What’s Behind the New Israel-UAE Treaty Peace?
Both the UAE and Israel are heading to reinforce the normalization steps between them by strengthening partnerships in numerous areas and raising the ceiling of trade exchange between the two parties to reach almost $ 4 billion annually.
“Within three to five years, the volume of trade between Israel and the UAE will reach four billion dollars,” Israeli Intelligence Minister Eli Cohen told the Israeli Radio Reshet Beit. A representative for Cohen, a former economy minister, said the figure he cited for yearly trade included trade in defense equipment.
Emirate and Israeli banks have entered into partnership talks, and a delegation of Israeli central banks had papered to visit the UAE in days to agree on financial projects and activities that will result in the establishment of joint banks, opening branches of Israeli banks in Abu Dhabi, and accomplishing financial investment projects and deals.
The source acquainted with the initial route of the scheduled visit indicated that the UAE anticipated placing the ultimate touches on the trip after announcing a date for the related ceremony, during which the leaders of both countries will sign the normalization agreement; this was the primary announced visit to Israel by official Emirates delegation.
The Israeli airline, Israir, affirmed that they had booked places for commercial flights from Tel Aviv to the UAE in preparation for the possibility of starting the tourism movement as the two countries proceeded towards the normalization of the relations.
Aircraft between the UAE and Israel flying in Saudi airspace significantly reduces the number of travel hours after the Kingdom announced that all flights to and from the UAE would cross Saudi airspace.
The Positive Effects of the Israeli-UAE Treaty
The so-called soft power delivers the ability to influence and achieve the desired results between nations, and there is no doubt that economic power is one of the soft power tools. Therefore, the agreement would support the Emirate influence on the world in various social, humanitarian, and economic aspects, pointing out that the planet’s impact is no longer in the hands of states. Only the big, the advanced, and smart countries have their say.
As soon as the two parties announced the normalization deal, the statement indicated that delegations from the Israeli and Emirates companies had already signed bilateral agreements related to the sectors of real estate investment, tourism, aviation, security, communications, technology, energy, health care, cultural, environmental, and establishment of reciprocal embassies.
The peace treaty between the Emirate and Israel will also create a competitive, reciprocal investment environment in the world, given the two countries possessing economic potentials among the first in the region.
The backgrounds of this critical occasion are numerous, and foremost of which is that it not only opens the doors for the second-largest middle eastern economy with domestic production of quite $ 400 billion but moreover the doors of the Saudi economy as the first Arab economy with domestic production of about $ 780 billion. It also opens the markets of other Gulf Cooperation Council countries whose mutual trade relations and facilities are broadly intertwined with other Arab nations’ markets.
The UAE and the Gulf countries have much money that goes to consumption, trade, tourism, real estate, and the purchase of high-end security, military and civil technologies in the first place, and the value of the high technologies needed for Arab markets, which are mainly imported from abroad, are hundreds of billions of dollars annually.
Another and the most critical investment between the two countries at present will be in cooperation to produce a vaccine for the Coronavirus, which is a step that can put this participation on the list of developed countries if positive results are reached, which will contribute to enhancing the ability of the two countries to develop collaboration in the medical fields in the future.
The Effects of the Israeli-UAE Agreement on Dubai’s Real Estate Market
The UAE is one of the first countries globally in the growth of small and medium enterprises, while Israel is ranked first in information technology, which will constitute a growing investment case between both countries over the coming years.
Dubai’s property market will be the most outstanding recipient of the arrangement, as the new investment stream is relied upon to help absorb the overflow real estate stock. Likewise, both the UAE and Israel share their technical mastery of the sector, fortifying Dubai’s real estate.
The Israelis also hope for Emirate’s investments in the real estate, technology, and tourism sectors, especially since more than 4 million Israelis travel overseas annually to spend their holidays. On the other hand, the Emiratis hope to sell their oil on the Israeli market and gain new knowledge on the Internet and innovations.
The treaty will have economic benefits for both Emirate and Israel on the commercial level, as Israel could be a gateway to increase Emirate’s exports to many western markets; also, the UAE could be the gateway for the Israeli product to many Asian and regional markets.
Besides the deep relations, The UAE is home to thousands of investors who own thousands of properties and have invested heavily in its infrastructure.
Israeli diamond emperor Benny Steinmetz has made most of his diamond trades in Dubai. Steinmetz is known as a South African De Beer Group partner, a group controlled by a Jewish family and recognized as the largest distributor of diamonds globally. In 2008, the “Steinmetz Group” signed a contract with DP World to establish many hotels and real estate projects in Montenegro. For Steinmetz, his Business in Dubai is not limited to the diamond trade and extends to a partnership with the UAE’s crown jewel.
The Emirati media estimate the number of investors expatriates in the tens of thousands, while authorities state that the number is close to a half-million, and around 350,000 investors visit the UAE annually.
The Emirate is expected to have under 70,000 additional residential units till 2021 to help settle the real estate market and draw enormous investment from Israeli investors and financial specialists.
Israelis’ Interest in UAE Real Estate Market:
This agreement between both countries will be beneficial as the three primary and powerful economic sectors in Dubai, namely, real estate, tourism, and the capital market, have been in crisis for a long time. One of the indirect advantages of the travel industry and tourism could be on the UAE real estate. Israeli property investors and financial specialists could open up another potential market that designers and real estate businesses could hope to use.
Emirati investors have checked out beachside properties and new improvements in Tel Aviv just as private homes in Herzliya Pituach – a suburb north of Tel Aviv on the ocean, including mostly dachas – though Tel Aviv is generally apartments.
While there has been an ascent of enthusiasm from Israeli investors hoping to invest in the UAE real estate market, It’ll be a great deal of investment originating from Israel as the property costs are more cost-effective in Emirate contrasted with Israel.
After all, this is an ideal opportunity to invest in the UAE property market, and numerous Israelis would surely be keen on such an investment opportunity.
With the finalization of the peace treaty between the UAE and Israel, investors have begun to show enthusiasm in Dubai’s property market. Individuals and organizations are willing to take a position and invest in Dubai real estate once the two nations consummate details of building up diplomatic relations.
The other successes include dealings on opening government offices and exchanges that will profit the Dubai property market and pulling in more significant investment from an undiscovered market in the district.
Al-Mutairi says that 64% of the Israeli economy depends on services, such as real estate management, hotels and tourism, public relations companies, and advisory and security services.
He explained that the peace treaty expands the doors of cooperation in both sides’ interests, as the UAE will be more powerful and able to fortify its food security through cooperation in agricultural technology and other advanced industrial fields on the Israeli side.
The real estate sector assumes a significant part in the UAE’s economy, mainly in Dubai. Other emirates, especially the capital Abu Dhabi, have indicated significant steps in developing and expanding their local property market in the previous years.
It is still the beginning, but the UAE’s economic and financial advantages in investment, the travel industry and tourism, security and telecommunications, and especially real estate could be wide-reaching.
This is a significant activity and will profit the UAE economy and Dubai property market specifically. The strategic move will help carry greater interest into the UAE economy, and the real estate investment and property sector will be a significant recipient of it.
In the end, the investment exchange in the tourism sectors, trade exchanges, and especially real estate would achieve a massive investment boom that would benefit the two countries.