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From camel milk cosmetics to AI: Israelis jump at UAE and Bahrain opportunities

Even before Israel and two Gulf monarchies signed their landmark agreements to normalize relations, Israeli businesses and institutions started breaking into the UAE’s newly opened market.

The Trump administration is hosting the signing of normalization agreements between Israel and two Gulf Arab states, Bahrain and the United Arab Emirates, on Tuesday, Sept. 15. But Israeli companies jumped the starting gun to lay the groundwork for business ties.

Bank Hapoalim and Emirates NDB, Israel and Dubai’s largest banks, announced Monday that they had signed a cooperation agreement, a major first step in enabling direct commerce. Israel’s big dogs — high tech firms, banks and defense contractors — have already flocked to Dubai and Abu Dhabi in recent weeks.

The UAE flag is posted in lights on the side of the city hall building in Tel Aviv

The UAE flag is posted in lights on the side of the city hall building in Tel Aviv Image by Getty Images

US President Donald Trump announced the forthcoming Israel-UAE agreement on Aug. 13, and 29 days later Bahrain said it would also establish diplomatic relations with Israel. Prime Minister Benjamin Netanyahu has touted these accords as “peace for peace,” but unlike Israel’s 1979 and 1994 peace agreements with Egypt and Jordan, the Jewish state was never at war with these Arab states.

Israel and the Gulf monarchies have enjoyed clandestine security, intelligence and business relations for years, nurtured by mutual distrust of Iran. Israeli defense contractors and cybersecurity firms have operated under the radar in the Gulf for years.

Israeli cybersecurity company NSO, whose Pegasus spyware is linked to human rights abuses against dissenters and journalists, is used extensively by operators in the UAE, Bahrain and Saudi Arabia, according to a 2018 CitizenLab report. Business paper Calcalist recently reported on Israeli UAV manufacturer Aeronautics Ltd. providing surveillance drones to the UAE.

The normalization deal is widely expected to turn that trickle of clandestine defense deals into a torrent.

“They need Israeli technologies. They need Israeli security cooperation. They don’t like to do it within this kind of limited formula that was enabled by secret relations,” said Haim Tomer, a former Mossad official who was involved in Israel’s clandestine ties with the Gulf from 2011-2014. “They’d like to get into the open, and I would say broaden their relations and get more of the fruits of security and more of the forces of strategical cooperation that this kind of alliance could bear.”

Not long after the agreement was announced in Washington last month, Israel-UAE institutions and companies rushed to sign cooperation agreements. The Weizmann Institute of Science signed the first academic agreement with the UAE’s Mohamed bin Zayed University of Artificial Intelligence on Monday, and earlier in the month the Israeli and the UAE governments signed preliminary banking and financial agreements to pave the way for economic cooperation.

Israel and the UAE have two of the largest per capita GDPs in the Middle East. Israel’s booming high tech sector and fertile start-up ecosystem could benefit greatly from the deep pockets of Emirati and Bahraini venture capital.

The hope of Emirati investments and consumers are luring a wide range of Israeli start-ups and businesses, such as Israeli camel milk cosmetics firm Cammellatte, that seek to expand their horizons.

“We’ve been eyeing to get into Dubai in the past,” said Cammellatte co-founder Mark Green. But the absence of formal relations between Israel and the UAE made it challenging. “Consumers there, they’re very familiar with camel milk itself.”

Viktoria and Mark Green of Cammellatte Cosmetics in Israel's Negev hope to expand their camel milk cosmetic business to the UAE.

Viktoria and Mark Green of Cammellatte Cosmetics in Israel’s Negev plan to expand their camel milk cosmetic business to the UAE.

In one of the more bizarre twists, Israeli media reported that a Dubai businessman is interested in investing in Beitar Jerusalem, a soccer team whose hardcore fanbase is notoriously ultranationalist and anti-Arab.

The UAE flag is posted in lights on the side of the city hall building in Tel Aviv

The UAE flag is posted in lights on the side of the city hall building in Tel Aviv Image by Getty Images

Several organizations aimed at cultivating grassroots connections between companies in Israel and the Gulf sprouted up in the past month. Robert Curtis, co-founder of the newly minted Israel-UAE Business Network, said that his network of more than 2,000 contacts in Israel and the UAE seeks to “enable grassroots business to take place, because we’ve already seen the major enterprises already start to have conversations.”

Smaller Israeli companies, from agricultural technology, sustainable energy and fintech firms to the camel milk cosmetics producer, are making the initial steps to delve into the UAE market and connect with investors through the network.

“There’s lots of interest and outreach and ideas and all sorts of people are coming out of the woodwork,” Curtis said. “This is the way we make peace, through business.”

Though currently hampered by travel restrictions imposed by the coronavirus outbreak, Israeli tourism to the Gulf is expected eventually to boom. In the immediate aftermath of the Israel-UAE announcement, Israeli media was saturated with dazzling TV reports about Dubai’s luxury hotels and high-end shopping beckoning Israeli tourists.

Visa agreements and direct flights are not yet finalized, but hours after the Israel-UAE agreement was announced a [Hebrew-language Facebook page(h titled “The United Arab Emirates for the Israeli traveler” was created. Since then it’s grown to nearly 4,500 members.

“There’s a ton of interest, even though there’s no chance at the moment to fly there because of coronavirus and visas,” said Tal Stern, one of the page’s administrators and manager of an Israeli travel website. “It’s a destination that is certainly going to be the Las Vegas of the region, with a bit fewer sins.”

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