The Significance of the Abraham Accords

The UAE and Bahrain, on September 15, 2020, signed diplomatic agreements with Israel during a ceremony hosted by US President Donald Trump at the White House, a move that established full ties, including exchanging embassies with Israel – an immensely significant development, signalling the end of several decades of conflict. (It must be noted that since its creation as a Jewish state, in 1948, Israel had been isolated from nearly every other country in the predominantly Muslim Middle East.)

UAE’s neighbour, the Kingdom of Saudi Arabia, cautiously welcomed the peace initiative, as did others in the MENA region, notably the Sultanate of Oman and Egypt.

Speaking from the UAE perspective, as a case-in point, the agreement – named the Abraham Accords – enables the country to develop commercial, diplomatic and security ties with Israel, and to collaborate on technology and healthcare. According to Abu Dhabi-headquartered The National newspaper, the 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, issued in August.

The UAE and Bahrain are not the first Arab countries to sign an agreement with Israel, though; indeed, Jordan and Egypt were the first two Arab countries to have done so. Unlike Jordan and Egypt, though, the UAE and Bahrain have never fought in any of the six Arab-Israeli wars. Speaking from a UAE perspective, moreover, Dubai is a business hub for the region, and Abu Dhabi is keen to diversify its economy beyond hydrocarbons. These factors give the confidence that the agreement could be a long-lasting 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, in August, 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.” Such a statement would have been quite unthinkable even in the first week of August 2020.

What the agreement means 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 socio-economic 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 district cooling, indoor air quality and refrigeration (food cold chain (food safety and food security), pharma cold chain (vaccine integrity), etc.)

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 economy – including tourism – 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. As Rabbi Marc Schneier, an expert in Muslim-Jewish relations, said, regular flights from Israel would bring many tourists to the UAE. “You are going to see an awesome multitude of people descending on the Emirates with supreme warmth, affection, respect and admiration for the leadership of the UAE and for what the country represents,” the Rabbi added. Such words augur well for the HVACR industry.

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.