The US administration froze the “Abraham Fund” for an indefinite period, the establishment of which was announced after the signing of the Avraham agreements in September 2020. This is what American and Israeli sources involved in the issue tell Globes. The fund was to be set up with the joint investment of the US administration, the Emirates and Israel with other countries that would join later.
● Almost a year after the Abrahamic Agreements: Business is booming, diplomacy a little less so
Biden turned off the tap
The fund will fulfill more than $ 3 billion to the private sector development investment market to promote economic cooperation and encourage prosperity in the Middle East and beyond. The partner countries are welcome to join other countries to To advance the goals. “
The fund was established and went into immediate action as early as October, and within three months examined hundreds of applications for funding for various projects. It has also approved more than a dozen of them in the fields of energy, podtech and fintech. In addition, the fund was approached by large financial institutions from the United States that sought to join the investment and increase the fund’s capital.
But Joe Biden’s election as president halted activity. At the end of January, after Biden was sworn in, fund manager Aryeh Lightstone, appointed by Trump, resigned, and the new administration did not bother to appoint another in his place and not in vain. Although the administration supports the Abrahamic agreements, even though they were signed in the Trump era, it is less enthusiastic about allocating them money from its budget. An investigation by the Israeli Foreign Ministry revealed that Washington had informed Jerusalem that the fund’s activities were being re-examined.
U.S. reports suggest that the reasons for the re-examination include the Biden administration’s huge spending to get out of the corona crisis. A parallel Israeli source confirms that in talks with the Americans, both during the previous government and in the current government, it was clarified that at this stage the fund’s activity is frozen and out of the question.
The statements are delayed
This freeze was one of the reasons for the establishment of the Emir’s Investment Fund in Israel, which was announced in March, but this fund is also faltering and delayed. Former Prime Minister Benjamin Netanyahu and the United Arab Emirates’ successor and ruler, Muhammad bin Zayed, have agreed on the new emirate fund. Netanyahu had hoped to reach a joint statement with Ben-Zayed on the foundation in Abu Dhabi before the Israeli election, but due to a diplomatic confrontation with Jordan, this did not succeed.
In March, Ben-Zayed issued an announcement for the establishment of another investment fund, of the United Arab Emirates in Israel, amounting to $ 10 billion. The establishment of the fund was then agreed with Netanyahu, and a statement said that it would be common to Israel and the Emirates, and would invest in the fields of energy, industry, infrastructure, space, health and more. The fund will focus on supporting projects that will promote economic well-being in both countries and the region as a whole. It was further stated that it will operate mainly in the private sector.
Almost four months have passed since then, during which there were elections in Israel, and the government was replaced. At that time almost nothing moved on the fund except a general dialogue between Foreign Ministry representatives and their counterparts in the Emirates, on ways to promote the fund’s activities, and refine diplomatic agreements to suit its activities.
On the Israeli side, the Ministries of Economy, Infrastructure, Energy and others are holding discussions and consultations on what projects to offer to the new investment fund. The hope here is that the agreements signed by Foreign Minister Lapid during his visit to the Emirates last week will provide the legal framework in Israel for the government’s investments in the Emirates through the fund. One or two of Israel’s economic ministers are expected to arrive in the Emirates soon, for a visit that will deal mainly with the fund and ways to implement it.
But in practice, the fund whose center is supposed to be in the Emirates has not yet been established, nor is it seen on the near horizon. In Abu Dhabi, meanwhile, the conduct of the new government and its capabilities to promote business and economic ties between the two countries are being examined. Among other things, they are waiting for developments in the tender for the port of Haifa, which the giant emirate company DP of the Ben Sulim family is bidding on, after joining the Israeli shipbuilding industry. And of course the issue of EPA on the table.
On the economic ties between the countries obscure emerging disputes with the new government as well as business diplomatic incidents. Last week we reported in Globes about the anger of businessmen from two of the wealthy families in the Emirates over Foreign Minister Lapid for canceling a meeting with them.
A business source tells Globes that Israel’s withdrawal from the EPA agreement with MED-RED Land Bridge Ltd. for the transportation of oil from the Persian Gulf region to Israel, while supplying it to various customers in the Mediterranean basin, will harm economic relations between the two countries and deter US companies. The successful implementation of the agreement, ie the passage of the first tankers through the port of Eilat to Ashdod without any malfunction or leakage, should allay Israeli concerns, and the potential for expanding the agreement is enormous.
In the new government, it will be recalled, there were voices demanding the cancellation of the agreement, among others by Minister of Environmental Protection Tamar Zandberg and other ministers and ministers. Foreign Minister Lapid told the Globes during a recent visit to the Emirates that the issue should be studied. “We do not want to harm the environment, we have a state to protect it and more disasters must not happen as in the past (the leak in the Evrona Reserve).” The issue was also discussed in the High Court and the state is supposed to give its answer to the petition on the issue.
A diplomatic source in the Emirates tells Globes that the issue was hardly discussed during the current visit, but it was clarified to Israel that the cancellation of the agreement could harm energy cooperation, which also extends to the gas sector, and investment opportunities from companies in Israel’s infrastructure projects. He added that the Emirates expects the new government to meet all the commitments of its predecessor, and the EPA is one of them.
One of the paradoxes in Israel’s diplomatic activity in the Emirates is the gap between the economic benefit it brings to the country and the conditions under which our diplomats operate. Israeli diplomatic-economic activity in the Emirates obscures major budgetary difficulties. For example, the consulate in Dubai, which is supposed to cover an entire floor in a large office and tourism building, currently rents only a few offices there. The ceremony of cutting the festive film, with the participation of Lapid and the Minister of Artificial Intelligence from the Emirates, also took place in a hall that was rented once for its existence.
Due to these difficulties, the activity is not extensive enough, nor does it reach its enormous potential. According to details that came to us, the consul’s office in Dubai Ilan Stolman is only partially furnished, and he was forced to sleep on a mattress on the floor as the budget for buying a bed for him has not yet been found. Even the staff of the embassy and consulate are not yet full, and the hands of those in charge of the administration are full of creative solutions to the missing budget.
Foreign Ministry response
The Foreign Ministry said that the Israeli embassy in Abu Dhabi and the Consulate General in Dubai have been fully operational since the beginning of the year. Since these are new missions, there is a regulated process of budget approvals and approvals of standards and manpower. The Ministry of Foreign Affairs is working to fully staff the missions as soon as possible and to provide a suitable budget for their activities.