Prime Minister Benjamin Netanyahu’s trip Sunday night to Saudi Arabia, where he discussed normalization and Iran with Crown Prince Mohammed bin Salman, was noteworthy not only because it brought the two leaders together but also because of how Netanyahu chose to get there: He borrowed the private jet of Israeli businessman Udi Angel.
No doubt the reason he chose to fly to the Saudi city of Neom in that manner in order to keep the meeting secret, but there is also symbolism in his use of a privately owned plane for the purpose of advancing Israeli-Gulf relations.
In recent years, senior Persian Gulf officials have visited Israel several times using planes that they, or government companies that they control, own. That intermixing of the public and the private is business as usual in the Gulf; in Israel, it raises eyebrows. Yet, in recent weeks it seems that the norms that prevail in the Gulf, where there’s little or no division between private money and government power, have made their way to Israel. They may even come to affect the way Israelis’ retirement savings are managed.
In November 2019, the TV entertainment program “Good Evening with Guy Pines” reported on the luxury wedding of an American Jewish couple in Morocco. Some 500 guests were flown to the event from Israel and the United States. A 19th-century palace was closed to the public for a pre-wedding henna ceremony. An even older palace, dating from the 16th century, was reserved for the wedding itself. Israeli singers Dudu Aharon and Kobi Peretz were flown in to perform, as were fire jugglers and a horse act.
If an event on this grand a scale had occurred in Israel, the media would presumably have investigated who had granted the permits to use historical sites for a private party. But it’s doubtful if in Morocco, a constitutional monarchy that is deemed “partly free” by the annual Freedom House survey, the media related to it that way at all.
The name of Simon Cohen, the Brooklyn owner and president of a company that makes and markets building stone, wasn’t mentioned at the time he married off his son in such high style. But it did crop up Monday, when Cohen was revealed as one of the partners of former Finance Minister Moshe Kahlon in a new investment fund founded with members of Abu Dhabi’s royal family.
Kahlon, Cohen and Sheikh Sorour Bin Mohammed Al Nahyan, a cousin of Abu Dhabi’s ruler, Sheikh Mohamed Bin Zayed Al Nahyan, will manage investments for “institutional bodies in Israel,” as well as the United Arab Emirates’ largest pension fund, Israel Channel 12 news reported Sunday. Sheikh Sorour has served as UAE justice minister and on the board of the UAE’s central bank. Kahlon will chair the fund, called SCK after the three partners’ names. It will invest in technology and innovation.
- Get over your liberal guilt about Israel’s peace with the Gulf
- Israeli settlers want to make business deals in Dubai. Pity they have nothing to offer
- Israeli business has gotten a bad case of Dubai fever
The UAE institutional investor whose money it will be in part managing is the Abu Dhabi Retirement Pensions and Benefits Fund, which the sheikh heads. On the Israeli side, Menorah Mivtachim is the institution expected to put money into SCK. Cohen private funds will also be invested in the fund.
This is a kind of stew previous unknown in Israel: A former finance minister hooks up with a foreign millionaire and a private-government company in order to manage the public’s money. Like the wedding in Morocco, it’s doubtful that the Gulf public will pay it any attention.
It could be an attractive business opportunity. Israeli institutional investors will have a bridge to investment opportunities in the Gulf that have been denied them until now. After all, the purpose of peace with the Emiratis is to create opportunities like this.
Nevertheless, it’s important to ensure that the standards that apply in the Israeli capital market to protect the public’s money – transparency in decision-making and maintaining the “Great Wall” between the management of private and public money – will be adhered to in joint undertakings with our new Gulf business partners.
There is cause for concern. All the big corporations in the Persian Gulf – the banks, ports, real estate developers and infrastructure companies – are controlled by the same ruling families that control the government. That stands in contrast to Israel, a democratic state that has sought to erect a wall between government and business.
But in the past few months that principle is being tested, as business and economic ties between Israel and the Gulf develop at breakneck pace. That manifested itself last month when the Israeli government-owned company Europe Asia Pipeline Co. signed a memorandum of understanding with MED-RED Land Bridge. The latter is a private company controlled by the Emirati royal family, Israeli-based AF Entrepreneurship, which is controlled by Yona Fogel and Malachi Alper; and Lubber Line, which is based in the Gibraltar tax haven and backed by the Moroccan Jewish financier Yariv Elbaz. The deal raised questions about the role.
The bottom line: It can’t be expected that the Gulf sheikhdoms will take it upon themselves to honor Israeli norms on government and business, but neither should Israel start taking on Gulf norms.