Geopolitics and millions of dollars behind the Israel-UAE agreement
Since the United Arab Emirates (UAE) and Israel normalised their relations on August 13, they have announced a long list of agreements in the economic, health and security fields that is growing almost daily and could generate an annual trade exchange of $4 billion.
What used to be a relationship of enmity, at least from the outside, has now become a constant exchange of calls between Israeli ministers and emirates, who have already sealed a wide variety of agreements and promised to strengthen cooperation in all sectors.
The Emirates has not concealed its political ambition behind this historic agreement. Deputy Foreign Minister Anwar Gargash said openly after the signing that the agreement aims to help his country maintain its influence and become a stronger regional and global player in the troubled Middle East region, which is also full of opportunities in energy, investment and trade.
On September 23, the UAE and Israeli energy ministers held a telephone conversation to explore how to strengthen their cooperation in the oil and gas sector, as well as in "green energy and advanced technology in energy-related cybersecurity", reported the Emirate's WAM agency.
Energy imports and exports with Israel have been a "taboo" subject in Arab countries, which was broken by Egypt when it announced that it now imports gas from the Israeli Leviathan field, Ben Cahill, a researcher with the Energy Security Programme of the Centre for Strategic and International Studies (CSIS), told EFE.
Now, following the signing of the agreement, the Emirates has "probably more freedom to establish trade relations in energy".
"Israel will not be a key oil export market for the Emirates, but there may be some potential renewable energy partnership," says Cahill.
Indeed, potential cooperation in agricultural technology has been the focus of attention since the agreement was signed. The Emirates is in a desert environment and is dependent on desalination for drinking water, something in which the Israeli experience can be of help.
One of the central issues on the agenda of the Emirates' authorities is food security in a country with such an unfavourable climate. The Emirati government has promoted the National Food Security Strategy 2051, which focuses on finding partners who can provide expertise in agricultural technology.
One of the most prominent announcements the Emirates has made in terms of investment is with Dubai-based logistics company DP World, which signed an agreement with Israeli bank Leumi to cooperate and improve trade in Israel and promote a flow of trade throughout the region.
The company said in a statement it is partnering with an Israeli company to manage one of Israel's two main ports, Haifa or Ashdod, at a time when the Jewish state is betting on privatisation.
The analysts argue that if DP World succeeds in managing one or both ports, it would affect the influence of one of the main maritime routes between Europe and the East: the Egyptian Suez Canal.
For analyst Thaddeus Best of Moody's Investors Service, "from a macroeconomic perspective, the sectors to be covered have not yet been given much visibility.
The analyst told EFE that the Israeli government has estimated that investment from the United Arab Emirates could represent some 350 million dollars in the internal flow of direct foreign investment (FDI), 2% of the total.
In its latest report, Moody's rated the Emirates as stable Aa2, but with negative credit pressure. The prestigious consulting firm has not yet made any significant revisions to its 2020 forecasts for the UAE's sectors, but a Moody's analyst says it is "cautiously positive in terms of the impact on those sectors in the Emirates".