It is a common refrain for those that support Israel to, “Pray for the peace of Jerusalem”. After decades of wars and rumors of wars, we may be so fortunate to live at a time when peace may be coming to the Middle East. As we see these historic deals for peace and economic normalization come to pass between Israel and other Muslim nations, it is valuable to look back and see how we got here and what it means to the average investor.
Ever since the US Trump Administration returned to the stance that there will be no daylight in America’s stand with Israel (America will align with Israel’s interests), the Middle East has been evolving. I noticed the shift dramatically earlier this year when a video surfaced of Iranian students from Tehran’s Beheshti University, living in a country whose leadership vows to wipe Israel off the map, intentionally decided not to step on Israeli and American flags on the ground in the path of their protest. The Jerusalem Post reported that even when the flags were stepped on, the students booed and shouted, “Shame on you.”
Within weeks of this event, the world would enter a lockdown to fight a global pandemic. I did not expect to hear much again about the changing attitudes of Arabs toward Israel. But suddenly, a courageous voice emerges out of the silence. The United Arab Emirates decided it wants to work with Israel economically. The next thing you know, many nations jump on the bandwagon in some fashion. Whether it is peace, a new embassy, talks, normalization of relations, or trade deals, so many nations want in. While the UAE started it off, Israel has made deals or expects to make deals with Bahrain, Morocco, Serbia, Kosovo, Oman, Saudi Arabia, Sudan, Uganda, Qatar and Lebanon.
Some may look at these deals cynically. After all, how does one reconcile decades of fighting with a sudden willingness to work together? A recent event may shed some light on this. As I wrote earlier, attitudes in the Arab world are shifting. Israel is no longer the enemy it was once believed to be. Earlier this month, the foreign minister of the United Arab Emirates, Sheikh Abdullah bin Zayed bin Sultan Al Nahyan, planned a meeting with the foreign minister of Israel, Gabi Ashkenazi, to tour a Holocaust Memorial in Berlin with the German foreign minister, Heiko Maas. The memorial is called, “The Memorial of the Murdered Jews of Europe.” It is hard to believe that in my lifetime, I have seen the Arab nations go from calling for another Holocaust to an Arab minister leading a tour to honor the victims of the Holocaust. Jewish News Syndicate reported that Bin Zayed said in the wake of the Abraham Accords, “the Middle East is witnessing a new chapter on its path towards freedom and peace. I would like to assure you that the opportunities in our region for more cooperation in different sectors exist, in terms of security and also in terms of technology. On an international level, the Emirates is committed, together with its Israeli partners and its German partners, to fulfill this role.”
There is more evidence emerging this week from a Zogby poll on the attitudes of Israelis and Arabs from five different countries: Egypt, Saudi Arabia, UAE, Palestine and Jordan. The poll stated that 79% of Saudis are in favor of normalizing ties with Israel over the next five years. The most shocking part of this poll was that it was conducted from late June to early July, over a month before these new peace and economic deals were even announced.
So, where does this leave us? This week the US, Israel and UAE announced a $3 billion regional investment fund. The Times of Israel reported that the creation of the new trilateral fund would funnel investment to projects that “promote regional economic cooperation and prosperity in the Middle East and beyond.” The joint statement released on the project stated, “The Abraham Fund will bolster regional trade, enable strategic infrastructure projects, and increase energy security through the provision of reliable access to electricity. The fund also aims to improve agricultural productivity and facilitate reliable and efficient access to clean water in the region...The partners welcome participation from other countries to advance these objectives.” This sounds great on paper, but what does it mean to the average investor? It shows that this changing attitude is may be manifesting itself in true regional partnership that will benefit all economies in the region with trade partners, innovation and investment. Israel is already a strong economy with a stable currency; this development merely adds to the sentiment that Israel is one of the best places to invest in the world. Now the rest of the world is catching on.
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