On WhatsApp group chats this weekend, more than a few Israelis were already talking about family vacations in the United Arab Emirates, after Israel and the federation of seven emirates announced the normalization of relations Thursday. “Will the next family reunion be in Dubai? “Has Dad already made reservations?” “What floor are our rooms on in the Burj Khalifa?” “Do you have to wear a burka?”
The excitement at the prospect of flying to Dubai, staying at a hotel in the world’s tallest building and shopping at megamalls is understandable. Prime Minister Benjamin Netanyahu spoke Thursday about travel and tourism. But the area where Israel stands to most to gain economically from ties with the UAE is defense and cybersecurity.
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The UAE’s annual defense budget is estimated to be about $23 billion and growing, with about $20 billion of that going to arms procurement in the United States.
Just hours after normalization, sources in the Israel defense industry were talking about how the UAE has the potential to offset the loss of sales locally due to the terms of the current U.S. aid agreement. They said the emirates are an ideal partner, with deep pockets and an authoritarian regime that can make quick decisions on arms purchases.
Last month, the UAE company Group 42 agreed to partner with Israel’s state-owned Israel Aerospace Industries and Rafael Advanced Defense Systems to develop technologies to help fight the new coronavirus. But much more is going on behind the scenes, not just by old-line defense companies like IAI, Rafael and Elbit Systems, but also pure tech players such as Aeronautics Defense Systems (drones), AnyVision (face recognition) and NSO Group Technologies (cyber surveillance).
The Israeli startup Insights: Powering Collective Thinking, for example, provides the community engagement platform that Dubai uses to consult with the public on civic issues. Israeli businessmen such as Mati Kochavi, David Meidan, Avi Leumi and Avihai Stolero have been active in the Gulf for years. They sell intelligence-gathering gear, drones, reconnaissance planes, F-16 upgrade services and cybersecurity-hacking technologies.
Estimates are that Israeli exports of arms and cybersecurity technology to the UAE comes to several hundred million shekels annually, all of it occurring under the radar in the absence of formal diplomatic relations.
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Some people in the industry actually regard normalization as a problem because now everything, including deals they would prefer to remain behind closed doors, will be coming out into the open. Still, most industry sources said normalization is likely to lead to an increase in the sale of arms, cybersecurity and command-and-control systems to the Gulf powers.
Around five years ago, some Gulf governments expressed an interest in Israel’s Iron Dome anti-missile system but in the end pulled back from a deal. Now, as the threat of an Iranian attack on oil installations has become very real, they will reconsider Iron Dome or other Israeli anti-missile technology.
Israeli Defense Ministry sources over the weekend couldn’t say if and when it would be sending a delegation to the UAE. Much depends on how bilateral relations develop as well as what the United States has to say. Israel and the UAE are two of the biggest buyers of U.S. military gear, and Washington will not stand by idly as the two solidify ties. It’s doubtful that the U.S. defense industry is excited by the agreements, which suddenly creates a new competitor for fat UAE contracts.
Netanyahu has assigned Meir Ben-Shabbat, the head of the National Security Council, to prepare for follow-on talks with the UAE. But given how complex the issues will be, Ben-Shabbat will have no choice to bring the foreign and defense ministries into the picture, even though they are both led by cabinet members from Kahol Lavan. A final agreement can’t be closed by U.S. President Donald Trump, his adviser Jared Kushner and Israel’s Prime Minister’s Office alone.