The Weekly Circuit
đź‘‹ Good Monday morning in the Middle East!
Flush after almost a year of high oil and gas revenues, Saudi Arabia, Qatar and their Gulf neighbors have money burning holes in their pockets and inflating their sovereign wealth funds. Not to worry. A variety of megaprojects – from a proposed mile-high skyscraper in Riyadh to the grand reconfiguration of downtown Doha – are ready to swallow up the cash.
While other regions have been hit by rising food and energy prices spurred by Russia’s invasion of Ukraine, Saudi Arabia and its oil-rich neighbors are benefiting from the influx of revenue, the Wall Street Journal reports. Saudi Arabia has posted a $27 billion budget surplus. Qatar spent $200 billion on a new subway system, eight stadiums and other construction projects to prepare for the World Cup soccer tournament.
Joffre Capital, a tech buyout firm with offices in the U.S. and China, didn’t like the hand it was dealt and walked away from the purchase of a $1.5 billion majority stake in Playtika. The week ended with the Israeli mobile casino game maker’s share price 9% lower and 600 employees looking for new jobs. Israel startups have fired thousands of employees as venture capital funding dries up from around the world. Joffre has demanded that Playtika return an advance of $50 million.
Also this week, The Circuit examines the burgeoning fashion industry in Saudi Arabia and the UAE, reports on a new CEO at Mubadala’s investments platform in Abu Dhabi, finds out what emerged from the Atlantic Council’s N7 Conference in Morocco and catches up with a delegation of U.N. ambassadors who traveled together to the UAE and Israel.
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 STYLE
Arab fashion industry struts into Saudi Arabia
In shimmering gold headscarves, embroidered capes and floor-length leather coats, models from more than 25 fashion labels will take to the catwalk this week at the Saudi capital’s swank Al-Faisaliah Hotel, Rebecca Ann Proctor reports for The Circuit. The event, which opens Thursday, is the first time that the Modest Fashion Show, a growing biannual display of couture designed for Muslim women, will be staged in Riyadh, where black robes, veils and hijab head coverings are more familiar apparel. The three-day lineup of designers, held previously in cities such as Dubai, Jakarta and London, is aimed at a growing Islamic market around the world that is estimated to be worth more than $300 billion.
Modest couture: “For us, modest fashion is not a trend,” Ozlem Sahin Ertas, CEO of the Istanbul, Turkey-based Modest Fashion Weeks organization, told The Circuit. “It was always big but it had no global platform for us to come together and speak out through our fashion. We believe in democratizing fashion, making it more inclusive and diverse.” Apparel and footwear purchases by Muslim consumers grew by 5.7 percent last year to $295 billion, with Iran, Turkey and Pakistan ranked as the top spenders, according to the State of the Global Islamic Economy Report 2022. The market is forecast to grow to $375 billion by 2025. With close to 2 billion adherents, Islam is the world’s fastest-growing religion.
Easing up: Fashion shows have been held in private for years in Saudi Arabia, but the events now coming to Riyadh and other cities have been made possible by the conservative Islamic kingdom’s easing of rules governing women since 2016 that included lifting the requirement for head coverings and a ban on driving. Dolce & Gabbana staged its first fashion show in the historic desert region of AlUla earlier this year and other prominent brands are also holding events as Saudi Arabia vies to become a hub for both Arab and international fashion.
Iran protests: Though it has gradually become the personal choice of women across the Gulf Arab states whether to wear traditional Islamic dress, neighboring Iran still enforces the covering of women’s hair, a practice that has sparked widespread protest and led to violent clashes with government forces. The demonstrations in which thousands of women have marched with their heads uncovered started in September after the arrest by the country’s morality police of 22-year-old Mahsa Amini for allegedly wearing her headscarf too loosely. She died three days later in police custody. The women’s movement was further galvanized by Iranian rock climber Elnaz Rekabi, who came under public criticism for taking off her hijab in October at the International Federation of Sport Climbing’s Asian Championships in Seoul.
Arab brands: The better-known side of the international fashion world that often flouts the region’s adherence to modesty was on display at Arab Fashion Week (AFW) in Dubai, which emerged more than 10 years ago as a Middle East hub for designer and luxury products. Major brands such as Chanel, Dior, Gucci and Louis Vuitton anchor the glittery Mall of the Emirates and the city’s other commercial palaces. The UAE and surrounding Gulf states are also beginning to embrace lesser-known brands closer to home, emblemized by the wide range of designers from across the MENA region at AFW, staged at the Dubai Design District, known as d3. “One of the obstacles we used to face was that regional consumers only wanted to buy brands imported from the West and there was little attention placed on regional emerging brands,” Arab Fashion Council CEO Jacob Abrian told The Circuit. “This has changed immensely over the last five years. In 2022 consumers in the Middle East are more supportive of regional designers.”
