The Peace Treaty between UAE and Israel has fortunately been the highlight of the year 2020 and reason to celebrate for citizens and residents of both nations. Lal Bhatia, Chairman of the Dubai-based investment advisory Hilshaw Group, shares his views on the landmark event
Who could've thought that we would remember 2020 for anything other than the dreaded pandemic. But as grand design of things would have it, we will now forever have another, and perhaps fonder, recollection of the year that could've been otherwise quite bizarre.
The past year has been a combination of tragedy and the hope that pacifies it. While we saw one of the biggest challenges faced by mankind in the modern age, we also experienced the beginning of an almost poetic resolution to what was previously the cause of the region's instability.
For all that we have lost in 2020, I hope that we find something greater to compensate us or perhaps over-compensate us for it.
The commendable move by the leadership of both countries exemplified that more issues have been resolved by open channels of communication than otherwise. Their broad-spectrum farsightedness has truly sown the seeds for a peaceful future for the whole region and a better world for the coming generations.
On what the Peace Treaty means to the world.
To answer what the Abrahamic accord means to the region and the world, I say that for one, it was long overdue. When it came down to the survival of the species, we saw the whole world come together for once. Because we realised after all the differences that we may believe we have, it is more or less the same things that are the cause of our pain and it is often that the same things fuel our happiness.
But then again, it has never been about seeking similarities, but rather respecting differences.
This Peace Treaty in fact symbolises that our commonalities are more important and peace always wins over conflict.
Now more than ever before, we need to think about collaboration rather than competition. I hope and believe that this alliance between the UAE and Israel is the beginning of a substantial change across the whole region, politically and economically.
On its effects on the macro economy of the two nations.
Prosperity is a by-product of peace and through this momentous resolution, we can expect all sectors benefitting in the short and long term alike.
In 2018, the UAE was the number 28 economy globally in terms of GDP, number 26 in total exports, 21 in total imports and ranked 21 in terms of GDP per capita, according to OEC.WORLD. The UAE's top exports during the same year included $58.1 billion of crude petroleum and $32 billion of refined petroleum, followed by $37.8 billion of gold, jewellery and diamonds. The country's top imports included gold, broadcasting equipment, jewellery, refined petroleum and cars for the same period.
Israel, according to the same source, was the number 31 in the world in terms of GDP, 51 in total exports, ranked 43 for total imports, and was number 25 in terms of GDP per capita.
The top exports of Israel are diamonds (at $10.7 billion), packaged medicaments, refined petroleum and integrated circuits, while the country's top imports included crude/refined petroleum, diamonds and cars. (source https://oec.world)
One cannot help but notice the visible synergy between the trade trends of the two countries and it is almost yin and yang for the keen analyst.
However, there is much more to economic alliances than just commodity exchange. I firmly believe that the knowledge, technology and opportunity export from both ends will surpass common trade indexes in value.
The most obvious industries to benefit from the newfound alliance would be technology, healthcare, banking, logistics, energy, hospitality, travel and tourism. Real estate, which goes hand-in-hand with all economic and population influxes, will emerge the winner.
On the economic forecast for the year 2021.
Being a Dubai resident, my perspective will come from the environment around me. According to a recent report on the real estate industry by Data Finder, the last few months of 2020 were outstanding for the secondary market with November and December breaking the secondary/ready market transactions records for the past seven years.
This is testament to the fact that countries that venture into the post Covid-19 era the earliest will be a part of the economic successes of 2021. The way that the UAE has handled the pandemic, while maintaining buoyancy for all its business sectors, is nothing short of impressive.
Moreover, the 100 per cent business ownership and long-term visas are all supplementary to placing UAE in the 'pole position' for the what I call the 'post-Covid era'.
Add to that the fact that the country will be hosting the first event since 2020 of global economic significance with the Expo 2020 and things become more interesting. The year 2021/22 looks very promising for the UAE and with the newfound brotherhood, the region's growth will be exponential.
Hilshaw Group transforms investment potential through experience, insights, next generation technologies, market data and analytics.
Founded in 2017, it has offices across Thailand, Italy and Russia with its Investment and Acquisition Head Quarters in Dubai, UAE.