The free-trade agreement signed yesterday between the United Arab Emirates and Israel is generating interest among investors in Saudi Arabia who are patiently making plans for the possibility their own government will soon normalize relations with the Israelis, an Emirati venture capitalist said.

“I would expect that Saudi businessmen are just going to watch, learn and try to position themselves for if and when anything opens up” with Israel, said Sabah al-Binali, executive chairman of OurCrowd Arabia, a UAE-based unit of Israel’s OurCrowd venture capital platform.

Al-Binali spoke to reporters following a ceremony yesterday in Dubai in which Israeli Minister of Economy and Industry Orna Barbivai and Emirati Minister of State for Foreign Trade Thani Al Zeyoudi signed the agreement. Some 96 percent of goods traded between the two countries, including food, agricultural products, cosmetics, medications and medical equipment, will be exempt from customs duty under the pact.

The effort to tear down trade barriers between Israel and the UAE comes nearly two years after the two nations and the Gulf state of Bahrain signed the U.S.-brokered Abraham Accords, normalizing relations between the former Middle East adversaries. U.S. President Joe Biden is preparing a visit to the Jewish state in late June amid indications that his administration is pressing the Saudis to allow more open business relations with Israel.

Those include a report in the Israeli business publication Globes that dozens of Israeli executives have been allowed to enter Saudi Arabia recently using their Israeli passports, instead of being required to use second passports from other countries, as has long been the practice. Two senior Biden administration officials, meanwhile, traveled to Riyadh last month to discuss a possible agreement between Israel, Saudi Arabia and Egypt that would increase oil production in the region, according to Axios. The White House is also pressing for an agreement finalizing the transfer of two Red Sea islands from Egyptian to Saudi sovereignty, which would facilitate the oil deal.

As Arabs and Israelis grow more comfortable with each other, Al-Binali said it’s time to start work on a more comprehensive regional framework for the holdouts to the Abraham Accords: Saudi Arabia, Kuwait, Qatar and Oman. The pact signed in Dubai covers regulatory enforcement, customs regulations, government procurement, protection of intellectual property rights and e-commerce.

“It’s one thing to go do six bilateral free-trade agreements,” Al-Binali said in the discussion with reporters by Zoom. “The interesting question is can Israel end up at some point in the future doing a single, bilateral, free-trade agreement with the GCC [Gulf Cooperation Council] itself? Let’s not forget that the GCC is its own economic and political bloc.”

Trade between the UAE and Israel is expected to reach $5 billion in the “upcoming few years,” Al Zeyoudi said last week at the World Economic Forum in Davos, Switzerland. He said trade volume between the two countries since the Abraham Accords were signed has already exceeded $2.5 billion and will probably exceed $2 billion in 2022.

A private-equity fund run by Jared Kushner, the son-in-law of former President Donald Trump who led negotiations on the Abraham Accords, has arranged a deal to invest millions of dollars from Saudi Arabia’s sovereign wealth fund in Israeli startups, the Wall Street Journal reported last month. Jerusalem-based OurCrowd, which invests in some 340 companies through its crowdfunding platform and is the first Israeli venture capital firm licensed in the UAE through the Abu Dhabi Global Market, hired Al-Binali to run its operations in the Gulf.

Al-Binali minimized concern that the UAE might retreat from its growing ties with Israel because of recurring friction with the Palestinians, including clashes in East Jerusalem and the death of Al Jazeera reporter Shireen Abu Akleh during a firefight between Israeli soldiers and Palestinian gunmen in the West Bank city of Jenin.

“The Emirati culture is one that, yes, you can sit there and say we don’t like this or we like that and so on, but you know, we stay on course,” Al-Binali said, noting that the relationship was already “stress-tested” by the Israel-Hamas missile battles in Gaza in May 2021. Emiratis “spend a lot of time thinking about these things, and I believe that we will see a lot of resilience.”

CASABLANCA, Morocco – From the Arab Gulf states to northern Africa, Israel is trying to sew up the normalization pacts it signed nearly two years ago by sharing its pioneering answers to drought, desertification and fossil-fuel replacement.

