The Weekly Circuit
👋 Good Monday morning in the Middle East!
Cybersecurity and space exploration are emerging as fruitful areas for joint research and investment between Arabs and Israelis. That was the message that rang out from one conference hall to another in Tel Aviv last week, where cabinet ministers, scientists and investors hailed the prospects for Middle East cooperation made possible by the 2020 Abraham Accords.
At the Cybertech 2023 conference, top government officials responsible for cybersecurity in the UAE, Bahrain, Morocco, Israel and the U.S. appeared together onstage to talk about the benefits of regional partnership. “The first word needed for success is trust, and what you see in front of you today is trust,” said Salman bin Mohammed bin Abdullah al-Khalifa, CEO of Bahrain’s National Cybersecurity Centre. “We’ve all been working together behind the scenes but now we’re past that stage, and I think we now want to see this trust in action.” Read The Circuit’s interview with Israeli tech patriarch Yossi Vardi, who hosted both Cybertech and the subsequent DLD Tel Aviv Innovation Festival last week.
Across town at the 18th Ilan Ramon International Space Conference – named for the Israeli astronaut who died with six American crewmates in the 2003 Columbia space shuttle disaster – discussion of Arab-Israeli cooperation generated headlines. “Today we are witnessing a new era of space exploration, one that is marked by cooperation between countries, private companies and research institutions,” said Sarah bint Yousef Al Amiri, the UAE minister of state for advanced technology and chairwoman of the UAE Space Agency. “Let us continue to work together and make the impossible possible.”
Debate continued to rage in Israel over the prospects of a credit downgrade because of Prime Minister Benjamin Netanyahu’s proposals to limit the power of the judiciary, which opponents have branded undemocratic. Thousands marched for the fifth week in a row at protest demonstrations in Tel Aviv, Jerusalem and Haifa. Jacob Frenkel, former governor of the Bank of Israel and ex-chairman of JP Morgan Chase International, criticized the prime minister for dismissing warnings about investor risk. “When JPMorgan makes a recommendation, take it very seriously,” he said in a television interview. Netanyahu, who flew to Paris last week for a meeting with French President Emmanuel Macron, also met with business leaders there and said he heard no concern about dangers of investing in Israel.
The UAE’s envoy to Israel, Ambassador Mohammed Al Khaja, met with the current governor of the Bank of Israel, Amir Yaron, who has also cautioned about the impact of the judicial reform package on Israeli markets. Al Khaja tweeted his appreciation to Yaron “for sharing your insights & prospects of Israel’s economy & the growth potential by engaging all sectors of society. We look forward to continue working together to realize the full potential of our countries’ thriving economies.”
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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OFF THE SHELVES
Missing pieces to cultural puzzles appear in UAE-Israel library ties
Nearly 120 years ago, Hermann Burchardt, a German Jewish explorer, was traveling in the Middle East, talking to Arab leaders and taking photographs, Jenni Frazer reports for The Circuit. Among the iconic pictures was what is thought to be the first image of the founding father of Abu Dhabi, Sheikh Zayed bin Khalifa Al Nahyan, known as Zayed the First. He was the great-great-grandfather of the current president of the United Arab Emirates, Sheikh Mohamed bin Zayed Al Nahyan.
Murder mystery: Although the pictures Burchardt took in Abu Dhabi became famous in the region and reproduced many times, his personal impressions of the people and places he photographed remained a mystery. He and his fellow travelers were murdered in Yemen in 1909 and his journals were assumed to have been lost. Eventually, via the estate of Eugen Mittwoch, a German scholar of Islamic and Judaic studies, Burchardt’s missing diary — and hundreds of pages of correspondence, notes and official documents, together with numerous photos — all found their way to the National Library of Israel in Jerusalem.
Filling in the blanks: It was this material that delighted Hamad Al-Mutairi, director of the archives department of the Emirates National Library and Archives (NLA), based in Abu Dhabi, when he and other colleagues visited Israel last summer. For Al-Mutairi, seeing the Burchardt collection in Jerusalem was thrilling, and filled in the blanks for his researchers. “We were able to see details about the kind of food he ate, and the type of traditional hospitality given to him at that time as a traveler in the region.” The Emirati visit — and a memorandum of understanding between the two libraries — is a direct and tangible result of the Abraham Accords, signed initially between Israel and three partners — the UAE, Bahrain and Morocco — in 2020.
