Key Takeaway: The signing of the Abraham Accords on September 15, 2020, signifies the normalization of relations between the United Arab Emirates (UAE) and Israel that, according to UAE Minister of Economy Abdulla bin Touq Al Mari will pave the way for economic cooperation between the two countries and in turn drive economic growth across the Middle East.
Speaking at an Atlantic Council event on September 16 with Atlantic Council empowerME Director Amjad Ahmad, Al Mari discussed how the historic signing of the Abraham Accords will facilitate the United Arab Emirates and Israel to open their economies and allow the flow of “goods, services and investment” across their borders.
Al Mari elaborated upon the economic benefits of the accords, the economic impact the UAE hopes to have on the region, and the UAE’s post COVID-19 economic plan. Below is a summary of his key points.
Key economic benefits of the Abraham Accords for the UAE:
- Both nations will benefit: According to Al Mari, the two “economic power houses” [the UAE and Israel] are well aligned and can learn from each other. Together, they will exchange expertise to seek COVID-19 treatments and cures, reliable food and water sources as well as increase standards of living across the region and grow entrepreneurship and investment. Al Mari stated: “When opportunity is knocking, we won’t stop at the door.”
- Energy sector cooperation: As countries across the Middle East are increasingly looking to diversify their energy through renewable sources, Al Mari argued that the cooperation between Israel and the UAE will bring huge advantages to clean energy – especially solar power – across the region and will work to provide it to“ the countries that really need it” at lower prices.
- Promoting economic growth across the region: Al Mari stated that the UAE, a strong trade, logistics, construction and tourism hub in the region, is looking to “complement” Israel rather than “compete” with it. Al Mari notes that the UAE is seeking to become a “scale up” nation that will serve as a gateway between the Middle East, North Africa, and Asia while promoting the flow of business, investment, talent and people.
- Projected economic impact: The Israeli Ministry of Economy estimates that the normalization of ties between Israel and the UAE could lead to as much as $500 million in bilateral trade and investment. Al Mari commented that the UAE is still calculating the deal’s projected impact but believes it may be worth “$300 to $500 million” in future business.
Impact of the Abraham Accords on the UAE’s other bilateral relations:
- The continued role of the United States: As a major trading partner and partner of both nations, the United States brokered the signing of the Abraham Accords. When asked about the continued role of the United States, Al Mari noted that US companies have a unique perspective on the economic landscapes of both the UAE and Israel and thus can provide advice on how both nations can benefit and “how the two places can bridge” their economies.
- What about Palestine? Palestinian leaders have criticized the normalization of relations between the UAE and Israel. However, from an economic perspective, Al Mari claimed that both sides agree the deal will “bring economic benefits for Palestinians.” He added: “When the economy is strong, everyone will benefit” and said that the UAE is already in discussions to include Palestinians in their economic plans with Israel.
- Will the UAE normalize relations with Qatar? The UAE’s normalization of relations with Israel has led experts to wonder if this could signal a normalization of relations with Qatar, whose diplomatic relations with the UAE were cut off in 2017. Al Mari noted that the UAE has always had a “mission of peace,” it is always welcoming, and will continue to extend these values into the future.
The UAE’s Post Covid-19 Economic Plan and key economic initiatives:
- Avoiding a second lockdown: Al Mari stressed that the world is still very much tackling the global pandemic and while the economy was shut down initially, it “cannot tolerate a second lockdown.” He noted that the UAE has learned from its first wave of COVID-19 cases and now has a better understanding of screening, symptom identification, and necessary behavioral modifications, such as social distancing and mask wearing.
- What COVID-19 has taught the UAE: The UAE has been planning to re-design and transform its economy to improve the economic mix, emphasizing the role of business, investment and technology. Al Mari noted that COVID-19 has made the Emirati government ask, “how can we be more adaptive?” and “how can we change and adapt faster in the future?” In the next few months, Al Mari plans to help make the future Emirati economy more adaptive and agile in order to help it integrate further internationally and look for additional partners.
- Post COVID-19 economic recovery plan: The Emirati government announced a two-phase post COVID-19 economic recovery plan in May. According to Al Mari, while the pandemic is not over, the UAE plans to continue to provide infrastructure upgrades and monetary support. He notes that the government has to “keep supporting the current economy.” In the post COVID-19 world, Al Mari indicated that the UAE will need to focus on investing in technology and reducing tariffs to increase trade. He emphasized investment in R&D to power the economy into the future.
- Regional economic integration and further opening to expats: As a “gateway to the region,” Al Mari described how the UAE is looking to diversify the economy and integrate its innovations with the “Middle East, North Africa, Asia and South Asia,” despite Covid-19’s disruption of global trade. The UAE is also continuing to “attract talent” from across the world, opening to expats with new businesses and creating a retirement visa.
- Empowering women in the economy: The UAE is working to increase the representation of women in the government and the economy. In June of 2019, President Sheikh Khalifa bin Zayed Al Nahyan issued a presidential resolution, raising women’s representation in the Federal National Council to 50 per cent. Al Mari discussed how he recently signed an agreement with Aurora50, an organization training women to take board positions in the UAE’s private sector. Al Mari hopes that such programs well help increase women’s representation in the private sector to a “50-50” split.
- Expanding venture capital: Al Mari is working to expand venture capital and private equity in the UAE. He created a team to analyze the future economy, looking to see “what’s out there?” and how the UAE can benefit. He noted that “the conventional economic sector may not exist 10 years down the line” and wants to discover “what will exist?”
Lucy Grathwohl is an intern with the Atlantic Council’s Rafik Hariri Center for the Middle East and Middle East Initiatives.
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