To build up business in Bahrain, Israeli envoy says take it slow
MANAMA, Bahrain – After 16 months as Israel’s first ambassador to Bahrain, Eitan Na’eh says he’s learned some important lessons while trying to promote business between two countries that were longtime adversaries in the Middle East conflict. Above all are taking it slow and adjusting ambitious expectations for what constitutes success after the initial exuberance generated in 2020 by the Abraham Accords.
Speaking to The Circuit in the Bahraini capital of Manama, the 59-year-old diplomat said the small island nation’s importance goes beyond the modest bilateral trade volume generated so far and may play a crucial role whenever Saudi Arabia, the region’s biggest economy, is ready to establish official ties with Israel. Na’eh previously served as Israel’s head of mission in Abu Dhabi and as ambassador to Turkey and to Azerbaijan.
The interview, conducted in mid-March on the sidelines of the Israel-Bahrain Connect2Innovate business conference, which brought together hundreds of investors, executives and government officials from the two countries to the kingdom, has been edited for length and clarity.
The Circuit: How has your experience as an Israeli diplomat in two Arab Gulf states altered your approach to cultivating business in the region?
Eitan Na’eh: When I started in Abu Dhabi, I went to see the heads of the investment departments of the big sovereign government funds, Mubadala and ADIO. That’s where it really clicked for me that nothing is going to happen quickly, or just like that. They said, look, the way we invest in new markets, it takes six years to come in. That is the process. We invest in funds, or funds of funds, and we see what happens over two years, using small amounts of money. And then we come again with other investors for another four years. That’s six years in total. Depending on the result, we may then [fully] come in.
That was in early 2021 – about two years ago. And now you see them buying 22% of Tamar [an Israeli offshore gas field]. And you see them trying to buy Phoenix [Insurance Group] and you see them wanting to go into Haifa port and you see them buying shares in other high-tech companies. So you see a process. It didn’t happen in one day. We are two years into the Abraham Accords. It will be slower than we expected. I can clearly see it happening once they understand us better, once we understand them, what makes each other click, how things work. Maybe not in my time. But we have laid the foundations.
The Circuit: What were your biggest initial challenges in representing Israel in the Gulf?
Eitan Na’eh: I was sent to Abu Dhabi first and then to Bahrain to set up an embassy, to map contacts and to deepen relationships. There are four solid legs in diplomacy, like a table: political [affairs], security, economic and people-to-people. I compare it to Turkey, a country I know very well. We had relations with Turkey since 1949. We had an embassy, we had staff, we recruited more, but we had the basics when I came.
In the Gulf, we had barely anything. For the very few people who were in touch with Israelis, it was all under the table, hush-hush. The leadership at the very top were in touch. Discreet meetings were held in various European capitals, sometimes here but nobody knew about it.
The Circuit: Most of the attention since the normalization accords has focused on the UAE, with a free-trade agreement signed last year and $2.7 billion in economic activity. Why don’t we hear much about Israeli business deals with Bahrain?
Eitan Na’eh: We have to look at success not just by numbers, because there are no big numbers. The numbers will grow. The question is when. There are no investments now in the billions. But there are smaller investments. Admittedly, things here are taking a longer time. We see more and more businesspeople coming here. I see many more visits, there is no week when I don’t have a visit from an Israeli trade delegation, a business delegation, investors or people who come to open offices here.
Nothing happens just because somebody signed a paper. From signing papers to the rock-and-roll, to actually moving to real work, that takes time. It takes time for people to check, to explain, to raise money, to hold their feasibility study pilots and then to roll out the whole project. So for the projects that I’m aware of, people are looking at four years’ time to execution, then more time until you see the ROI, the return on investment.
The Circuit: Bahrain is connected to Saudi Arabia by a 17-mile causeway in the waters of the Gulf and by numerous political, economic and cultural ties. How would the situation change if normalization spreads to Saudi Arabia and other Gulf states?
Eitan Na’eh: Only two countries in the Gulf have normalized relationships with Israel, but there are more than just two countries in the Gulf. So it’s baby steps, but they’re meaningful steps, especially when you know where we started. When you know the capabilities, when you know the constraints, you learn to appreciate that.