Joint exhibit: The Burchardt material is essential to drawing a fuller picture of the first years of the individual emirates that now make up the UAE. The Israelis have provided Abu Dhabi with digital copies of Burchardt’s diary and the accompanying papers, which will become part of the NLA collection. “We didn’t stop there,” said Al-Mutairi. “We’re now trying to find the right time to put together some sort of exhibition about Burchardt, charting his journeys across the region. It might be online or it might be physical.” The formal agreement between the two libraries will ensure that the material will marry the holdings that each has; and in the meantime, experts from the two institutions will work together to enrich and expand background information and metadata related to the archive’s contents, including translations, greatly increasing its value to scholars across the globe as a rare reflection of Gulf history.
Oral history: The UAE has built up an enviable body of material based on oral history, while the Israeli library has tended to focus more on physical collections — its Islam and Middle East collection, for example, includes priceless documents and manuscripts not even found in much of the Arab world. Samuel Thrope, curator of the Islam and Middle East collection in Jerusalem, said he has been talking with colleagues at the NLA about oral history connected to a project on Clinton Bailey, an American-Israeli researcher who spent 50 years documenting Bedouin culture and society. The Bailey recordings — all 350 hours of them — are “super-interesting,” said Thrope, and chronicle Bedouin life in the Negev and Sinai between the late 1960s and 2009. “They have all been cataloged and digitized — and now we are in the process of transcribing them.”
Click here to read the full story:
Catching up with Yossi Vardi, wisecracking patriarch of Israel’s startup culture
Leaning back on a big white couch in the lobby at Tel Aviv’s Habima national theater, where he was hosting one of Israel’s most influential annual technology conferences, Yossi Vardi gets ready to shmooze. At 80 years old, he’s dressed in a scruffy black winter jacket and positions himself at the foot of Habima’s grand curving staircase, The Circuit’s Jonathan Ferziger reports. Inevitably the investors, CEOs and government ministers rushing to lead panel discussions at last week’s DLD Tel Aviv Innovation Festival catch his eye and pause to say hello. In Hebrew, English and Yiddish, Vardi trades quips with them – many of whom consider him their mentor – basking in his reputation as the adorably ornery grandpa of Israel’s startup culture. He doesn’t always remember people’s names so he asks them to draw close and examines their conference badge. One budding entrepreneur wouldn’t leave after a two-minute pitch, and Vardi told him his idea wasn’t worth listening to.
AOL deal: Over the arc of Vardi’s career, which took him from procuring crude for the energy-starved nation in the 1970s as chairman of the Israel National Oil Company to selling ICQ, the first widely used instant messaging software that his son Arik created with three friends, to AOL for $407 million, Vardi has been a leader in Israel’s tech world. He has since led, invested in or helped build more than 70 startups, and is in demand as a speaker around the world about how Israel earned its name as the Startup Nation. He was the recipient of the Prime Minister’s Award for Life Achievement. In between Vardi’s brief conversations with roughly two dozen conference participants heading up the stairs, The Circuit interviewed him about the difficulty of raising venture capital, investor concern about Israel’s judicial reforms, normalization with Arab countries, artificial intelligence and what makes a good startup entrepreneur.
The Circuit: How do companies survive this period when investment capital is drying up?
Yossi Vardi: First of all, they need one very important thing, which is luck. The second thing is money. Money has been disappearing very quickly and therefore some companies will perish and some companies will resolve this by being acquired by other people. We saw it in 2000, we saw it in 2008 to a lesser degree and we’re going to see it again now. It’s not a pleasant situation, but this is business, this is the cycle.
Israeli startup executives are marching in the streets against the government’s proposed judicial reforms and some companies are threatening to take their money out of the country. What impact does that have on foreign investors?
We are now in a very, very sensitive situation. Some people say it will be disaster, while the government says everything is wonderful. We have to stare directly at the crisis and figure out how to resolve it, because the question is not who is right and who is not right. Suppose the worst scenario appears and we lose the tech industry. Some people will say we are sorry. But it’s too serious to just say we’re sorry. We are playing here with a nuclear economic situation. I really hope that we get sober and learn how to reduce the risks.
What impact do the normalization agreements with the Gulf states have on investment?
You have to remember that the two fundamental agreements Israel has reached with Arab countries are with Egypt and Jordan, which stopped the killing of people. This is something holy. We must arrive at some kind of arrangement with the Palestinians. I think the Abraham Accords are important. They enhance the legitimacy of Israel in the eyes of other members in the region. So they’re a segue for us to do more things. In this respect the Abraham Accords are important and I hope they will develop further. When the economic situation of the world is good, we get a wonderful flow of funds. I don’t think business with the Gulf states is going to tilt the needle, but it’s very welcome.