CHANGING PLACES
Waleed Al Mokarrab to head Mubadala Fund’s UAE Investments platformÂ
Mubadala, the Abu Dhabi-based sovereign wealth fund that manages more than $280 billion in assets, placed one of its most senior executives, Waleed Al Mokarrab, in charge of the unit that handles interests in the UAE, including projects with Israel, The Circuit’s Jonathan Ferziger reports. Al Mokarrab, who this week was named interim CEO of Mubadala’s UAE Investments platform, will take over for Musabbeh Al Kaabi, who next month will move to the Abu Dhabi National Oil Company (ADNOC) to head its newly established Low Carbon Solutions & International Growth division, the company said in a statement.
Israeli projects: As Mubadala’s deputy group CEO, Al Mokarrab also served as deputy CEO of the investments platform during a period in which UAE and Israel normalized diplomatic relations under the September 2020 Abraham Accords. He supervised the Mubadala team that led some of the Gulf state’s most prominent Israeli investments, among them the 22% stake Mubadala Petroleum bought last year in Israel’s Tamar natural gas field, off its Mediterranean coast. The pumping operation at Tamar is run by Chevron Oil Co., the second-largest U.S. energy company, which owns a 25% stake in the field.
Startup funds: Mubadala distributed $20 million last year to six Israeli venture capital funds – Mangrove Capital Partners, Entrée Capital, Aleph Capital, Viola Ventures, Pitango and MizMaa – to invest in promising startups, according to the Wall Street Journal. All told, Mubadala’s investments in Israeli tech companies have amounted to $100 million, the Wall Street Journal reported in January.
Harvard grad: Al Mokarrab holds a master’s degree in public policy from Harvard University and a bachelor’s degree in foreign service from Georgetown University. He is a board member at the Cleveland Clinic, one of the top-rated U.S. hospitals, and chairman of its branch in Abu Dhabi. Trade between Israel and the UAE reached $1.4 billion during the first three quarters of 2022, already beating the $1.2 billion posted in the previous year. After signing a free-trade agreement in May, both countries predicted that the volume would reach $10 billion within five years.
DOUBLING DOWN
Morocco N7 Conference debates agenda for summit of nations normalized with Israel
Three days of brainstorming by politicians, diplomats and policy experts meeting last week in Rabat, Morocco, yielded a series of recommendations for how Israel and its Arab partners can help each other through stronger educational and cultural ties. About a dozen proposals will be presented to the foreign ministers from the seven countries in a gathering planned for early next year known as the Negev Summit.
Ordinary people: The N7 Conference in Morocco, organized by the Washington-based Atlantic Council and the Jeffrey M. Talpins Foundation, brought together participants from Israel, Egypt, Jordan, Morocco, Bahrain, Sudan and the United Arab Emirates. The recommendations range from student exchanges among the different countries and online discussion forums to sports competitions and music concerts. Central to the discussions was the desire to impress on ordinary people that normalizing ties with Israel under the 2020 Abraham Accords, carries real benefits, said William Wechsler, director of the Atlantic Council’s Middle East programs and Rafik Hariri Center.
Real benefits: “If you’re an average Moroccan, an average Bahraini, even an average Emirati, you don’t feel your life has been changed,” Wechsler told The Circuit. “You don’t think that you have more opportunities, you don’t think that this has actually benefited you. And that’s a real problem. In order for this to be everything we want it to be, they have to feel that this has helped them to some degree.”
Netanyahu’s return: While the first Negev Summit was hosted last March by Israeli Prime Minister Yair Lapid, who was foreign minister at the time, Wechsler said he believes the gathering will flourish with Benjamin Netanyahu’s expected return to power in coming weeks. Netanyahu negotiated the U.S.-brokered accords with the UAE and Bahrain before he was voted out of office in 2021 and signed the agreements alongside former President Donald Trump on the White House lawn. “I think he’s going to try his best to extend that legacy,” Wechsler said. “I would expect his government is going to be doubling down on the issues of normalization in the region.”
TRIP TALKS
U.N. ambassadors travels to both UAE and Israel
What began as a diplomatic endeavor two years ago came full circle when Israeli Ambassador to the U.N. Gilad Erdan touched down in Abu Dhabi last week with a group of diplomats representing 14 countries around the globe, Jewish Insider’s Melissa Weiss reports. The ambassadors were part of the latest cohort of diplomats traveling with Erdan to the Middle East.
Natural extension: As Israel’s envoy in Turtle Bay, Erdan has made it his personal mission to bring colleagues to the Jewish state. The addition of the United Arab Emirates, he explained, was a natural extension of the Abraham Accords, signed two years ago, which normalized relations between Israel, the UAE, Bahrain and, months later, Morocco and Sudan. UAE Ambassador to the U.N. Lana Nusseibeh organized the UAE portion of the trip. Participants included ambassadors from Romania, Italy, Sierra Leone, Peru, Haiti, Georgia, Thailand, Costa Rica, Slovenia, Serbia, Moldova, Belize and Malta. Amb. Robert Wood, the U.S. alternate representative for special political affairs, was also in the delegation.
