Israeli business in Saudi Arabia emerges from the shadows at investment conference

RIYADH, Saudi Arabia—Israeli businessmen spoke at Saudi Arabia’s premier investment conference this week, a clear but subtle sign of burgeoning trade ties and Israel’s growing acceptance in the kingdom, though the two countries still have no formal ties.

The changing dynamism of the Middle East was showcased in the marble halls of the Ritz-Carlton Hotel in Riyadh, host of the Future Investment Initiative, where businessmen in kippahs, the brimless caps worn by religious Jews, could be seen as they do Saudis shaking hands in traditional white robes.

Saudi Arabia, which hosts Islam’s holiest sites and bans the practice of any other religion, has long shunned public contact with Israel and says it will not follow neighbors like the United Arab Emirates in establishing diplomatic ties until the Palestinians have one of their own get state . But in recent years Saudi Arabia has harbored Jewish leaders in an interfaith surge in tolerance and deepened covert business and security ties with Israel, which shares a common rival with the kingdom in Iran.

On Thursday, the final day of the conference, the head of one of Israel’s top banks said he wanted to invest in Saudi Arabia’s fintech industry.

“The possibilities are amazing,” said Bank Leumi’s Samer Haj-Yehia at a panel discussion that included the chief executive of Saudi Export-Import Bank. He said he considered the Saudi economy to be “very healthy, in contrast to other economies around the world, and the outlook for the future is very positive”.

After the panel, Dr. Haj-Yehia, an Arab citizen of Israel, issued a statement. Bank Leumi said he was personally invited by the conference organizers and called the visit a historic step in strengthening economic ties with the Gulf States. However, the bank’s website remains inaccessible from Saudi Arabia, as do many Israeli websites.

Jonathan Medved, chief executive of online venture investment platform OurCrowd, was more direct. “We are proud to come from a small country just next door called Israel,” he said on a panel that included two Saudis.

In an interview, Mr Medved said it was becoming normal for Israeli companies to operate in the kingdom, compared it to the fall of the Iron Curtain separating Western Europe and the Soviet bloc, and predicted that commercial opening would be followed by political détente. State-owned oil company Saudi Aramco already has investments in US subsidiaries of OurCrowd, he said.

“The fact that the business community is already getting involved at different levels and people like me and Samer are being invited to speak is an extraordinary sign and quite exciting,” he said. “But I think in general we want to do more and talk less.”

The Future Investment Initiative conference was held this week in Riyadh, Saudi Arabia.


Fii Institute/Zuma Press

Other Israelis, including a brother of former Israeli Prime Minister Naftali Bennett, who runs an electric truck company, and Jewish Americans were among the roughly 7,000 participants at the conference, organized by the Saudi sovereign wealth fund, of which Crown Prince Mohammed bin Salman is the chairman.

In an obvious sign of the uneven pace of change, an Israeli-American rabbi, who has appointed himself chief rabbi of Saudi Arabia without government approval, said the Saudi Royal Guard refused him entry to the conference without explanation.

“It’s very strange,” said Rabbi Jacob Herzog, who has repeatedly entered the kingdom on a tourist visa over the past year.

Organizers and Saudi officials did not respond to requests for comment.

Saudi Arabia has been more reticent about Israel than the United Arab Emirates and Bahrain, which excluded the Palestinians from their normalization agreement known as the Abraham Accords.

The kingdom has a larger population that does not fully support normalization and it needs to consider how its actions will be perceived by the wider Arab and Muslim world, who look to it for leadership. Princess Reema bint Bandar, the Saudi ambassador to Washington, said in July during President Biden’s visit to Saudi Arabia that Riyadh is seeking a two-state solution to the Israeli-Palestinian conflict, not normalization.

Mr. Biden’s trip, which included Israel and Saudi Arabia, resulted in deals that allowed commercial planes to extend rights to fly over the kingdom from Israel and gave Saudi Arabia full control of two strategic islands in the Red to get sea.

Isaac “Yitz” Applebaum, an American who has worked in Israel’s venture capital sector for 20 years and now leads a Saudi sovereign wealth fund’s efforts to promote private equity in the kingdom, said the Saudis are testing the waters by inviting Israelis to speak at the summit, that Riyadh has tried to use as an annual sign of the progress of the economic and social changes that Prince Mohammed first announced in 2016.

“Things don’t happen by accident in this country,” said Mr. Applebaum, who has advised several Saudi ministers and spoke at the conference.

He said it has become easier to talk to Saudi officials about Israel after news leaked of a secret meeting between Prince Mohammed and then-Israeli Prime Minister Benjamin Netanyahu in 2020.

Avraham Berkowitz, an American who advises companies on public-private partnerships, said he was careful that his demeanor — he wore a kippah throughout the conference — didn’t send out unintended signals, so he avoided initiating talks with Saudis . He said many of them approached him anyway and thanked him for coming.

“It will become more normal to see members of the Jewish people who came anyway but are more comfortable now,” he said.

President Biden met with Crown Prince Mohammed bin Salman in Saudi Arabia on Friday as the US seeks to reshape ties and get the kingdom to help control oil prices. Biden said he confronted the crown prince about the killing of journalist Jamal Khashoggi. Photo: Bandar Aljaloud/EPA/Shutterstock

Write to Stephen Kalin at [email protected]

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