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👋 Good Monday morning in the Middle East!
President Joe Biden heads to the region this week with a series of objectives that include bringing down gas prices and pushing forward Israel’s integration into the region. Unlike his predecessor, former President Donald Trump, whose first foreign trip started in Saudi Arabia, Biden waited a year and a half to visit, having pledged during the campaign season to make the Gulf kingdom a “pariah” for the murder of dissident journalist Jamal Khashoggi. With energy costs soaring around the world in the wake of the Russia-Ukraine conflict, Biden acknowledges that he doesn’t have much choice. Writing on Sunday in The Washington Post, the U.S. leader said his intention is “to reorient — but not rupture — relations with a country that’s been a strategic partner for 80 years.”
Before he makes the flight on Air Force One to the Saudi port city of Jeddah, Biden will spend three days in Israel, where he may have a surprise or two in store connected to the Trump-brokered Abraham Accords. Israeli investors tell The Circuit they see increasing signs that Saudi Arabia could soon take some initial steps to normalize relations with the Jewish state. That may not happen officially while Biden is in the region, but those who have been plying the Gulf-Israel channel for years say the buzz is getting louder. And while public declarations may not come immediately, both sides acknowledge that lots of commercial activity is going on quietly between Israelis and Saudis.
With business in the Gulf at a lull for the Eid al-Adha holiday this week, Rebecca Ann Proctor takes a journey to eastern Saudi Arabia, where Ithra, the King Abdulaziz Center for World Culture, is mounting a show that examines the impact of change on some of the most beloved places of 28 artists. Among the works are prayer-filled walls in downtown Jeddah, watercolors from the Gaza Strip and a lone tree in Baghdad.
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].
Biden trip kindles Israeli hopes for broadening business connections with Saudi Arabia
President Joe Biden’s visit to the Middle East this week is raising expectations that he will coax some gestures from Saudi Arabia that will bring the kingdom closer to open business ties with Israel, The Circuit’s Jonathan Ferziger reports. Though U.S. officials have indicated that an official extension of the Abraham Accords to include Riyadh won’t occur on this trip, Biden’s itinerary, which includes a direct flight from Tel Aviv to the Saudi port city of Jeddah, is too tantalizing for Israelis to treat casually.
Fear of missing out: “They see that there’s something brewing,” said Tally Zingher, managing director of Blue Laurel, a Middle East strategic advisory firm. With the Biden trip shining a spotlight on Saudi Arabia, Zingher said, people are approaching her for guidance and saying, “We want to be in, we don’t want to miss this.”
No longer a pariah: Biden is scheduled to arrive on Wednesday at Israel’s Ben Gurion International Airport, where he will be greeted by newly installed Prime Minister Yair Lapid. The three-day visit will also include a brief trip to the West Bank for a meeting with Palestinian Authority President Mahmoud Abbas. On Friday, Biden flies across the Red Sea to Jeddah, where the next day he will meet leaders of the Gulf Cooperation Council at the “GCC+3” summit. While the meeting will focus on Biden’s efforts to bring down oil prices, it will also be where he meets with Crown Prince Mohammed, known as MBS.
Overcoming reservations: The president’s Mideast trip comes nearly two years after the United Arab Emirates and Kingdom of Bahrain signed the U.S.-brokered Accords with Israel. The deal’s success bolsters the argument that normalizing ties could also be useful for Saudi Arabia, the Middle East’s biggest economy, analysts say, but probably not enough yet to overcome the preferences that the Saudi Royal Court retains in keeping relations with Israel unofficial and under the radar. Saudi leaders acknowledge their interest in developing closer ties with Israel but have said no formal agreement will be signed until a resolution to the Israeli-Palestinian conflict is reached. “There clearly are moves that will happen,” said Ghanem Nuseibeh, a political risk consultant and co-founder of Cornerstone Global Associates, which has offices in London and Dubai. “The question is how much will be public and how much behind the scenes.”
No more make-believe: Though Saudi-Israeli connections are likely to remain low-key for at least the coming months after Biden’s visit, those involved say business relations between the two countries have changed dramatically since just a few years ago, when contacts were disguised through second passports and shell companies. “It used to be, OK, pretend to be American, pretend to be British, pretend to be this or that,” said Shmuel Bar, chief executive of IntuView, an Israeli company that has in the past acknowledged selling its sentiment-analysis software to Saudi customers. “That’s no longer the case. When you talk to them, it’s not, ‘let’s play make-believe.’”
Read the full story here.
Top in Tech: The UAE unveiled a package of incentives aimed at attracting 300 top global technology firms to set up operations in the country.
Ice Cream Wars: Ben & Jerry’s sued its parent Unilever to block the sale of its Israeli business to a local licensee, saying the sale was inconsistent with its values to sell ice cream in what Ben & Jerry’s called “Occupied Palestinian Territory.”
Suez Unstuck: The Suez Canal’s annual revenue rose 20 percent in the 2021-2022 fiscal year to $7 billion, its highest ever.
