The fund, based in Jerusalem and established with a commitment from the three states involved to mobilize over $3 billion in investments, is meant "to identify and initiate strategic projects with a high developmental impact, including those that catalyze economic growth, improve standards of living, and create high-value, quality jobs," the joint statement on the Abraham Fund says.
The fund is already involved in two projects. The first is "MedRed:" Israeli pipeline company EPAC had just struck a preliminary deal to transport oil from the UAE to Europe via a pipeline connected the Red Sea from Eilat to the Mediterranean at the Ashdod port. The second is an effort to modernize checkpoints for Palestinians in Israel and Jordan.
The official statement kicking off the Abraham Fund says it is "an integral part of the peace accord signed by the UAE and the State of Israel... and demonstrates the benefits of peace by improving the lives of the region’s peoples."
Much has been said about the Trump administration bucking the common foreign policy wisdom in fostering peace between Israel and Arab states even though peace with the Palestinians does not seem to be on the horizon, and about how this strengthens the US-aligned regional alliance against Iran.
But what if this peace agreement, and now the Abraham Fund, serves an additional American foreign policy interest in another part of the world?
This week, foreign affairs Prof. Walter Russell Mead - who Politico called a "Trump whisperer" - wrote in his Wall Street Journal column, penned after conversations with US National Security Adviser Robert O'Brien and UAE Ambassador to the US Yousef al-Otaiba: "One suspects Washington would welcome having America's Gulf allies displace China as an important source of foreign investment in Israel."
Less than an hour after the Abraham Fund was announced, Mark Dubowitz, CEO of the Foundation for the Defense of Democracies, a think tank thought to be influential in the Trump administration - so much so that Iran sanctioned FDD and Dubowitz for its advocacy of sanctions against the Islamic Republic - tweeted: "Hopefully this will also help displace Chinese investment in Israeli critical infrastructure assuming the criteria allow for investment in enhancing Israeli economic resiliency."
Hopefully this will also help displace Chinese investment in Israeli critical infrastructure assuming the criteria allow for investment in enhancing Israeli economic resiliency. https://t.co/MQSTTzyrv9— Mark Dubowitz (@mdubowitz) October 20, 2020
Asked if these analysts who seem to have US President Donald Trump’s ear are right, and if discouraging Israel from relying on Chinese investments for its critical infrastructure was a consideration in the Abraham Fund’s founding, a State Department source said only: “Reducing dependence on the Chinese Communist Party is a good thing.”
In recent years, the US has warned Israel against allowing Chinese involvement in critical infrastructure projects, such as desalination plants, ports and the planned Tel Aviv light rail. This year, the US ramped up pressure on this front around the world, and that is not expected to change regardless of who wins the presidential election next month.
Israel has made some effort on this front, creating a committee to evaluate foreign investments – though American and Israeli experts have warned that the panel does not have the authority to make a difference – and quietly rejecting Chinese companies on projects like the Sorek 2 desalination plant.
The US has zeroed in on communications infrastructure as being potentially dangerous in terms of Chinese intelligence operations, and Communications Minister Yoaz Hendel said he “sees eye to eye” with the Americans on that issue. Israel is not yet part of the US State Department's "Clean Network" of countries who meet their standards of data privacy and protection of sensitive information "from aggressive intrusions by malign actors, such as the Chinese Communist Party,” but a Trump administration source said in August that he was confident Israel would soon commit to exclude Chinese technology from its 5G mobile networks.
Still, two months later, Israel isn’t a “clean” country yet, and there still is no truly robust system for ensuring that Chinese investments in infrastructure or Israeli tech companies could not be used for malign means.
But the UAE and Israel made peace just over two months ago, and the potential for economic cooperation, especially Emirati investments in Israel, is a central message all the countries involved have relayed repeatedly. Those investments could very well come in place of Chinese ones, and companies based in Dubai may win tenders that Beijing could have won handily in the past. The Abraham Fund is already involved in a pipeline project.
At the same time, the UAE is a wealthy country, but a small one without the same broad range of industries as China. In fact, the UAE had welcomed Chinese partnerships in its own infrastructure projects.
Plus, the UAE is one of about a dozen countries with what Beijing calls a "comprehensive strategic partnership" with China. Crown Prince of Abu Dhabi Mohammad bin Zayed met with Yang Jiechi, a member of the Chinese Communist Party's politburo, earlier this month, and they reaffirmed that partnership.
Still, as a US ally, Abu Dhabi could face pressure of its own to reduce its entanglements with Beijing. In addition, China and Iran, a major threat to the UAE as well as Israel, have been negotiating a strategic partnership of their own that would include military cooperation.
China may not have been foremost on anyone’s mind when the US fostered normalization between Israel and the UAE, but it seems like there is potential for weakening Beijing’s economic ties with Jerusalem in the new relations that would be an added bonus for Washington.
The views/opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Al Bawaba Business or its affiliates.
