US freezes Abraham Fund as trade ties between Israel and UAE falter

The US administration suspended the Abraham Fund indefinitely, US and Israeli sources familiar with the matter told “Globes”. The Abraham Fund was established after the signing of the Abraham Accords between Israel, the United Arab Emirates and the United States in September 2020, and the signatories were supposed to finance the fund along with other countries that would join later. “The fund will fulfill the commitments contained in the Ibrahim agreements. The fund will inject more than $3 billion into the development investment market in the private sector to enhance economic cooperation and encourage prosperity in the Middle East,” an announcement said upon its establishment. East and beyond. The countries co-founding the fund will welcome other countries to join in furthering its goals.” The Abraham Fund was already operational in October 2020, and within three months it examined hundreds of applications for financing various projects. It also approved more than a dozen projects in the fields of energy, food technology, and financial technology. The Abraham Fund also reached out to large financial institutions in the United States that were asked to join efforts to raise capital in the Fund.However, the election of Joe Biden as the new president of the United States brought activities to a halt.At the end of January, after Shortly after Biden was sworn in, Rabbi Aryeh Lightstone, who was appointed by Donald Trump to head the Abraham Fund, has since been replaced by the Biden administration. Ibrahim from its budget.The Israeli Ministry of Foreign Affairs spoke to sources in Washington about the matter, and Washington informed Jerusalem that the activities of the Abraham Fund were being reassessed. The reasons for the reassessment are the huge expenditures that the Biden administration needs in the economic recovery from the Covid-19 crisis. A senior American source told “Globes” that the White House is interested in consolidating and succeeding Abraham’s agreements and bringing in additional partners for these measures, but the focus will be on the diplomatic dimension, and the fund itself has been frozen indefinitely. An Israeli source confirmed this, and said that in talks with the Americans, during the previous Israeli government and the current government, he made it clear that the fund’s activities are not on the agenda. This suspension was one of the reasons why the United Arab Emirates set up an investment fund in Israel, which was announced in March 2021. But since then this fund has also failed to take off. Former Israeli Prime Minister Benjamin Netanyahu and UAE Crown Prince Mohammed bin Zayed agreed on the fund and Netanyahu had hoped to visit Abu Dhabi before the March elections to obtain a joint declaration on the matter, but due to a diplomatic row with Jordan, the move was not moved forward. Related Articles Lapid Loses Business in the UAE In March, Bin Zayed also announced the creation of an additional $10 billion fund in Israel, which will invest in energy, industry, infrastructure, space, health, and more. The fund announced that it will stress support for projects that will enhance the welfare and economy in the two countries and the entire region, and that it will work mainly in the private sector. But about four months passed and a new Israeli government was formed and nothing happened with this fund except for some general discussions between representatives of the Israeli Ministry of Foreign Affairs and their Emirati counterparts about ways to enhance the activities of the fund and tighten diplomatic agreements in proportion to that. activities. On the Israeli side, the Ministries of Economy, Infrastructure, Energy and others are discussing which projects to propose for the new fund. Israel hopes that the agreements signed by Foreign Minister Yair Lapid during his visit to the UAE last week will provide a legal framework in Israel for the UAE government’s investments through the fund. It is expected that one or two Israeli government ministers will visit the UAE soon to discuss the fund and ways to implement it. But in practice, the fund has not actually been established and does not appear to be on the horizon. In Abu Dhabi, they are simultaneously examining the behavior of the new Israeli government and its ability to strengthen trade and economic relations between the two countries. Among other things, DP World is awaiting developments in the Haifa Port tender with Sultan Ahmed Bin Sulayem’s desire to bid for the project. Of course there is also the issue of the Eurasian Pipeline Corporation (EAPC) on the agenda. Trade relations between Israel and the UAE were marred by an emerging dispute with the new Israeli government and diplomatic trade events. Globes spoke last week of the anger of businessmen from two of the richest families in the Emirates due to the cancellation of a meeting with Lapid during his visit to Abu Dhabi. A commercial source in the UAE told “Globes” that Israel’s retreat from the agreement signed by EAPC with Mid-Red Land Bridge Ltd. to transport oil from the Persian Gulf to Israel to supply customers in the Mediterranean region will harm the economic relations between the two countries. As a future deterrent for UAE companies. The source said that the successful implementation of the agreement – that is, shipping the first containers of oil to the port of Eilat and then transporting it to Ashdod without any obstacles or leaks, would allay Israeli concerns and the possibility of expanding the agreement is huge. There are voices in the new Israeli government canceling the agreement, among other things due to opposition from Environmental Protection Minister Tamar Zandberg and other ministers. Foreign Minister Yair Lapid told “Globes” during his recent visit to the UAE that he is studying the issue. “We don’t want to harm the environment. We have to take care of our country and we can’t repeat the past disasters (the Nahal Evrona spill).” The case will be heard by the High Court of Justice and the government has not yet responded to the petition on the matter. A diplomatic source in the UAE told Globes that the issue was barely touched upon during Lapid’s visit although it was made clear to Israel that canceling the agreement would harm energy cooperation, which would also extend to natural gas and potential investments. By Emirati companies in infrastructure projects investments in Israel. The Emirati source also said that the UAE expects the new government to fulfill all the obligations of the Netanyahu government, and the EAPC agreement is one of them. One of the paradoxes of Israeli diplomatic activity in the United Arab Emirates is the gap between the economic results it generates and the conditions in which Israeli diplomats operate under these hardships—great budgetary hardships. For example, the consulate in Dubai, which was supposed to occupy the entire floor of an office building, is currently renting only several rooms. Even the opening ceremony of the consulate, which was attended by Lapid and the UAE Minister of Artificial Intelligence, was held in a hall rented just for this occasion. Because of these difficulties, the activities are not wide enough and the huge potential is not realized. Globes has learned that the official apartment of the Israeli Consul General in Dubai, Ilan Shtoleman, is only partially furnished and he has to sleep on a mat on the floor because he does not have the budget to buy a bed. In addition, the consulate and embassy staff in Abu Dhabi are not perfect and creative management solutions have been put in place due to the lack of budget. The Ministry of Foreign Affairs says: “Both the Israeli Embassy in Abu Dhabi and the Consulate General in Dubai have been operating as fully organized offices since the beginning of the year. Because these are new offices, there are specific procedures for approving budgets, positions and staff. The Ministry of Foreign Affairs is working to provide representative offices with full capacity as soon as possible possible and provide an appropriate budget for its activities.” Published by Globes, Israel business news – en.globes.co.il – on July 7, 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021