Start-Up Nation Central CEO on building economic ties with Bahrain
December 07, 2022
Avi Hasson, who accompanied Israeli President Isaac Herzog on his recent trip to the Gulf, explains why relations with Bahrain have been slower to take off than those with the UAE.
Israeli President Isaac Herzog visited Bahrain on Sunday. While his trip included a visit to the United Arab Emirates, the Bahrain leg of the journey captured more attention as it was the first official visit by an Israeli head of state to that Gulf kingdom.
Making the visit doubly significant is that Bahrain has been slower to enjoy the economic fruits of the Abraham Accords than the United Arab Emirates, despite also being one of the original signatories. Israel signed a free trade agreement with the UAE in May; it is still working on one with Bahrain. And trade between Israel and the UAE reached $885 million last year, compared to only $7.5 million between Israel and Bahrain.
Spurring business ties was a central goal of Herzog’s trip. The two countries would work to make sure “the benefits of regional friendly relations reach each and every Israeli and Bahraini,” he wrote in an op-ed published in Bahrain ahead of his visit.
“The free trade agreement that we hope to conclude in the foreseeable future will unleash an outburst of trade, as Israelis discover Manama as their gateway to the Gulf, and as Bahrainis discover more opportunities for business with Israel’s dynamic, innovative economy,” he wrote.
Accompanying Herzog on his state visit was an economic delegation, including Avi Hasson, CEO of Start-Up Nation Central, an Israeli nonprofit that helps facilitate business and investment opportunities in the high-tech space.
Hasson, who has served in the role for just over a year, was formerly chief scientist of Israel’s Economy Ministry. He sat down with JNS to talk about the president’s Gulf trip, and specifically Bahrain.
Q: While UAE economic relations have really taken off, Bahrain-Israel relations have been slower to get off the ground. Why is that?
Hasson: I think the main reason is simply the size of the economy. Bahrain is a much smaller country, both in its population as well as in economic activity and capabilities. It’s not surprising that there was a rush at first to Dubai and Abu Dhabi from the Israeli side seeking opportunities with the large players there.
But Bahrain actually has an advantage over the UAE in at least two areas. One is its tighter relationship with Saudi Arabia, its nearest neighbor. It can act as a gateway to that market. The second is that, if you look historically, Bahrain started earlier than the UAE in its wealth creation. The UAE caught up and pulled ahead but Bahrain built up assets over the decades in specific areas like financial services. They have very supportive legislation and taxation policy. They’re really trying to attract investors.
Bahrain sees a lot of opportunities working with Israel. They’ve identified five areas of focus where they want to do more: financial services, manufacturing, logistics, information communication technology and tourism. A lot of the work Start-Up Nation Central does in Bahrain is following the strategic areas important to them and trying to match them with Israeli companies.
Q: Are there cultural or other differences contributing to the slower pace of economic relations?
A: Bahrain is more conservative, though definitely less so than the Saudis. That said, you have to remember that they were one of the first countries to jump on the Abraham Accords wagon. There were existing ties and even some representatives of Israel on the ground for many years before. Also, Bahrain is a place where there had been a Jewish community for centuries. The Jews never suffered, unlike in neighboring countries. They weren’t kicked out or their property taken.
Q: Was this trip partly motivated by concern about the pace of relations?
A: I don’t think the timing was specifically for that reason. I’m sure at some point President Herzog will also visit Morocco. He sees a lot of value and potential in the accords, and I think he sees it as his role to try to promote these relationships. These high-profile visits create a personal relationship between the president and these countries’ leaders.
Q: The Washington Institute for Near East Policy put out a poll showing a loss of public support for the Abraham Accords across Arab and Muslim countries. Have you encountered a loss of enthusiasm?
A: I am not aware of that poll, but we haven’t noticed any resentment, or anything of the kind, from the Bahraini leadership. What we sensed during the visit is a very strong desire to engage more. We also met the Emirati leadership during our trip. The commitment of their leadership is super strong.
And I can tell you from our experience dealing with these countries all the time that this is also true of the people. It’s very different from the agreements we have with Egypt and Jordan, which were done on a leadership level but would never win a popular vote. There’s strong and wide support for the Accords. Now is that sustainable? I think it’s our job to put substance into the accords, to increase the level of bilateral activity so that people feel the impact; to make sure that the accords are well received, not because their leadership says it’s the right thing to do, but because more and more people experience the fruits of the accords firsthand.
Creating these economic ties can really cement, nurture and create long-term sustainable relationships, which I think we all agree are strategic to Israel. The Abraham Accords are not a minor event. They are a tectonic event. And I think it’s our job, it’s our mission, to make sure that they bear fruit, that we maximize the potential both for the countries who signed the accords, and for those countries still on the sidelines and looking very carefully to see the results.
From an economic perspective, the Middle East can really be the next European Union. As a region, we can play a very interesting role in global trade. Seeing the president of the State of Israel, the Jewish state, received by prominent Arab leaders in such a way, I thought it’s a remarkable opportunity. We just cannot lose this opportunity.