A new era of travel in the Middle East begins as passengers walk through Tel Aviv’s airport.
With a 2020 landmark agreement, the UAE and Israel stand on the precipice of a new generation of collaboration and diplomatic relationships. The Abraham Accords has normalized relations between the two Middle East countries, another step in the region's quest for neighboring peace, but beyond the political veil, government entities and private businesses on both sides are finding themselves with new, lucrative opportunities.
UAE's New Tourism Clientele
With open borders and travel now accessible between the two countries, businesses operating in hospitality and tourism are being offered fresh new markets to service. UAE carriers Etihad and FlyDubai, as well as Isreal's EL AL, provide non-stop flights between both countries, with Emirates to follow. Visa-free access between both countries is set to resume after COVID-19 precautions are lifted, making the three-hour flight a highly tempting option for last-minute getaway plans. Armani/Kaf, the first kosher-certified restaurant in the UAE, opened its doors inside the Burj Khalifa to cater to Israelies following traditional dietary guidelines. With around 10% of local jobs centered around the travel and tourism industry, UAE stakeholders are looking at new ways to support this unique new influx of tourists.
The Lure for Bilateral Investments
As a leader in the region for both local and foreign investors, the UAE is poised to facilitate significant opportunities with Israeli entrepreneurs seeking to expand into the Middle East market. With its highly prized tax governance strategy, the UAE has long since been an attractive destination for investors, particularly for business setup in Dubai. Conversely, opening the market in Israel allows UAE investors potential diversification opportunities into leading Israeli industries, including technology, healthcare, and clean energy initiatives.
Israel's Sophisticated Tech Workforce
Isreal has firmly branded itself as a hub for innovative technology. The country's business startup trend is off the charts, with one of the highest startup numbers per capita worldwide. The incubation culture of this "Startup Nation" has facilitated the growth of thousands of companies making the Israeli market an attractive home to entrepreneurs worldwide. Major tech multi-nationals operate strategic regional offices from Tel Aviv, further encouraging a modern, highly skilled workforce. For UAE investors, tapping into this market of savvy human capital can lead to substantial opportunities for new businesses, as well as partnerships in existing projects that add a leading edge in strategic innovation.
Green Technology Exports
The UAE leadership is committed to a clean, eco-friendly future that reduces dependence on oil-based income. The Green Economy for Sustainable Development initiative seeks to make the UAE a global leader in the export of green technology, a space that Israel knows well. In 1960, Israeli engineer Simcha Blass invented the concept of drip irrigation, maximizing water efficiency in agriculture. Widely used in the country's desert landscape, the innovative technology was later sold abroad, pioneering Israel's green tech export history. Today, Israeli companies partner with venture capitalists in California's Silicon Valley to produce sophisticated solutions to the world's most critical environmental issues, including clean water supply in developing nations. Backed by the UAE government, the Green Economy for Sustainable Development will support initiatives around green transport, energy, and agriculture. With Israel's position as green tech leaders, opportunities to support local initiatives will create increased partnerships and collaborations between the two countries.
What initially seemed like an unlikely partnership between two countries has now blossomed into a wealth of political, economic, and financial opportunities. A commercial haven for foreign stakeholders, business setup in Dubai will likely see a healthy boost, while UAE companies and investors turn a keen eye towards a market once completely out of grasp. While 2020 was a year of many unprecedented events, the Abraham Accords offered a strong indication of a region steadfast in its commitment forward.