There has been a flurry of excitement from Israeli and Emirati businesses since the Abraham Accords announced normalization between the two countries in August, but there have been only a handful of deals to show for it.
Experts warn that Israeli chutzpah may just be too much for the more gentle Emirati way, which values building relationships over time rather than the hurry flurry approach Israelis are known for.
Raphael Nagel, chairman of The Abrahamic Business Circle, an organization that uses “economic diplomacy” to bring together the two nations through business ties, says that there are misconceptions that must be broken down for the relationship to endure smoothly.
“Many people see Dubai and the UAE as the land of milk and honey,” he says. “It’s an easy dream to believe and one of the most common misconceptions of those who come here thinking money is just lining the streets.”
With around 90 percent of the population expatriate, hailing from almost 200 countries, everyone in the UAE has the same goal, of building a better future.
The UAE is a hugely competitive market with world-class innovation and technology. After Israel, it spends the region’s second-largest gross domestic product budget on research and development, and members of its expatriate workforce are some of the world’s top performers in their fields.
One of the biggest winners of the accords so far is the partnership between Jerusalem-based OurCrowd and Dubai’s Phoenix, boosting UAE-Israel tech ties. The less than a handful of other major deals include artificial intelligence and healthcare partnerships under the UAE government.
According to Aziz Mulay-Shah, a former Canadian diplomat who has served in both the UAE and Israel and now works as a consultant, there is an assumption on the part of Israelis that because they are world leaders in software development and technology, that investors will throw money at them.
“There are already a lot of amazing innovators here across the government and private sectors, so that attitude needs to be tempered and expectations changed,” he says.
With centuries of trading history, the UAE is no stranger to dealing with foreign markets. “The people living and working here are talented, educated and come from professional business environments,” says Nagel, a foreign direct investment expert who works closely with both Israeli and Emirati investors.
“The UAE is no banana republic,” he says.
Since the accords were announced in August, Nagel has met with more tha100 Israelis looking for new business in Dubai across a range of sectors: venture capital, tourism, real estate, health care and trading. The quickest deals have been closed with businesses working on incoming tourism to the UAE.
When entering a new market, research is key, not least when many of the big companies in the UAE have a whole portfolio of smaller companies under one umbrella.
“So many of the Israelis coming here meet with the same people from the same company twice, unaware that they are actually coming from the same holding company or ownership and, ironically, are offering them different deals; a killer to credibility in this small market,” says Nagel.
Mulay-Shah says that while the "can-do' attitude of Israelis has led them to be world leaders in areas such as health care and technology, things operate at a different speed in the Emirates.
“It’s proving frustrating for my Israeli colleagues who had another kind of expectation and want to seize upon the momentum of the signing of the accords,” he s, adding there is also the desire to bypass authority in the Israeli way, which in a more rigid and hierarchical culture such as the UAE must be moderated.
Emirati businessman Thani Al-Shirawi agrees.
One of the founding members of the UAE-Israel Business Council, an organization he hopes will bridge the cultural gap between the two sides, he says the Israeli “pushy and transactional” approach will not work in the Emirates.
“It will bring the locals here outside their comfort zone,” causing “mistrust,” he says.
“Here, things take time and there is a hierarchy. Usually there is a go-to person between businesses, which is also how I do business, using someone who is the person on the ground doing the research and bringing the expertise before that decision is even made," he says.
"Therefore, I’m not really the ultimate decision-maker. Only if my go-to person says it’s viable will I take things forward, so this adds layers to the process.”
Dubai-based cultural expert and businessman, Ahmed Al Mansoori, says the way the relationship will develop long-term is by knowledge-sharing.
“The way Asia, especially Korea, has done things with the UAE is a model for sustainable relations,” he says, referring to the country’s involvement in fields including semiconductor and nuclear technology.
“Rather than just selling to us, they engage in knowledge exchange. This is really what will make the difference with Israelis too. They need to get beyond just selling, beyond the transactional relationship, because ultimately, the country needs to also be self-sufficient.”
There is so much demand to better understand this new terrain that the S P Jain School of Global Management – Dubai campus is launching a certified four-day professional workshop, covering the subjects including taxation, politics and government, and legal framework.
Dr. Christopher Abraham, CEO and head of the Dubai campus, says: “Professionals are looking for clear guidelines and advice."
The aptly named workshop, "Destination Future Growth – Doing Business in the Middle East," which opens for the first time in January, will allow businesses to learn from locally based professionals and entrepreneurs and includes site visits to various sectors.
Abraham says one of the biggest hurdles to doing business in the UAE was removed this week, with the announcement that businesses no longer need a local partner, allowing for 100 percent foreign ownership.
While the two sides find their way, the key question is what the economic impact of the deal will be. A Washington Institute study this week revealed that just 20 percent of Emiratis are in favor of the accords, suggesting things will not move as quickly as the Israelis may hope.
“There are a lot of deals being discussed but there is as yet little closure, and that’s the main thing we have to change. We have to come to a point where we really need transaction volume, real deals,” says Nagel.
Article written by Melanie Swan, republished with permission from The Media Line