People here want to invest in Israel. Let’s see what happens with Saudi Arabia. [If there’s an agreement between the two countries], that will open the potential for hundreds of billions of dollars of trade from east to west. That’s a lot of money. That will open up more markets. It will go around Africa, it will go through the Suez Canal, it will go through [Bahrain] on the causeway. It will take time. But you are witnessing here the beginning.
The Circuit: What are the major areas of business interest you’ve found between Israel and Bahrain?
Eitan Na’eh: We see a lot of fintech, [including] one Israeli company that centers its activities here. They chose the location because of ease of work, because they found a listening ear that was ready to go a certain way towards them, to enable them to work. I see cyber companies. I see service companies. I see agriculture. You see a lot of health-related companies. The fastest growing vertical is clearly medical. The most modern innovation center outside Israel in the Middle East is here in Manama at the American Mission Hospital. It’s a private hospital that has a partnership with Sheba Medical Center in Israel. They have pretty quickly adopted Israeli technology, including remote medical care [for home treatment].
The Circuit: What is the draw for Bahraini investors in Israel?
Eitan Na’eh: Some of them go because they think there is something new in Israel. A big investor here came to the embassy. I asked why do you want to go to Israel. He says, look, we are looking for the next thing. And we understand that in Israel, we may find the next thing in tech. We want to lead. We want to be ahead. We understand Israel has the technology and we want to see what’s there. It doesn’t mean that the first moment he gets off the plane, that he will take out his wallet and start investing. That will take time and the measure of the time is in years.
The Circuit: What’s your strategy for promoting more trade between Israel and Bahrain?
Eitan Na’eh: We need here to break the psychological barriers. Think of all the baggage that they carry on their shoulders. More than 50 years of anti-Israel incitement that Jews kill Palestinians and that Jews will beat us if they know we are Arabs. We sent 15 young people to Israel and some were even afraid to tell their families that they went. More people in Bahrain are less shy now and they’re coming slowly to Israel. I tell them, go sit in a restaurant, go to a bar, drink juice, go to the corniche, go to Hayarkon Street. Do people watching, meet friends. Every Bahraini that I’ve met who went to Israel — people in government or the private sector, journalists, young people — they came back with a wow. They said it was mind-blowing. This is not an exaggeration. It’s not that I’ve seen thousands of people. It’s not there yet. But it’s happening.
Abraham Accords Games to spotlight soccer diplomacy at Dubai Expo
This article first appeared on Jewish Insider.
As Expo 2020 Dubai comes to a close at the end of March, the United Arab Emirates will host a soccer match between teams from the Abraham Accords’ signatory countries, U.S. Ambassador to Israel Tom Nides announced on Wednesday.
Players from Israel, Morocco, Bahrain and the United Arab Emirates will face off in Dubai in the inaugural “Abraham Accords Games,” an effort being spearheaded by Nides and the UAE’s ambassador to Israel, Mohamed Al Khaja. The event will also feature a “dinner celebration” with chefs from each country.
“I fundamentally believe that travel, tourism [and] culture is the way to cement, in people’s psyche, the importance of these Abraham Accords,” Nides told reporters in a virtual press conference on Wednesday.
Since arriving in Israel in December, Nides has emerged as one of the most vocal proponents of the Abraham Accords — the 2020 pact that normalized ties between Israel, the UAE, Morocco, Bahrain and Sudan — within President Joe Biden’s administration.
The event will take place on March 29, and the delegations from each country will also visit the others’ booths at the Expo. The culture ministers from each of the four countries will be in attendance. After the event, they will sign a “cultural cooperation declaration” with the goal of “fomenting and just continuing to advance the idea that cultural cooperation is the key to success to the Abraham Accords,” said Nides.
With the event taking place in an international hub like Dubai, Nides said he hopes the event will show other countries the benefit of joining the Abraham Accords.
“It just shows what happens when there’s cooperation,” he explained. “Obviously, the more people understand each other, the more ability there is to work together, not only on playing football or eating food, but how do we do economic ties? How do we do energy ties? How do we do security ties? How do we do cooperation?”
