One year later: economic impact of the Abraham Accords


Retired local physician Dr. Herzl Melmed recently discussed the impact of the Abraham Accords in a presentation to the local chapter of Hadassah, a charitable organization that supports the renowned Hadassah Medical Center of Israel that provides medical and surgical care to 1.5 million people annually and where Jewish and Arab medical personnel famously work side-by-side caring for patients of all nationalities. Melmed, who is from South Africa and has lived in Denver for 44 years, described Hadassah Hospital as “the pride of Israel. It is a microcosm of what everybody would like Israel one day to be, where Jews and Arabs work together and are patients together.”

On September 15, 2020, an agreement was signed between the State of Israel and the Kingdom of Bahrain to “establish full diplomatic relations, to promote lasting security, to eschew threats and the use of force, as well as advance coexistence and a culture of peace.” On the same day, Israel and the United Arab Emirates (UAE) agreed to the “establishment of peace, diplomatic relations and full normalization of bilateral ties.” On December 22, 2020, Morocco and Israel agreed to “establish full diplomatic, peaceful and friendly relations.” Sudan also issued a statement of support for the process. 

Dr. Melmed described the Abraham Accords as, “the most important diplomatic achievement of the past decades; not the cold peace that (Israel) had with Egypt and Jordan, but a warm, real peace with Arab countries accepting Israel into the Arab Middle East.” He reported that there has been “nearly $1 billion in trade” between Israel and the UAE in the past year in fields including aviation, energy, technology, health, tourism, and diamonds. He added that the UAE is the fifth-largest purchaser of diamonds in the world and Israel is the seventh, thus the two countries working together have become a very significant force in the diamond industry. In addition, Melmed reported, the UAE has put aside $10 billion in a special fund for Israel.

The reason the UAE, Bahrain, Morocco and Sudan were motivated to make peace with Israel, Dr. Melmed explained, is that they are all majority Sunni Muslim nations, worried about the rise of Iran, a Shia Muslim nation and “its move toward a nuclear weapon.” The United States’ ongoing withdrawal from the Middle East, including its recent withdrawal from Afghanistan, has worried our Arab allies. “They see the rise of Israel as a military and technological power that is willing to fight against Iran,” which is a common enemy of both Israel and the Sunni 

A Jewish doctor and Arab nurse care for a newborn infant at Hadassah Hospital.

Muslim nations. Under President Trump, the U.S. offered inducements to help smooth the way for normalization. The UAE was to get the ability to buy F-35 fighter jets and other military equipment, the U.S. offered to recognize the Western Sahara for Morocco and to lift sanctions on Sudan. However, as of the last available report on the subject in August, the sale of the F-35s was still somewhat uncertain due to concerns from some Members of Congress and a report this past June quoted Sudanese officials as saying they have been disappointed with the level of U.S. investment to date in their country.

Intel has large facilities in three different locations in Israel.

Historically, the Arab states refused to consider normalizing relations with Israel until peace was achieved between Israel and the Palestinians. However, that process has not moved forward for many years and the signing of the Abraham Accords seems to signal that several Arab states have decided they cannot afford to wait indefinitely.

For Arab states that are primarily oil producers, Israel’s high-tech and start-up economy is also enticing because it provides an opportunity for economic diversification. According to Melmed, there are 362 major international companies with research and development operations in Israel. They include recognizable names like Google, IBM, Microsoft, Pfizer, Oracle, SAP, Motorola, Cisco Systems, HP, and Siemens. These companies employ over 60,000 Israelis and provide nearly 20 percent of the country’s total tax revenue.

This IBM building is located in the Haifa region of Israel.

An important result of the normalization of relations is that Israel is now allowed to fly over Saudi Arabia to the UAE, a crucial benefit that stimulates trade, not only between Israel and the UAE, but between Israel and Japan and China as well. Access to the UAE also provides Israel much easier military access to Iran, should it become necessary to act in the event that it becomes apparent that Iran is moving toward developing a nuclear weapon. 

In an interview with CNN in April, Prince Faisal bin Farhan, foreign minister of Saudi Arabia was quoted as saying that normalization with Israel would bring “tremendous benefit” to the region as a whole, however he tied the possibility to the Israeli-Palestinian peace process, which remains stagnant. Saudi Arabia is largely viewed as the leading Sunni Arab state in the Middle East with 34 million people.