Businesses Must Now Strengthen Regional Stability Through Commerce
In a sign of a continuing positive approach to United States foreign policy in the Middle East, Secretary of State Antony Blinken recently stated his expectation that other states will join the United Arab Emirates and Bahrain in establishing full diplomatic ties with Israel, a positive signal for the regional rapprochement formalised in last year’s Abraham Accords. The Accords were a significant step towards normalising relations between historically hostile states in the Middle East and are without a doubt former President Donald Trump’s greatest foreign policy success during his solitary term in office.
While positive noises from high-ranking U.S. officials are always welcome, policymakers are notoriously fickle and often lack the will for sustained engagement. It is therefore crucial Blinken’s words are backed with action – specifically action that demonstrably reinforces the Accords and promotes peace and stability across the region.
That said, national governments alone will not transform the bonds between countries. “The capacity to resolve shared challenges will rely also on the contributions of citizens, civil society, the private sector and political actors below the level of the state,” according to Dr. Robin Niblett of Chatham House, a leading think tank based in London.
The expansion of business ties is the next logical step as governments look to build on the foundations laid by the Abraham Accords. The interaction of citizens through trade, joint ventures, and shared operations is ultimately the best way to build strong and lasting bonds across cultures, and the private sector has a leading role to play in consolidating this major shift in international affairs.
Beamed through this prism, a recent joint UAE-Israeli consortium purchase of London-listed payments firm Finablr is one of the most important transactions in the Middle East, one that demonstrates that cooperation and collaboration in business can consolidate political agreements. The money transfer sector plays a critical role in the economies of the region, allowing millions of people to swiftly and easily move money into and out of the region.
This consortium collaboration between Prism Group AG, led by Arab-Israeli businessman Amir Nagammy, and UAE-based Royal Strategic Partners (RSP) offers a strong basis for an ongoing partnership that bridges the political divide – if, that is, the significant regulatory hurdles in the deal’s way are overcome.
Last year, Finablr disclosed over $1 billion in hidden debts related to its previous owner, the Indian billionaire BR Shetty, which pushed the firm to the brink of collapse. Without the intervention of the Prism/RSP consortium, 6,000 jobs would have been lost, and investors and creditors would have faced wholesale write-downs. The only reason Finablr has not entered into administration or insolvency is the consortium bid, which offers the best chance of a return of any kind to shareholders.
The consortium is making progress, despite significant headwinds. As well as providing financial cover for Finablr until the acquisition is complete, the purchasers are also discussing a merger with BFC Group Holdings, another major regional player in the sector, a deal that would create a market-leading company.
The ambition demonstrated by the consortium is clearly only possible through the expertise, experience, and networks the different members bring from both the Gulf and Israel. The deal has unique complications but, by working together strategically in a mature, collaborative manner, the Prism Group/RSP consortium is showing investors and governments that major obstacles can be overcome with the right team and approach. It is a model for others to follow.
The hope in the region is certainly that others will follow suit, and that deals are already being discussed across most sectors. One thing is clear: The impact that economic growth has on peace and stability is well documented, and it is evident that both the Emirati and Israeli governments are working hard to provide support for intra-regional trade.
Of course, one deal won’t be enough to overcome decades of mistrust and distance. Israelis and Arabs still operate across a divide, often regard each other with suspicion, and frequently lose out on the huge range of opportunities that being regional neighbours affords each other. But business now has a window of opportunity to normalise ties and boost regional stability.
Following on from the ambition of the Prism Group/RSP consortium, more businesses in both the UAE and Israel should look at the new opportunities that the rapprochement presents to further cement ties between the two countries.