Trade and investment prospects for the UAE and Israel are a "dividend of peace" that will strengthen newly forged ties between the region's two most innovative economies, UAE Minister of Economy Abdulla bin Touq said.
“The prospects of trade and commerce between Israel and the UAE are exciting for both countries,” Mr bin Touq told an online seminar hosted by the US-UAE Business Council on Monday evening.
“Think about the power of these economies. Imagine what is possible now that you will be trading and working with one another.”
There is immense potential for economic co-operation and investment in segments such logistics, aviation, agricultural technology, green energy and food and water security.
The UAE is looking at eight trade and economic agreements, including double taxation and a free-trade agreement, with Israel at a later stage, Mr bin Touq said before the formal signing of the Abraham Accord in Washington on Tuesday.
“We are already seeing reports of Israeli firms signing deals with Emirati firms and we anticipate a host of joint ventures in almost all sectors,” Mr bin Touq said.
“We cannot take this moment for granted. Opportunity is knocking and we must open the doors. We must seize the moment."
Last month, the UAE become the first Gulf nation to normalise diplomatic ties with Israel under the deal, known as the Abraham Accord.
UAE Minister of Foreign Affairs and International Co-operation Sheikh Abdullah bin Zayed was in Washington with a high-ranking delegation to sign the accord on Tuesday.
The accord also allows for the growth of the tourism, aviation, security, telecoms, technology, financial services, energy and healthcare sectors in the two countries.
Mr bin Touq said establishing direct ties between two of the Middle East’s most advanced economies would transform the region by spurring growth.
He said economic prospects for the region had “never looked better”.
The UAE is ranked fifth in the world with a gross domestic product purchasing power per capita of $74,000 (Dh271,580) while Israel is ranked 35th at $39,000, the World Bank says.
The normalisation of ties could value Israeli exports to the UAE at between $300 million and $500m a year, which is about 0.4 per cent of its total exports.
The level of UAE investment in Israel could reach $350m a year, about 1.9 per cent of inbound foreign direct investment, Moody’s Investors Service said in August, citing Israeli economy ministry estimates.
Israel is also expected to benefit from having access to more secure energy supplies from the UAE, the credit rating agency said.
The two countries hit a milestone on August 31 when the first commercial flight linking them landed in Abu Dhabi.
The El Al flight carried advisers of US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu.
Mr bin Touq said the aviation sector, which is among the sectors hit the hardest by the virus-induced slowdown, has “boundless opportunities” for growth as it recovers from the crisis.
The introduction of direct flights is expected to create more choice for passengers to Asia and Africa. Low-cost airlines such as flydubai and Air Arabia could also play a part in increasing traffic between the UAE and Israel.
The logistics sector in both countries could also benefit from the linking up of ports.
The UAE, which is home to the second-largest solar plant in the world, is keen on working with Israeli companies on clean energy, including solar thermal plants, batteries, smart power grids, biofuels and floating solar plants, Mr bin Touq said.
Officials from the two sides have begun to explore opportunities in areas such as food and water security.
The Abu Dhabi Investment Office and Invest in Israel, two bodies responsible for boosting foreign direct investments, have held an online meeting, with a particular focus on innovation and technology investments.
Financial institutions such as First Abu Dhabi Bank, the UAE’s biggest bank by assets, are also in discussions with Israeli lenders.
These discussions are intended to establish relationships that focus on correspondent banking, bilateral trade, technology and innovation, FAB said.
"Following the signing of a memorandum of understanding between the UAE Central Bank and the Israeli Prime Minister's office, First Abu Dhabi Bank will open discussions with leading financial institutions in Israel, namely Bank Hapoalim and Bank Leumi," it said in a September 1 tweet.
Even before the historic diplomatic deal, Israeli and Emirati companies in the defence and technology sectors collaborated on developing solutions to fight the Covid-19 pandemic.
In mid-August, the UAE’s Apex National Investment and Israel’s TeraGroup signed a deal to develop a coronavirus-testing device that would produce accurate results in a shorter period of time.
Group 42, an artificial intelligence and cloud computing company in Abu Dhabi, plans to open a wholly owned subsidiary in Israel.
Last month, its subsidiary G42 Healthcare signed an agreement with Israeli company NanoScen.
The parent company signed two different deals in July with Rafael Advanced Defence Systems and Israel Aerospace Industries to develop solutions for the Covid-19 virus.
Israel is home to more than 6,000 high-tech companies and start-ups, and leads the world in the number of scientists and technicians in the workforce, with 145 for every 10,000, compared to 85 in the US.
There is also a huge scope of trilateral co-operation between the UAE, the US and Israel, especially in sectors such as agricultural technology, space, future technology and digital economies of the world.
“The Fourth Industrial Revolution was theoretical last year. Today, it is practical,” Mr bin Touq said.
“I think we can come together advancing the Fourth Industrial Revolution, creating jobs and acquiring future skills for our nations.”