That’s what brought Orit Farkash-Hacohen, Israel’s minister of innovation, science and technology, to Morocco this week with a cohort of startup companies focused on addressing the region’s climate and energy nightmares.

“I’m here to say that Israel’s innovation, talent, our people and our minds can and should be a partner,” Farkash-Hacohen told an Israel-Moroccan business conference in Casablanca on Wednesday. “We are committed for this cooperation to succeed.” The conference was sponsored by Start-Up Nation Central, a nonprofit group that promotes Israeli technology companies.

The Israeli cabinet minister, a member of the Blue & White party in Prime Minister Naftali Bennett’s governing coalition, is scheduled to be in the capital city of Rabat on Thursday to sign a memorandum of understanding with her Moroccan counterpart, Abdellatif Miraoui, minister of higher education, scientific research and innovation. The broad agreement will cover cooperative efforts in agricultural technologies, water management, water desalination, renewable energy and artificial intelligence, Farkash-Hacohen said.

Her visit to Morocco follows a similar trip to the United Arab Emirates in October 2021 that covered joint activities in the realms of climate and energy, but also focused on cooperation between the two countries on space exploration, including Israel’s Beresheet 2 unmanned lunar landing mission.

“I hope this will echo a more moderate voice in the Middle East and in Africa,” Farkash-Hacohen told The Circuit in a brief interview on the sidelines of the conference. “We are facing a lot of extremists in our neighborhood. This is an alliance of the moderate countries.”

The 51-year-old minister, former chairwoman of the Israel Electric Authority, a regulatory body, and previously minister of strategic affairs, acknowledged that much of Israel’s new business ties with Arab countries follow years of defense cooperation.

“It’s no secret that a lot of the Israeli high-tech industry’s success stems from the army and the technology assets that we have,” Farkash-Hacohen said in the interview. “Our security industries have produced a lot of great ideas that transfer to commercial industry. We see that in space and telecommunications. We see that in cyber. I think that now we should share that expertise with our friends.”

Moroccan officials agreed that Israel’s technological prowess is attractive to them. Three cabinet ministers attended the first day of the Casablanca conference; Morocco’s former energy minister, Amina Benkhadra, said the two countries should make good partners.“We are facing the same challenges of desertification, water security and climate change impact,” said Benkhadra, now director of the National Office of Hydrocarbons and Mines. “We are aware that Israel has a lot of capabilities in many sectors so I think this partnership can be very fruitful,” she told The Circuit, adding, “You have to seize opportunities in this world of crisis.”

The Circuit attended the conference as a guest of Start-Up Nation Central.

Trade between the United Arab Emirates and Israel is expected to reach $5 billion in the “upcoming few years,” Emirati Minister of State for Foreign Trade Thani Ahmed Al Zeyoudi predicted at the 2022 Davos World Economic Forum.

Al Zeyoudi detailed the economic benefit from the Abraham Accords at a Davos session titled “The Future of the Abraham Accords” alongside co-panelists Dorit Dor, the chief product and technology officer at Check Point Software Technologies Ltd; Stuart Eizenstat, the State Department’s special adviser on Holocaust issues and partner at Covington & Burling law firm, who currently serves as the State Department’s Special Advisor on Holocaust Issues; and Khalid Bin Ahmed Al Khalifa, an advisor to Bahraini King Hamad bin Isa Al Khalifa.

Less than two years since the signing of the historic normalization agreements, the trade volume between Israel and the UAE has eclipsed $2.5 billion, leading Al Zeyoudi to forecast that bilateral trade between Israel and the UAE will exceed $2 billion this  year and that 1,000 Israeli companies will operate in his country by year’s end.

Al Zeyoudi also noted both countries share common challenges — water scarcity, agriculture, and energy diversification — and referenced past areas of cooperation, including the creation of a water research institute, Israel’s sale to the UAE of stakes in its Tamar gas field and the two countries’ collaboration on launching the Beresheet 2 space mission.

The panel also touched on long-standing obstacles in the Middle East, including the Israeli-Palestinian conflict, tensions between Saudi Arabia and Iran and relations between the Gulf states and Turkey.

Al Khalifa reiterated that his country remains committed to the Arab Peace Initiative, a proposal to resolve the Israeli-Palestinian conflict, and claimed the 2002 document was a tacit acknowledgement of Israel’s legitimacy by the Arab world.

