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HomeUAE BusinessU.S. freezes Abraham fund as Israel-UAE business ties falter

U.S. freezes Abraham fund as Israel-UAE business ties falter

U.S. freezes Abraham fund as Israel-UAE business ties falter

The U.S. government has suspended the Abraham Fund indefinitely, U.S. and Israeli sources close to the matter told the Globe. The Abraham Fund was established after Israel, the UAE and the United States signed the Abraham Accord in September 2020, with the signatories aiming to finance the fund with other countries that joined later.

“The Fund will deliver on the promises made in the Abraham Accords. The Fund will inject more than $3 billion into the private sector development investment market to foster economic cooperation and encourage prosperity in the Middle East,” said the announcement at its inception. East and Beyond. Countries that are partners in establishing the fund will welcome other countries to join to further its goals.

The Abraham Fund, which became operational in October 2020, reviewed hundreds of requests for funding to various businesses within three months. It also approved more than a dozen businesses in the energy, food tech and fintech sectors. The Abraham Fund has also approached large financial institutions in the United States, who have been asked to join efforts to increase the fund’s capital.

However, the election for Joe Biden’s new U.S. president was halted. Rabbi Arie Wrightstone, who was appointed by Donald Trump to head the Abraham Fund, stepped down in late January, shortly after Biden was sworn in. Since then, a Biden administration has not replaced him. The Biden administration supports the Abraham Accords, and even though they were signed by Trump, it has been less enthusiastic about appropriating the Abraham Fund from the budget. Israel’s foreign ministry spoke to sources in Washington on the matter, and Washington told Jerusalem it was reassessing the activities of the Abraham Fund.

One reason for the reassessment is the huge spending the Biden administration will need to make for an economy recovering from the Covid-19 crisis, reports in the United States said. A senior U.S. source told the Globe that the White House was interested in the promotion and success of the Abraham Accords and bringing in more partners for the measures, but the focus would be on the diplomatic dimension, and the fund itself had been frozen indefinitely. An Israeli source confirmed this and said that in talks with the Americans, both during Israel’s previous and current administrations, it was clear that the fund’s activities were not on the agenda.

The suspension is one of the reasons for the UAE to set up an investment fund in Israel, which was announced in March 2021. But the fund has since failed to launch. 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 ahead of elections in March to issue a joint statement on the matter, But the move never took place due to a diplomatic spat with Jordan.

In March, bin Zayed also announced the establishment of an additional $10 billion fund in Israel, which will invest in energy, industry, infrastructure, space, health and other fields. The fund announced that it will emphasize supporting businesses that advance the welfare and economies of both countries and the region as a whole, and will operate primarily in the private sector.

But nearly four months have passed, and a new Israeli government has been formed, and nothing has happened to the fund other than general discussions between representatives of the Israeli Ministry of Foreign Affairs and their Emirati counterparts on ways to boost the fund’s activities and strengthen diplomatic agreements. Suitable for activities.

On the Israeli side, the ministries of economy, infrastructure and energy, among others, are discussing which projects to propose to the new fund. Israel hopes the agreement signed by Foreign Minister Yar Rapid during his visit to the UAE last week will provide the legal framework for the UAE government to invest in Israel through the fund. One or two Israeli government ministers are expected to visit the UAE soon to discuss the fund and how it will be implemented.

But in practice, the fund didn’t really come into existence, and it doesn’t appear to be there. Meanwhile, in Abu Dhabi, they are examining the conduct of the new Israeli government and its ability to foster commercial and economic ties between the two countries. Among other things, DP is awaiting the progress of the Haifa port tender, which Sultan Ahmed bin Sulayem wants to bid on. Of course, there is also the issue of the Eurasian Pipeline Company (EAPC) on the agenda.

Commercial relations between Israel and the UAE have been undermined by a new dispute with the new Israeli government and diplomatic business incidents. Last week, The Globe reported that businessmen from two of the UAE’s wealthiest families were outraged by the cancellation of a meeting with Lapid during his visit to Abu Dhabi.

A UAE business source told the Globe that Israel’s withdrawal from the EAPC’s agreement with Med-Red Land Bridge Ltd. to transport oil from the Persian Gulf to Israel for supply to customers in the Mediterranean would damage economic relations between the two countries . nation, and as a future deterrent for Emirati companies. The successful implementation of the agreement – in other words, the delivery of the first oil containers to the port of Eilat and then to Ashdod without any obstructions or leaks, will allay Israel’s concerns, the sources said, The potential to expand the protocol is enormous.

There are voices in Israel’s new government to cancel the agreement due to opposition from Environmental Protection Minister Tamar Zandberg and other ministers. Foreign Minister Yar Rapid told the Globe during a recent visit to the UAE that he was looking into the issue. “We don’t want to damage the environment. We have to take care of our country and we cannot let the disaster of the past repeat itself (Nahal Evrona leak).” The issue will be heard by the High Court, and the government has yet to respond to a petition on the matter.

A diplomatic source in the UAE told the Globe that the issue was barely mentioned during Lapid’s visit, although Israel made it clear that scrapping the deal would hurt cooperation in the energy sector, which would also extend to gas and possibly energy. Emirati firm’s investment in Israeli infrastructure venture capital. The UAE source also said that the UAE expects the new government to fulfill all the commitments made by the Netanyahu government, and the EAPC agreement is one of them.

A paradox of Israel’s diplomatic activities in the UAE is the disparity between the economic results it produces and the conditions under which Israeli diplomats work there due to major budgetary difficulties. For example, the consulate in Dubai, which was intended to occupy an entire floor of an office building, is now only renting a few rooms. Even the consulate opening, attended by Rapid and the UAE Minister of Artificial Intelligence, took place in a hall rented specifically for the occasion.

Due to these difficulties, the activities were not widespread enough and the great potential was not realized. The Globe has learned that the official apartment of Israel’s consul general in Dubai, Ilan Sturman, was only partially furnished and he had to sleep on a mattress on the floor because he didn’t have the budget for a bed. In addition, the staffing of consulates and embassies in Abu Dhabi is incomplete and creative administrative solutions have been taken due to budget shortfalls.

The Ministry of Foreign Affairs said: “Since the beginning of this year, the Israeli Embassy in Abu Dhabi and the Consulate General in Dubai have been functioning as well-organized offices. As these are new offices, there is a set of procedures for approving budgets, positions and personnel. The Ministry of Foreign Affairs is working on Strive to fully staff the representative office as soon as possible and provide a budget suitable for its activities.

Published by Globes, Israel Business News – World Wide Web – July 7, 2021

© Globes Publisher Itonut (1983) Ltd. 2021 All Rights Reserved

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