Abraham Accord: Emerging Opportunities, Interesting Possibilities

While COVID-19 has dampened market sentiment, with new projects few and far between, there is emerging optimism in the UAE over the peace agreement signed with Israel, and the commercial possibilities, therein

The UAE, on August 13, 2020, moved to establish full ties and to exchange embassies with Israel – an immensely significant development, signalling the end of several decades of isolation of the Jewish state.

The UAE framed its agreement – the Abraham Accord – as a significant measure that halted Israeli plans to annex the West Bank territory. Given the promise of averting the threat of annexation, the UAE’s neighbour, the Kingdom of Saudi Arabia, cautiously welcomed the peace initiative, and others in the MENA region – Bahrain, Oman and Egypt – welcomed the agreement.

The agreement enables the UAE to develop commercial, diplomatic and security ties with Israel, and to collaborate on technology and healthcare. According to The National newspaper, the accord, or agreement, envisages travel between the two countries, trade – including of technology and goods – and co-operation in areas such as food security, climate change and energy, as per a joint statement by the UAE and Israel.

The evidence of normalising of ties was immediately evident after the signing of the agreement – ministers from the UAE and Israel swiftly moved to open phone lines and unblock Internet access, while companies in the two countries announced new pacts. As a specific instance, UAE-based APEX National Investment said it had agreed to conduct research on the coronavirus with Israel’s TeraGroup.

Several factors give the confidence that the agreement could be a longlasting one. Indeed, there is sufficient reason to look at the situation with rosy optimism, given that there is a palpable political will to make further progress in the direction of peace. By way of summing up the shift, the UAE’s Minister of State for Foreign Affairs, Anwar Gargash, said, “Clearly, 70 years of not communicating with Israel has led us nowhere. I think we need to shift to a new method of doing things. And that method simply is: We can disagree with you in political issues, but we can work with you [on] nonpolitical issues.”

The significance of the Abraham Accord for the HVACR industry For the HVACR industry, the two countries have much in common, including similar ambient conditions and a drive for innovation. The UAE’s socioeconomic and sustainable development goals are inextricably linked to significant contributions from the HVACR industry, as is the case with Israel, which over the years has developed innovative HVACR products and services. The agreement opens the door to HVACR-related trade and the exchange of knowledge in such areas as cooling, indoor air quality and refrigeration. The very fact that the two countries have issued a joint statement indicating collaboration in such areas as trade, food security, climate change and energy is highly significant.

Above all, the agreement is a massive boost to confidence in the UAE economy – including tourism and perhaps even real estate development – and investment opportunities, which could see a demand for – and a sustained return to – new projects, refurbishment of existing projects and the growth of cold chain infrastructure.