“It’s a de facto acceptance by every Arab country of the State of Israel in the region,” he said.

Sounding a note of optimism, Eizenstat expressed confidence that Israel’s relationship with Abraham Accords countries could deepen, and proposed the U.S. create “Qualified Industrial Zones,” regions in which the U.S. allows free trade on products manufactured with Israeli help, in Abraham Accords countries. 

“As much as we’ve had remarkable change for the good in a little over a year, there is room for enormous expansion if we do the right things and we continue down this path,” Eizenstat said.

Asked about the possibility of promoting peace between other Middle Eastern countries, Al Khalifa stressed the importance of patience, but said, “We will need to work harder and harder and harder to make that go at a faster pace.”

CASABLANCA, Morocco – A planeload of Israeli executives who landed here this week drew government ministers, corporate leaders and a senior royal adviser seeking their advice on developing a startup business culture.

The Israelis, representing technology companies largely involved in agriculture, water conservation, health systems and sustainable energy, are spending three days at a conference in the North African kingdom, mixing with potential Moroccan investors and looking to make deals.

“Our goal is to build a startup ecosystem,” Morocco’s minister for digital transformation, Ghita Mezzour, told The Circuit after addressing the conference’s opening session on Monday. “We’re looking at Israel’s expertise in how to build the components and how to make them interact.”

Also greeting some 150 executives and government officials from the two countries in the Sofitel Casablanca ballroom were Moroccan Transportation Minister Mohammed Abdeljalil, Commerce and Industry Minister Ryad Mezzour, and Andre Azoulay, a longtime adviser to King Mohammed VI and his father, King Hassan II. Azoulay is often described as the country’s most influential Jewish citizen.

Israeli President Isaac Herzog sent a recorded video address hailing the diplomatic ties between the two countries that emerged from the U.S.-brokered Abraham Accords in September 2020. He said he hoped business cooperation will “promote progress and peace throughout the Middle East, Africa and beyond.”

The conference, billed as the “Morocco-Israel Connect to Innovate Forum” was organized by Start-Up Nation Central, a nonprofit group based in Tel Aviv that promotes Israeli business through what it describes as technology diplomacy. The group’s CEO, Avi Hasson, the Israeli government’s former chief scientist, said he hopes Morocco can serve as a beachhead for Israeli companies seeking to do business throughout Africa.

“We believe that Morocco, under the leadership of His Majesty Mohammed VI, is uniquely suited to partner with Israel in blazing a trail to a new MENA [Middle East and North Africa] region, one that is connected by a genuine desire for peace and prosperity,” Hasson said.

The conference ends on Wednesday with Israel’s science, technology and innovation minister, Orit Farkash-Hacohen, scheduled to deliver an address. At least 13 Israeli-Moroccan memorandums of understanding between business and government entities are being signed at the gathering. 

Among the agreements, Israel’s Watergen, whose technology extracts water from air, signed a distribution deal with Morocco’s Waman Solutions. Israel’s Mehadrin formed a partnership with Adolam under the name “Global Farming Morocco” to grow and export avocados, and Israel’s Alma Lasers signed with Casablanca-based Guess Clinic to bring Alma’s aesthetic surgery devices to the Moroccan market.

Azoulay said it was critical that normalization with Arab countries be extended to include the Palestinians and bring “serenity” to the region. He said his remarks reflect popular consensus in Morocco that peace with Israel lead to an overall solution for the Israeli-Palestinian conflict. The May 11 death of Al Jazeera reporter Shireen Abu Akleh in the course of a firefight between Israeli soldiers and Palestinian gunmen in the West Bank city of Jenin has heightened tensions across the Arab world and led to increased security for the Israeli-Moroccan conference.

Israel and Morocco maintained low-key business and diplomatic ties until agreeing to normalize their relations under the Abraham Accords in December 2020, partly due to the many Israelis who come from Moroccan descent and are estimated to number close to 1 million. Israeli Foreign Minister Yair Lapid visited the Moroccan capital of Rabat to open a diplomatic office last August and Moroccan Foreign Minister Nasser Bourista came to Israel for the Negev Summit in March that brought together the top diplomatic officials who were party to the Abraham Accords with U.S. Secretary of State Tony Blinken.