MBZ chat: In Abu Dhabi, the group sat with UAE President Sheikh Mohamed bin Zayed in a meeting that lasted more than an hour, several participants told JI. Bin Zayed, Erdan said, “explained about his vision and why he believed that Jews Muslims and Christians can not only live together, but also pray together…it was inspiring.” The delegation is in Israel until Tuesday, where the traditional touring sites — Yad Vashem, Masada, the Peres Center for Peace — are on the itinerary, along with some less-traditional sessions. The group met on Sunday with Israeli President Isaac Herzog and Prime Minister-designate Benjamin Netanyahu.
Read the full story here in Jewish Insider.
Circuit Chatter
No Tariffs: The governments of the UAE and Israel ratified the free-trade agreement they signed in May, eliminating or reducing tariffs and fees on 96% of goods traded.
Betting on Bibi: Business prospects may turn brighter for NSO, the Israeli firm blacklisted for providing its spyware to foreign countries, as Israel’s Benjamin Netanyahu returns to the Prime Minister’s Office.
LNG Spree: Germany and other European nations are rushing to build liquified natural gas facilities to replace fuel bought from Russia, importing new supplies from the Gulf.
Mile-High: Saudi Arabia’s Public Investment Fund is mulling plans to build a skyscraper in Riyadh that would be the world’s tallest, rising 2 kilometers (6,562 feet) high.
Final Frontier: More than 50 countries participated in last week’s Abu Dhabi Space Debate, which seeks to become the world’s primary forum on space exploration.
Speed Trap: Israeli police are testing traffic enforcement systems that employ sensors and artificial intelligence that can ticket violators without involving police officers.
Golf Handicap: Confidential records obtained by The New York Times show the upstart Saudi-backed LIV Golf tour is far off-track from success and never really expected to make a profit.
Closing Circuit
Which Waze: Google will merge the team working on Waze, the Israeli-founded traffic app acquired for $1 billion, with its Google Geo unit that develops mapping products.
Food Diversity: Dana Global, a desert-tech business incubator with offices in the UAE and Israel, signed an agreement with Abu Dhabi-based Silal Food & Technology to help diversify agricultural and manufactured product sourcing, and promote food security.
Faster Chips: Israel’s Neureality, which accelerates the ability of AI semiconductor chips to process information, raised $35 million in a funding round led by Samsung Ventures, OurCrowd and other investors.
Black Sheep: Saudi Prince Khaled bin Alwaleed’s KBW ventures invested in a $12 million funding round for Black Sheep Foods, a maker of plant-based lamb substitute.
Startup Hatchery: Sanabil Investments, a U.S.-Saudi business accelerator program, has accepted 15 new startup companies from Saudi Arabia, the UAE, Egypt and Oman.
On the Circuit
Chinese President Xi Jinping visited Saudi Arabia last week on a trip that yielded 35 investment agreements worth about $30 billion in fields ranging from green energy and construction to medical care and Chinese language instruction.
Mike Tyson, the former heavyweight boxing champion, was seen making the hajj pilgrimage to the holy city of Mecca in Saudi Arabia with record producer DJ Khaled.
Brittney Griner, the American women’s basketball star imprisoned for 10 months in Russia, was freed last week with help from the UAE. After her release, she stopped in Abu Dhabi on a private flight from Moscow before boarding a plane to the U.S.
Ahead on the Circuit
Dec. 13-15, Dubai, UAE: Middle East Natural and Organic Products Expo. Bringing 275 suppliers from 65 countries for region’s biggest natural foods fair. Dubai World Trade Centre.
Jan. 16-19, Dubai UAE: iFX Expo Dubai 2023. Largest financial B2B conference, connecting top executives to large international firms. Dubai World Trade Centre.
Jan. 30-Feb. 1, Tel Aviv, Israel: CyberTech Global Tel Aviv. Conference brings leading executives from computer security companies, senior government officials, investors from over 80 countries across the globe. Expo Tel Aviv.
Culture Circuit
Hail Morocco: Morocco’s 1-0 victory over Portugal in the World Cup soccer quarterfinals in Qatar unleashed ecstatic cheers in Africa and across the Middle East as the team became the first from Africa or any Arab country to advance to the semifinal round.
Red Sea Flicks: “Valley Road” by Saudi director Khaled Fahd won the Golden Yusr Award for best feature film at the second annual Red Sea International Film Festival in Jeddah, Saudi Arabia on Saturday night.. Oscar-winning martial arts star Jackie Chan received the Golden Yusr Honorary Award for his contribution to the film industry.
Guitar Royalty: Israeli singer and guitarist Yitzhak Klepter, one of the countries best known and beloved musicians, died last week from complications of lung disease. He was 72. Klepter was a member of the Kaveret band in the 70s and later formed the pop rock bank Tuned Tone. Israeli President Isaac Herzog paid tribute to Klepter in a tweet, calling him, “King of the guitar, a gifted composer and writer. His voice and melodies will accompany us forever.”
Saudi Pop: Saudi Arabia is trying to cultivate its own style of pop music called S-Pop by recruiting foreign companies to train performers, host musical events and build an entertainment industry. The Saudi Ministry of Culture is in discussions with a team of Saudi and South Korean writers and producers to develop the project.
