On Sept. 15, the UAE took a landmark and historic step when it officially recognized the State of Israel pursuant to the Abraham Accords signed between the officials of the UAE and Israel. Not only will this recognition of Israel by UAE usher in a new era of economic betterment for the country and the region, but it is also emblematic of the grand foresight and vision of their Excellencies Khalifa Bin Zayed Bin Sultan Al Nahyan and Sheikh Mohammad Bin Rashed Al Makhtoum who decided that the time was ripe for UAE to take the giant leap of developing greater economic integration with Israel and thus pave the way for further prosperity of the UAE
Media reports indicate that cooperation in the economic, banking and financial services sector between the two countries has already commenced. The UAE and Israel have set up a joint committee to cooperate on the financial services sector with a view to improving investment between the two countries. The focus of the collaboration between the two countries, it has been reported, will include financial services and removing of financial barriers for making investments as well as the promotion of investments in the capital markets. Reportedly, the two countries will also collaborate in the banking services sector.
Although there are mutual opportunities for the two countries in many fields, collaboration in the banking and financial services sectors in the UAE – the backbone of the Gulf country's economy – offers unprecedented opportunities for the UAE, its citizens and the residents.
It is important to note that UAE's banking sector has witnessed robust growth due to the business-friendly policies adopted by the UAE's central bank. Despite a pandemic that has ravaged global economies, the UAE economy has continued its upward trajectory of growth due to the central bank's policies of maintaining the stability of the currency, promotion and protection of the stability of the financial services sector and prudent management of the foreign reserves. No wonder there is general optimism that UAE economy will not only weather the Covid-19 storm but will continue to witness further growth.
In this context, the signing of an agreement between Israel's largest bank, Bank Hapoalim, and the UAE's largest bank – the National Bank of Dubai – is a most welcome step. Media reports indicate that Emirates NBD also signed an MOU with Bank Leumi. Moreover, the Abu Dhabi Investment Office, which is responsible for attracting foreign direct investment into the capital of the UAE, is planning to set up a first of a series of representative offices in Israel.
Amongst other things, these agreements will enable Israeli citizens to conduct direct transactions in the UAE. This induction of 'new capital' in the UAE banking sector will not only further transform the outlook of the UAE banking sector but will also enable UAE's banking and financial services sector to live up to the mark of its reputation as a truly global enterprise that is accessible to the world-at-large.
Additionally, there are reports of extensive collaboration in the financial services sector as well. Both Israel and UAE are home to startups and new business ventures. To this end, leading UAE companies entering into a partnership with Israeli fintech companies will enable the Israeli companies to enter the UAE market and for the UAE to benefit from technological development and expertise brought to the UAE
The above collaborations are just the tip of the iceberg. Bigger and much more lucrative ventures are in the offing in near future. It is pertinent to note that business collaboration of this magnitude will bring with it jobs and economic betterment all of which will greatly contribute to the UAE economic future. Without any doubt, UAE has lived up to its reputation as the "Jewel in the Desert" and has played a masterstroke by recognizing Israel and thus paved the way for a better future for the UAE as well as the region.