Sudan, which was a signatory to the Abraham Accords in 2020 but has been absent from most of the resulting cooperation, will not participate in the Abraham Accords Games. Sudan “is going through some complications with leadership,” said Nides, referring to a military coup that rocked the country last year, but “our hope is that we’ll all be doing all these events together.”
The Abraham Accords Games is the first major event in a cross-cultural approach Nides is taking to advancing the Abraham Accords and showing their potential to other countries in the region. “I’m hoping that Israel plans to do something this summer for a month of different activities in the cultures of all the countries,” Nides said, explaining his vision for a “whole month of concerts and plays and arts. There’s just a massive amount of stuff that people don’t know about each one of these countries.”
Nides urged policymakers and practitioners in the Abraham Accords countries to “get in the mindset of kids” by working with “influencers, pop stars [and] cultural icons,” which he said he has a plan to do.
Tzipi Livni opens up about her Gulf visits before the Abraham Accords
Long before “Hatikvah,” Israel’s national anthem, played openly in Abu Dhabi or Manama, long before Israeli military jets took part in training exercises with Gulf countries, and long before normalization agreements were signed at the White House, there was one Israeli leader engaging in quiet, and very secret, diplomacy with the Arab world: Tzipi Livni.
Livni, 63, who served in a variety of Israeli government positions, including deputy prime minister, foreign minister and justice minister, between 2001 and 2014, also led the country through several rounds of peace negotiations with the Palestinians. It was this role – where she worked opposite the Palestinian Authority’s chief negotiator, the late Saeb Erekat – that led her to forge warm ties with multiple Arab leaders, some of whom are now at the forefront of the Abraham Accords, the U.S.-mediated normalization agreements between Israel and four Arab countries.
In a recent interview with Jewish Insider, the former Israeli lawmaker downplayed more than a decade of covert meetings and conversations with country leaders, foreign ministers and other representatives of the Emirates, Bahrain, Qatar, even Saudi Arabia. And while former President Donald Trump’s son-in-law and senior advisor Jared Kushner has twice been nominated for a Nobel Peace Prize as one of the architects of the Abraham Accords, it is possible that this entire process might not have happened if not for the groundwork laid by Livni.
“Truthfully, I didn’t think that Kushner could do this; it’s really a huge achievement. I mean, to have these agreements without the Palestinians, it really surprised me when I saw the news. It is a real game-changer,” Livni said during the interview at her Tel Aviv home. “[Kushner] deserves all the credit he is getting.”
Today, relations between Israel and the United Arab Emirates, Bahrain and Morocco are out in the open, even flourishing. Just this week, Israeli Prime Minister Naftali Bennett made history as the first Israeli premier to travel to the Gulf state of Bahrain. In January, Israeli President Isaac Herzog proudly met with Abu Dhabi’s Crown Prince Sheikh Mohamed bin Zayed, following similar visits by Bennett and Foreign Minister Yair Lapid to the United Arab Emirates.
Livni said that she was as surprised as anyone when the White House announced the agreements in August 2020, although, she noted, there were some signs of a regional sea change. She recalled two key incidents several months before that momentous announcement, and the subsequent signing of the Accords on the White House lawn in September 2020, that made her realize attitudes were shifting.
“In 2019, not long after I quit politics, I was invited to attend a conference in Bahrain,” Livni said. “It was an international conference, but the event was sponsored by Bahraini officials, and I arrived there openly with an Israeli passport.”
“For the first time ever, I held a public meeting with [Bahrain’s Foreign Minister Khalid bin Ahmed] Al Khalifa, and we even took a photo together,” she continued. “It felt very normal and that was something I was not used to.”
Livni stepped back from the Israeli political scene three years ago, heading shortly after to teach a course in diplomacy at the Harvard Kennedy School in Cambridge, Mass. It was there, at the tail end of 2019, that she once again noticed a shift in attitudes toward Israel in the Arab world. Former Norwegian peace negotiator Terje Larson reached out to her just prior to her return to Israel asking her to join him at an international conference in Abu Dhabi. As Livni waited for a direct flight to the UAE, ground staff called ahead to Abu Dhabi making sure officials there would accept an Israeli passport. The message was that they would.