The Circuit was invited to the conference as a guest of Start-Up Nation Central.

Venture capitalist Elie Wurtman looks to the Gulf Arab states as a potential savior for Israeli tech startups that can’t find enough qualified engineers to hire. First, though, they’ve got to weather the global market crisis that threatens to dry up funding.

“I don’t think it’s doomsday across the board, but companies that require substantial capital may be challenged,” Wurtman, the American-born co-founder and managing partner of Jerusalem-based Pico Venture Partners, said in an interview with The Circuit. “This is a good time to be more prudent with expense management.”

As the Nasdaq Composite stock index has plunged almost 30 percent this year, many of Israel’s biggest tech companies trading on the technology-heavy New York exchange have seen their market values sink. In turn, investors in the country’s more than 6,000 startup companies, which range from anti-hacker cybersecurity firms to telehealth services for pet cats and dogs, are cutting back.

That means a rough period is in store for the country’s high-flying tech culture, which has inflated both salaries and housing prices, said Alex Zabezhinsky, chief economist at Israel’s Meitav Investment House. “The slowing economy and rising interest rates, especially after such big valuations in the past, will surely bring worse times for technology companies and make it harder to raise money,” he said.

Wurtman, 52, whose interests include Vroom, an online platform for selling used cars in the U.S. that trades on the Nasdaq, says his ups and downs over three decades in venture financing have given him tools to coach PICO’s nearly two dozen startups. “Most of these companies will be able to get through it,” he said.

Vroom, whose market capitalization rocketed to $5.5 billion shortly after its March 2020 initial public offering, sank to a value of $200 million last week, trading at $1.45 a share. In June 2020, Nasdaq-traded cloud services company NetApp bought Spot.io, another PICO-funded start-up, for $450 million.

Among his projects today, Wurtman is looking at Israel’s deepening ties in the Gulf to help solve the chronic shortage of software developers and computer engineers that plagues the burgeoning tech industry in the small country of 9.5 million.

Pro-business policies in Bahrain and the United Arab Emirates, including tax-free income and liberal visa policies to fuel their expat-driven, oil-pumping economies, should draw Israeli companies to set up remote operations in the two small countries that normalized ties with the Jewish state through the Abraham Accords in 2020, he said. Rather than trying to navigate the tricky labor and social environment for foreign workers in Israel, companies can use their talents while they live in Dubai.

A report released in April 2021 by the Israel Innovation Authority and Start-Up Nation Central found that 60% of Israeli startups were having trouble recruiting for their research and development teams. The Israeli government has announced plans to give out more visas to foreigners who seek to work in tech. Programs have cropped up across the country to train Arab Israelis and Haredi Orthodox Jews in coding and other technology-related skills.

“What does the Gulf represent to me? It represents a very immigration-friendly environment, local subsidies, good infrastructure. You get a work visa if you’re going to be a productive member of society. You can come live there and work there, tax-free,” Wurtman said.

“Within several years, you’ll have dozens, or even hundreds of Israeli companies with satellite development offices in the Gulf,” Wurtman said.

The ability of companies to manage their workforces across national borders was underlined this week when Google moved most of its Russian employees out of the country, according  to The Wall Street Journal. As the Ukraine war grinds on, most of Google’s employees in Russia chose to work for the company abroad, the Journal said, adding that many have moved to Google’s hub in Dubai.

Another solution proposed to fill Israel’s tech needs is hiring talent in Africa. Iyinoluwa Aboyeji, a Nigerian general partner at the venture capital firm Future Africa, founded a startup called Andela, which teaches tech skills that help Africans get jobs around the world. Aboyeji told The Circuit in March that he wants the company to be used as a pipeline for Israeli companies.

These days, Wurtman says his passion is the firm’s 10-year-old PICO Kids initiative that seeks to bolster science, math and entrepreneurial skills among students in Jerusalem schools. Last year, the program flew a select group of those young people for a week of touring and study in Dubai, where they spent time with Emirati youngsters and worked together on projects addressing the issue of water scarcity.