Crypto Cuts: Israeli-American cryptocurrency platform Celsius laid off 150 employees after halting withdrawals on June 13 in a move that triggered a worldwide sell-off of digital currencies.
Non-Fungible Planes: Etihad Airways will sell non-fungible tokens (NFTs) based on the models it flies of the Boeing 787 Dreamliner aircraft, each NFT priced at $349 plus tax.
Halal Economy: UAE Economy Minister Abdulla Al Marri said new trade pacts with Indonesia and India, two of the most populous nations, will be a boon to the halal foods market that serves the world’s 2.5 billion Muslims.
Tax Shelter: The U.S. is investigating how Perrigo, one of the largest makers of non-prescription drugs, used Israel as a tax shelter and switched accounting firms to engineer the arrangement.
Swedish Buses: Volvo Group is investing in Israel’s Optibus to help accelerate deployment of its electric buses in 85 countries.
Seventh-Biggest Bank: Kuwait Finance House agreed to fully acquire Ahli United Bank for $11.6 billion, creating the Gulf’s seventh-largest lender, worth $115 billion.
Catching Bad Data: IBM acquired Israel’s Databand.ai, paying a reported $150 million for the company, which enables users to catch “bad data” through its artificial intelligence software.
Colostrum Extraction: Israel’s Maolac, which extracts proteins from bovine colostrum to use as a food ingredient, raised $3.2 million in a funding round led by OurCrowd.
Nasdaq Awaits: Israeli cybersecurity HUB Security plans to delist from the Tel Aviv Stock Exchange ahead of its SPAC merger, which will enable the company to sell shares on the Nasdaq.
Cutting Back: Israeli online trading platform eToro said it is laying off 6% of its workforce after dropping a SPAC merger that would have brought it to the Nasdaq.
Seed Fund: Israel’s F2 Venture Capital closed its third seed fund of $150 million for Israeli companies, as well as a $100 million fund for those already in its portfolio.
Hackers Beware: Apple plans to release a new “Lockdown Mode” for its iPhones, iPads and Macs that it says can stop hackers who use NSO’s Pegasus application. Israeli security firm Cirotta, meanwhile, has introduced a smartphone case that employs a non-software solution to stop intruders.
On the Circuit
Mohammad Barkindo: The secretary general of the Organization of Petroleum Exporting Countries died on July 6 at 63. He will be succeeded by Kuwait’s Haitham Al-Ghais.
Rajeev Misra: The head of SoftBank’s venture capital unit will play a reduced role in the Japanese investment giant and lead a new $6 billion fund backed by Abu Dhabi sovereign wealth funds.
Doron Cohen: The chief executive of Israeli holding company Discount Investment Corp. Ltd. said he plans to step down and bid with a group of investors for control of Cellcom, Israel’s largest mobile phone company.
Ahead on the Circuit
July 14-28, Israel: The 2022 Maccabiah Games. The athletic tournament, now in its 21st year, draws Jewish athletes from some 60 countries for competition in sports ranging from track and gymnastics to soccer and ice hockey. Opening ceremony in Jerusalem with events at various sites across Israel.
July 17, Lebanon: The annual Baalbeck International Festival’s final night features a performance by pianist Simon Ghraichy, dancer Rana Gorgani and digital composer Jacopo Baboni Schilingi.
July 19, Israel: Nazareth Conference on Arab Society in Israel. Bank of Israel Governor Amir Yaron appears with Arab business and government leaders. Golden Crown Hotel, Nazareth.
Saudi art show examines impact of places and change
Cracks in the wall: Brick fragments and pieces of coral, stone and wood are held loosely together to form a wall. Slips of paper containing prayers and Islamic texts sprout from the cracks. Created out of construction rubble from Jeddah’s historic district of Al-Balad, the work by Saudi artist Asma Bahmim titled “Wandering Walls” is an ode to her birthplace. As the port city’s streets are being torn up in a $20 billion government-financed urban facelift, Bahmim’s piece recalls her growing up there with an aunt who filled their home with her scribbled supplications.
Works by 28 artists: Bahmim’s work is part of “Amakin,” an exhibition featuring works by 28 artists from Saudi Arabia and around the world, taking inspiration from the idea of “place,” or makan, in Arabic, as Rebecca Anne Proctor reports in The Circuit. Organized by Venetia Porter, curator of Islamic and Contemporary Middle Eastern art at the British Museum, the exhibition runs through Sept. 30 at Ithra, the King Abdulaziz Center for World Culture, which was built by the state-owned oil company Saudi Aramco in the eastern city of Dhahran.
Emotional connection: The works on display, which range from paintings and collages to sculptures and film, document places from a variety of locations that carry emotional connections for each artist. “They interface between art and documentation,” Porter told The Circuit during a visit to Ithra. “There’s a strong Iraqi-Saudi connection in the show, but then I also wanted to bring in the work of Pakistani artists — their makan is further away but connected.”