Emirati rush towards economic partnership with Israel
As part of Abu Dhabi’s drive towards an economic partnership with Israel, the later announced that it made a deal with the UAE to form a joint committee for cooperation in terms of financial services with the aim of encouraging investment between the two countries within the normalization agreement.
In a press release, the Israeli Prime Minister Benjamin Netanyahu said that Israeli and Emirati officials, who had a meeting in Abu Dhabi, had signed the agreement.
Netanyahu added that one focus will be on “cooperation in the field of financial services and removing financial barriers for making investments between the countries, as well as promoting joint investments in the capital markets.” The two countries will also cooperate in banking services and payment regulations, he added.
Israeli officials were quick to show the economic benefits of the deal, which, once formalized, will include sectors such as tourism, technology, energy, health care and security, among others.
A number of Israeli and Emirati companies have already signed agreements immediately after the announcement of the agreement of normalization.
The Emirati oil is being prepared to be used inside the occupied territories through the Eilat-Ashkelon pipelines Company before it reaches its buyers in the Mediterranean and refined in two Israeli oil refineries with a capacity of 300,000 barrels per day.
On a daily basis, Israel produces 5,977 barrels of oil, while it consumes 236,249 barrels, which means that it imports 92% of its consumption, mostly from Russia and Azerbaijan.
Therefore, it is expected that the strategic alternative for Israel is the UAE, which produces three million barrels per day, of which it exports two million barrels.
It is clear that the UAE, which was the first Gulf country to normalize its relations with Israel, wants to benefit from Israel’s anti-missile technology against any possible Iranian attack on its oil installations. The UAE also aims to cooperate with Tel Aviv in the field of renewable energy.
A bank document showed that the Emirate of Dubai has assigned banks to arrange contacts with investors, before offering bonds and financial instruments in dollar for 10 and 30 years.
The document indicated, according to Reuters, that the expected borrowing comes as part of a program to issue $6 billion in financial instruments and $5 billion in bonds. In March 2019, debt-ridden Dubai renewed a five-year $10 billion loan with the UAE Central Bank, while in 2018 it had received $10 billion in loans from Abu Dhabi for five years as well.
The emirate of Dubai is suffering from more severe repercussions compared to the other six emirates, in light of the Coronavirus pandemic that has hit the tourism sector which is vital for the emirate, as well as the real estate, trade and banking sectors.
The Japanese financial group Mitsubishi UFJ said recently that Dubai’s economy is expected to contract by 5.2% this year due to the impact of the Coronavirus, but it may witness a rebound in growth to record 4.3% next year.
The bank added in a report that while the vital economic sectors in the emirate were hit hard by the global health crisis, the indicators predict a return to normal economic activity.