“Bringing the kids together in Dubai was obviously magical in the sense that there was hesitation, especially on the other side, but I would say also here [in Israel] as well,” Wurtman said.

“The thing I always hear from kids that go to these programs is understanding that in spite of where we live… we’re actually very similar and we have a lot in common,” he said. “And that together we can come up with interesting solutions that can benefit people across the region.”

A first-of-its-kind multifaith gathering that took place last week in Saudi Arabia and openly included a delegation of Jewish religious leaders was an extremely positive step, one of the participating rabbis told Jewish Insider, but should not be seen as a sign that the kingdom will soon enter into any sort of normalization agreement with Israel.

The two-day Forum on Common Values among Religious Followers kicked off in Riyadh last Wednesday – the day a Palestinian-American journalist was shot dead during clashes between Israeli forces and Palestinian militants. Hosted by the Muslim World League, the event also included leadership from the Catholic Church, Orthodox Ecumenical Patriarchate, evangelical Christianity, Hinduism and Buddhism, as well as religious leaders from other countries across the Muslim world.

Rabbi David Rosen, the director of international interreligious relations at the American Jewish Committee, who was the only rabbi from Israel in attendance, called the meeting “historic,” saying it was a significant milestone for a country that portrays itself as the bedrock of Islam.

However, he also told JI that the unprecedented gathering in the heart of the Muslim world was more about changes taking place internally in Saudi Arabia — rather than about the diplomatic process taking place in the region that was sparked by the signing of a normalization agreement between Israel, the United Arab Emirates and Bahrain in September 2020. Morocco and Sudan inked their own agreements with the Jewish state in the following months.

“What they are doing is for itself and its own future,” said Rosen, who has been involved in interfaith relations for decades and has visited Saudi Arabia in the past. The Saudi leadership, he added, “would love to have a normal relationship with Israel, but unless there is movement on the Palestinian front or at least a show towards a solution, there is no chance of them joining.”

Tensions between Israelis and Palestinians reached a new high last week after Shireen Abu Akleh, a veteran Al Jazeera journalist, was killed while reporting for the channel in the Palestinian city of Jenin. The Palestinian Authority and the channel have blamed Israel for Abu Akleh’s death. Israel has expressed sorrow at her death but also cast doubt on its culpability and called for an investigation into the incident. 

However, images of Israeli police attacking mourners as Abu Akleh was laid to rest on Friday afternoon also sparked anger and drew worldwide condemnation from governments, including the U.S. administration.

In Saudi Arabia, however, Rosen said the conference was “a transformation” in terms of Muslim-Jewish relations, adding that such a gathering in the kingdom would have been “unimaginable in the past.”

“That such a multifaith conference was hosted by Saudi Arabia, which has seen itself as a kind of Muslim Vatican and which until recently viewed any presence of other religions to be undesirable, is truly a sign of new times,” Rosen said. 

He added, “the fact that the Muslim World League, the traditional tool for exporting exclusive extremist Wahabi ideology, was the organizer of this multifaith gathering, shows how dramatically things have changed.”

He said that the delegation of Jewish faith leaders, which included liberal and Orthodox Jewish streams from the United States and Europe, was well-received, with the Muslim World League taking extra steps to ensure they had access to kosher food. The food, he said, was provided by Rabbi Jacob Herzog, who touts himself as the chief rabbi of the Kingdom Saudi Arabia and provides religious services to Jewish tourists and those there on business.  

Also present at the conference, said Rosen, were three U.S. ambassadors for religious freedom, including the current one, Rashad Hussein, who called on all religious leaders to take steps to combat the rise of antisemitism. Hussein, added Rosen, also referred to a visit made by Muslim World League’s Secretary-General Dr. Mohammad Al-Issa to Auschwitz two years ago.

Overall, Rosen said there was “a very strong sense articulated widely at the conference that this was a major breakthrough of enormous consequence for Saudi Arabia, the Muslim world and consequentially globally.”

“The atmosphere at this event had the character of a momentous celebration, which was far more important than the content of the speeches,” he noted, adding that the pluralistic sentiment of the final declaration, which called on spiritual leaders to leverage common principles and work to advance tolerance and peace, was remarkable precisely because it was issued from Saudi Arabia.