Israeli passport? Saudi Arabia welcomes you
Danny Zaken
Saudi Arabia has relaxed its entry rules for Israeli businesspeople, and trade is burgeoning.
After lifting the ban on Israelis in its territory,
dozens of businesspersons with Israeli passports have landed in Saudi
Arabia. Their goal: take advantage of warming relations between the
countries to advance bilateral economic agreements. These visits have
resulted in two multimillion-dollar desert agriculture deals, in
addition to a medical equipment contract. Danny Zaken The United States
is mediating between Israel, Saudi Arabia and Egypt towards
normalization of relations. On the agenda is also the issue of
completing the transfer of Red Sea islands Tiran and Sanafir to Saudi
sovereignty. But normalization with Saudi Arabia, even if not officially
announced, is already almost here. This is reflected in large recently
signed deals, visits by businesspeople with Israeli passports on special
visas to Saudi Arabia, and advanced contacts for investment in Israel
by Saudi businesspeople and investment funds.
"For
over twenty years we’ve had an indirect connection with Saudi Arabia,
but I don’t recall ever seeing a boom like the one we’ve had in recent
months," a source familiar with the matter told "Globes". Those
commercial ties were behind the scenes, mostly through companies
registered in Europe or other countries, and the deals - in sectors
ranging from civilian to security - were signed in those countries.
"Globes" has learned that, for months, Saudi Arabia has been
permitting Israeli businesspeople - mainly representatives and managers
of Israeli technology companies invited by the Saudis - to enter its
territory on Israeli passports with special entry visas. The change that
has taken place in recent months is the lifting of the blanket ban that
had been in place, and easing of the special visa issue process.
Dozens of businesspeople have taken advantage of this opportunity and
visited Riyadh, the economic center of Saudi Arabia, and also other
places like Neom - the city of the future being built not far from the
Red Sea coast. Former prime minister Benjamin Netanyahu also visited
this city, and according to reports, met Crown Prince Mohammed bin
Salman in November 2020, a meeting also attended by then-US secretary of
state Mike Pompeo.
These visits have spawned quite a few deals, including two desert
agriculture deals worth millions of dollars. According to an informed
source, these projects make use of Israeli water technology, essential
for the Saudi Arabian desert climate, in combination with other Israeli
agricultural technologies. These two technologies are being monitored
closely by the monarchy, with the goal of expanding them as part of
Saudi Arabi’s efforts to achieve food security and self-sufficiency.
These projects have significance for the entire Middle East, as they
also demonstrate to other countries in the region Israel’s ability to
assist in areas especially important to countries suffering from food
shortages.
Israeli businesspeople and agritech specialists insiders are not surprised by the Saudi investment. "Other than a direct diplomatic connection - and direct bank transfers - we have everything we need between the countries to sustain a business connection, sign deals, and transfer goods and know-how," one Israeli businessman tells "Globes".
An unstoppable interest in startups
"Globes" has learned that, as part of this recent activity, other
deals have been signed in agriculture and civilian technology sectors
like medical devices (medtech). In addition, there is a growing interest
in investing not only in startups but also in proven Israeli products.
Those same sources estimate that these transactions are close to being
signed, and will precede the institutional investments to be made
through the Saudi Public Investment Fund (the sovereign wealth fund).
Dr. Nirit Ofir, CEO Chamber of Commerce and Industry Israel-GCC (Gulf
Cooperation Council), says that "the interesting thing is that it’s the
private sector, on both sides, pulling things forward rapidly." She
adds, "Businesspeople are not limited by diplomatic issues, and when
personal interests and business interests come together - they move
ahead." She emphasizes that, unlike with the UAE, the transactions are
between businesspeople in the private commercial sector, and not between
the two states.
Israel recruited to Saudi Arabia oil talks
Another confirmation of Israeli activity in Saudi Arabia comes from
Riyadh. An informed source, a senior Saudi official, told "Globes" that
the number of entry visas applications for Israelis filed by Saudi
businesspeople was growing, as was the rapid rise in interest and thirst
for information about Israeli technologies. The source adds that
meetings between businesspeople from the two sides are also taking place
in Dubai and Abu Dhabi in the UAE, as well as in Manama, the capital of
Bahrain.
"The government here sees the possibilities inherent in this
activity, which suits the plans and major reforms promoted by the Crown
Prince."
Security and intelligence ties are important to the two countries,
mainly because of the common enemy: Iran. A number of reports have
indicated sales taking place of Israeli security systems to Saudi
Arabia. This shared concern has created the common ground needed in
other areas, and has also given Israel a far greater geopolitical
influence than in the past. This is evidenced by the US’s recent
attempts to recruit Israel to help persuade Saudi Arabia to increase oil
production, in the face of the global shortage of energy resources
created by Russia's invasion of Ukraine.
The Saudis, who have been disappointed by the US several times in
recent years, did not readily agree. This week, two of US President Joe
Biden's advisers arrived in Saudi Arabia to advance the matter. These
talks - according to US sources - will also raise the matter of
promoting economic and trade relations with Israel.
A first: Saudis lay blame on Palestinians
Officially, Saudi Arabia is wary of public ties with Israel. The
Saudis make clear at every opportunity that progress with Israel will
come only after progress with the Palestinians. Saudi Foreign Minister
Prince Faisal bin Farhan reiterated this week, "The integration of
Israel in the region will be a huge benefit not only for Israel but for
the entire region. But without addressing the core problems of the
Palestinian people and granting respect and sovereignty to the
Palestinian people through the establishment of a Palestinian state, the
instability and threats to Israel’s security and the entire region’s
security, will continue."
Unofficially, however, the Saudis, as expressed on social media,
blame the Palestinians as well. Pictures of stones, Molotov cocktails
and other improvised weapons brought by young Palestinians into the
Al-Aqsa Mosque in Jerusalem sparked massive outrage in Saudi Arabia. The
diplomatic shift vis-à-vis Israel will probably take place only after
the official transfer of power from King Salman to his son Mohammed. But
economic change is already here, and the pace is picking up.
Awaiting Kushner's private equity fund
Saudi Arabia's ongoing confrontation with Iran, both over the nuclear
issue (especially in the period of the 2015 Iran nuclear agreement) and
the civil war in Yemen, has led to further understandings between Saudi
Arabia and Israel, this time in security and intelligence. The
gathering momentum in civil relations came in the wake of the Abraham
Accords, signed by former prime minister Benjamin Netanyahu with Saudi
Arabia’s neighbors: the United Arab Emirates and Bahrain. The largely
positive way in which this agreement was received by Saudi public
opinion, plus its economic and other benefits, paved the way for these
ties to be expanded. For example, the Saudi’s tacit agreement was
expressed through the allowing planes flying to and from Israel to fly
over Saudi territory, on routes between Israel and the Emirates and
Bahrain, and also to the Far East.
A significant step, taken in recent weeks, towards normalizing the
relationship and allowing it to emerge from the shadows was report in
the "Wall Street Journal" about a $2 billion Saudi investment in the
private equity fund set up by Jared Kushner, son-in-law of former US
president Donald Trump. The $3 billion fund targets investment in
Israeli advanced technology companies.
This is not the first time that Saudi Arabia has invested in Israeli
companies: via the investment fund of another former Trump
administration official, Steven Mnuchin, the kingdom is investing in
Israeli start-ups operating in the US that have agreements with the US
defense establishment, including cyber companies Zimperium and
Cybereason. But the investment in Kushner's fund comes from the Saudi
Public Investment Fund, with the direct approval of Mohammed bin Salman,
the kingdom’s regent and strong man.
Published by Globes, Israel business news - en.globes.co.il - on May 30, 2022.
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