Israel has agreed to sell an advanced air-defense system, the Rafael-made SPYDER mobile interceptor, to the United Arab Emirates, according to Reuters.
Desert Golf: Officials in Israel’s southern city of Eilat are planning to build a desert golf course, in an effort to bring big-spending tourists to the Red Sea resort town.
Missed Taxi: Israel’s Gett taxi app service canceled plans to trade on Wall Street through a SPAC merger because several of its investors are Russian funds subject to U.S. sanctions.
Climate Tech: About one in seven Israeli startups launched in the past year was connected to climate change and environmental issues.
Intelligence Hub: Business is booming for Intellexa, an Athens-based network of security companies founded by Israeli army intelligence veteran Tal Dilian, according to an investigation by Haaretz and Greece’s Inside Story.
AI Corridor: Saudi Aramco signed a $250 million deal with Beyond Limits, a Glendale, Calif., developer of artificial intelligence technology, to build a global “AI corridor” in Saudi Arabia.
Visa Waiver: Israel’s parliament gave preliminary approval to new rules for sharing personal data with other countries, a step required by the U.S. to allow Israelis to enter its borders without first obtaining a visa. Two more votes are required for final approval.
Fiber Stake: Mubadala Investment Co., the Abu Dhabi sovereign wealth fund, is considering buying a stake in fiber network operator GlobalConnect, in a deal Bloomberg says could be worth more than $7 billion.
Network Vulnerabilities: Leading U.S. cybersecurity firm CrowdStrike will acquire Israel’s Reposify to help customers identify their network vulnerabilities. Terms were not disclosed.
Video Hire: Saudi Arabia’s Elevatus, which makes video interviewing software for HR departments, raised $105 million in a funding round led by Global Ventures and Aramco’s Waed Ventures.
Breathe Free: Google will buy Israel’s BreezoMeter, which uses atmospheric data, sensors and artificial intelligence to monitor air quality. Calcalist estimated the price at more than $200 million.
New Talent: Oracle, the world’s second-largest software maker, opened an “innovation hub” in Abu Dhabi to help companies develop products through artificial intelligence and machine learning.
Secure Data: SentinelOne, an Israeli-founded cybersecurity company based in Mountain View, Calif., is launching S Ventures, a $100 million fund focused on security and data startups.
Arab-Israeli Startups: The Hasoub Garage opened in the Galilee town of Ar’ara, providing work space, counsel and funding for Arab startups in Israel.
Burn Relief: MediWound, an Israeli company that sells a treatment for treating burns and wounds, raised $30 million to conduct clinical trials required for regulatory approval.
On the Circuit
Greg Norman, the Australian golfer and CEO of LIV Golf, met with members of Congress to address criticism of the golf tour’s Saudi backing.
Kare Schultz, CEO of Israel’s Teva Pharmaceutical Industries, the world’s largest generic drug maker, said he will not renew his contract when it expires in November 2023.
Ahead on the Circuit
Sept. 28-29, Dubai: World Green Economy Summit. Dubai Electricity and Water Authority hosts environmental conference with the World Green Economy Organization. Dubai World Trade Centre.
Sept. 28-29, Dubai Metaverse Assembly. Gathering of business, government and academic leaders to explore opportunities presented by the metaverse. Museum of the Future.
Oct. 10-13, Dubai: GITEX Global. Investors, technology leaders, corporate CEOs and government officials get together for leading Gulf technology event. Dubai World Trade Centre.
Oct. 18-20, Eilat, Israel: AgIsrael Sea the Future. First annual conference on sustainable aquaculture and food from arid climates. Herods Boutique.
Oscar Pick: “Cinema Sabaya” won Best Film honors at Israel’s Ophir Awards ceremony on Sept. 18, making it the country’s selection for foreign film nominee at the 2023 Academy Awards. The movie is about Arab and Jewish women municipal workers who challenge each other’s beliefs in a video workshop.
New York Vibe: DJ Boogie Blind, the superstar American DJ, will be spinning the turntable at Dubai’s Electric Pawn Shop, “a hedonist, exotic, dystopian counter-culture” Asian-Mediterranean restaurant and bar, on Oct. 1.
On the Runway: Arab Fashion Week kicks off in October, featuring more than 35 designers in couture and ready-to-wear shows. The region’s premier fashion event takes place Oct. 10-15 at “d3” – the Dubai Design District.