“At the conference, there were leaders from all over the region, not only those who have now normalized relations with Israel, and we discussed all different matters, including the Israeli-Palestinian peace process,” said Livni, who was invited to join a public panel for the first time ever.
“That was before the Abraham Accords, when the Arab world was still saying it would not normalize ties without Israel first achieving peace with the Palestinians,” she said. “But the atmosphere was different. I was accepted and I sat openly with those whom I had met with in secret before.”
Livni traces her covert meetings back to the period of the Annapolis Conference more than a decade earlier. It was her Palestinian peace partner, Erekat, who first lobbied Arab leaders on her behalf, urging them to meet with the Israeli leader.
Later, said Livni, Larsen stepped in, inviting her and other regional leaders to gather under the guise of his International Peace Institute (IPI). “The meetings were not public but there were others in the room from Arab countries,” she said, describing how she soon had the phone numbers of numerous Arab ministers and their assistants and began meeting with them regularly, informally, on the sidelines of international gatherings such as the U.N. General Assembly in New York and the Munich Security Conference in Germany.
“For many years I had these discreet meetings,” Livni mused. “And it was clear that if anything was leaked to the media then it would have been the end of these kinds of meetings, so I kept it completely secret.”
Among the meetings and relationships forged, Livni describes a 2008 visit to Qatar, for the Doha Forum on Democracy, Development, and Free Trade. Her appearance at the conference was made public, but while in Qatar she attended a dinner at the home of the country’s emir, Sheikh Hamad bin Khalifa Al Thani. There she met with the foreign ministers of Oman and other Arab states, as well and held a heated exchange with Turkish President Recep Tayyip Erdogan.
“We discussed Gaza, Hamas and what needs to be done,” said Livni of her meeting with the Turkish leader, whose attitude toward Israel shifted in the subsequent years. Two years later, Erdogan would expel Israeli diplomats following the Mavi Marmara flotilla incident. With the other Arab leaders at the Doha dinner, Livni said, “we discussed the situation in the region, the mutual threats, what was happening in Israel, with the Israeli-Palestinian peace process, and I was really impressed with how familiar they all were with Israel and Israeli politics.”
“It’s clear that this opened the door, it was the first understanding that we have mutual regional interests and there was the possibility to have a direct line, discreetly, to speak about these issues,” she continued. “There were also other lines [between the countries] but they were mostly on security. I was speaking with them on broader challenges.”
Throughout a decade of such meetings, Livni told JI that it was always made clear to her that normalization with the wider Middle East region – 55 Muslim and Arab states – would only come after Israelis and Palestinians made peace. For the Palestinians, she said, this backing was their main leverage.
However, she described a conversation with Erekat in 2014, during the last serious round of peace negotiations facilitated by then-Secretary of State John Kerry, after Palestinian President Mahmoud Abbas refused to respond to the deal being offered. “I told him, ‘Listen, this is the time to make a decision because the Arab world cannot just stay waiting for you like this,’” Livni said she warned him. Six years later, the normalization agreements were signed between Israel, the UAE and Bahrain, catching the Palestinians off-guard.
“Frankly, I was really happy when the Abraham Accords were signed and I am hoping that more countries will join, but when it comes to the Israeli-Palestinian conflict, we are now on a slippery slope towards a one-state reality,” she theorized.
While there is a possibility that the normalization agreements could make peace with the Palestinians more likely, Livni cautioned that the Accords are more likely to cause apathy on both sides. The process, she explained, has been used to sell the concept of “peace for peace” to the Israeli people. Now, she explained, that some will say, “‘What is the use of having peace with the Palestinians? We don’t need it.’ I am really worried about that.”
And Livni added, she believes it is unlikely that a U.S. administration will initiate another attempt to bring about peace or even that Israeli or Palestinian leaders would respond to such a gesture.
“In Israel, we have a government whose guidelines are not to touch this sensitive issue,” she pointed out. Even though her days as the country’s peace negotiator are now over and attitudes have clearly changed in the region, Livni said she has not given up on her vision for peace with the Palestinians.
“I believe peace is crucial for the future of Israel,” she said.