Click here to read the full interview:
Vertical Farms: Saudi Arabia’s Public Investment Fund signed an agreement with Newark, N.J.-based AeroFarms to create indoor vertical farms. AeroFarms CEO David Rosenberg said the farms will be built in the kingdom and across the MENA region.
Money-Back Guarantee: Indian billionaire Gautam Adani returned $400 million invested by Abu Dhabi’s International Holding Co. after scrapping a planned stock sale in his flagship company.
Hedge Hub: Brevan Howard Asset Management is opening an office in Abu Dhabi that will specialize in digital assets as the UAE becomes a growing hub for hedge funds.
Russia Havens: U.S. officials are pressing the UAE and Turkey to crack down on Russians inside their borders who may be assisting Moscow’s war with Ukraine.
Enter Robodocs: Israel’s Beilinson Hospital hosted a conference on medical uses for artificial intelligence, drawing doctors, scientists and entrepreneurs.
Frequent Visitor: Jordan’s King Abdullah II visited President Joe Biden last week for the third time since Biden became president, making him the most frequent White House foreign guest. Read a report about Jordan’s aversion to the Abraham Accords in Jewish Insider and a recommendation by the Washington Institute for Near East Policy that the king focus on economic issues.
First Time: Steven A. Cohen’s Point72 hedge fund bought a $15 million stake in startup MediWound, the American billionaire’s first known investment in an Israeli company
Gas Explorers: Qatar Energy will join a consortium of companies searching for gas off Lebanon’s Mediterranean coast, replacing a Russian firm that withdrew in September.
Fusion Funds: NT-Tao, an Israeli startup developing nuclear fusion-generated energy, raised $22 million in a funding round led by Delek US and NextGear Ventures.
Crypto Wallets: Addressable, an Israeli startup that secures crypto wallets with digital fingerprints, raised $7.5 million in a funding round led by Viola and Fabric Ventures.
Pollen Supplement: BloomX, an Israeli firm that uses AI to help crops get sufficient pollen, raised $8 million in a funding round led by Ahern Agribusiness.
Cloud Protection: Israel’s Sentra, a cybersecurity startup that protects cloud data, raised $30 million in a funding round led by Munich Re Ventures.
On the Circuit
Ayman Alsayari was appointed governor of Saudi Arabia’s central bank, Sama, replacing Fahad Almubarak, according to a royal decree by King Salman.
Ayelet Shaked, Israel’s former interior minister, was hired as chairperson of Kardan Real Estate, which will pay her $488,000 in salary and stock options.
Jason Greenblatt, the former White House Middle East envoy, writes in Arab News that Saudi Arabia and Qatar are becoming comfortable places to travel for religious Jews.
Ahead on the Circuit
Feb. 6-9, Riyadh, Saudi Arabia: LEAP Tech Conference. More than 100,000 expected at the second edition of the Middle East’s biggest tech event. Riyadh Front Expo Centre.
Feb. 14, Beersheva, Israel: Israel Climate Change Conference. Gathering of environmentalists, researchers, business executives and government officials. Ben- Gurion University campus.
Feb. 15, Jerusalem, Israel: OurCrowd Global Investor Summit. Thousands of investors and startup executives from around the world are expected at the annual conference. Jerusalem International Convention Center.
Feb. 20-24, Abu Dhabi, UAE: IDEX 2023, Middle East’s biggest defense industry conference. Abu Dhabi National Exhibition Centre.
Feb. 20-24, Dubai, UAE. Gulfood Exhibition. More than 4,000 companies from 120 countries attend the world’s largest food and beverage industry conference. Dubai World Trade Centre.
Movie Buyout: AMC Theatres sold its stake for $30 million in a joint venture that brought cinemas to Saudi Arabia in 2018. The international movie theater chain said it was bought out by Saudi Entertainment Ventures, its local partner, which will carry a license for the AMC’s brand and content. The New York-based entertainment company has been trying to manage a high debt load stemming from the Covid-19 pandemic. In Saudi Arabia, AMC said it “will transition from a management and investment role to a pure licensing relationship.”
Wellness Highway: Dubai is considering a plan to build a glass-covered “wellness highway” looping around the city, which would be powered by sustainable energy and contain 93 kilometers (58 miles) of paths for biking and running.
Bedouin Film Festival: Rahat, Israel’s largest Bedouin city, is hosting its first film festival over four weekends this month. Some 40 films, including movies from Saudi Arabia, Iran, Italy, France and Spain, will be screened at the Rahat Center for Fine Arts. The event includes the premiere of “Jirah,” a documentary by Rahat filmmaker Yosef Abu Medigam.