Saudi-Israeli relations shift into high gear
The weekend’s Wall Street Journal report that Jared Kushner raised $2 billion from Saudi Arabia’s sovereign wealth fund to invest in Israeli tech companies through his private equity fund is a substantial step forward in the relations between the two countries with important diplomatic importance. According to the report, it would be a direct investment of Saudi money in Israeli companies – a more than symbolic decision which demonstrates the Saudi royal family’s desire to be a player in the Israeli economy, while at the same time removing more obstacles on the way to direct relations with Israel.
The biggest obstacle currently preventing Saudi Arabia from joining the Abraham Accords is King Salman, the father of Crown Prince Mohammed bin Salman (known as MBS). For some years his health has been declining and yesterday he was again hospitalized in Riyadh for medical examinations. MBS has practically ruled the kingdom for some time and has implemented far-reaching social and economic reforms.
Israeli and Saudi diplomatic sources say the economics of investing in Kushner’s fund are important, but the indirect diplomatic implications are even greater. A Saudi source told ‘Globes’, “The whole world is investing in Israeli technology and there is no reason for Saudi Arabia, which promotes Crown Prince Mohammad bin Salman’s 2030 vision for economic progress and social in the age of high tech, don’t also invest.Our areas of focus range from agriculture and water technology, solar energy and others to fintech, cybersecurity and more. Current business is through international funds and Jared Kushner’s Affinity Partners fund is not the only way we invest.”
Regarding diplomatic matters, the Saudi source added: “The fact that bin Salman approved direct investments and not indirect investments, as there have been so far, indicates that another barrier has been crossed and that direct relations open to the public are approaching”.
But the source adds: “An important and public diplomatic initiative will be difficult for bin Salman to do without a diplomatic concession on the Palestinians. Together with the United Arab Emirates, you have given the annulment of the sovereignty (annexation) of the West Bank. But bin Salman is a reformer and therefore nothing would surprise me.”
The Israeli source agrees with these main ideas and points out that the link with the Saudis has existed for a few years in many areas and that these links have been maintained after the change of government in Israel last year. In practice, the source says, what could delay diplomatic progress is the continuing political crisis in Israel and the possibility of the government falling. “In Riyadh, they see the success of economic-technological-trade relations with the UAE and they want it too. Politically, there is no doubt that bi Salman will demand a concession,” the Israeli source adds.
Saudis pay $2 billion to Kushner’s Israeli investment fund – report
Getting closer because of the common fight against Iran
Israel’s movement towards Saudi Arabia and other Gulf states has been spurred by Israel’s campaign against Iran’s nuclear program, which also threatens the Gulf, as well as Iran’s support for terrorist organizations in throughout the Middle East, including Saudi Arabia and Bahrain. The nuclear deal signed in 2015 and then-Prime Minister Benjamin Netanyahu’s campaign against the deal led to direct contacts and attempts to coordinate positions. The election of US President Biden and attempts to revive the Iran nuclear deal have raised concerns in the Gulf, which partly explains the meeting between Emirati and Saudi officials with their Iranian counterparts.
An Israeli diplomatic source told “Globes” that the path of economic and trade agreements could expand in the near future to other Arab and Muslim countries. He added: “There are at least three countries that are in talks with Israel about trade agreements or arrangements or other agreements like diamonds (for example the agreement to open an Israeli representation in Qatar Diamond Exchange as revealed in “Globes”) but also other domains.” He cited Saudi Arabia in terms of aviation, airspace and other agreements.
Through his bridge with Israel, bin Salman also hopes to promote investments in cybersecurity and life sciences in the new city of Neom, which along the Red Sea coast is a joint project with Jordan and Egypt.
Published by Globes, Israel business news – en.globes.co.il – on May 9, 2022.
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