September 2014
Covert GCC-Israel trade links go back many years, but in a complicated regional landscape predicting future trends is difficult
In the Israeli town of Galilee, known to its mostly Arab population as Al Jalil, there stands a tribute to peace. During protests against Israel’s expropriation of land for settlement and security purposes in 1976 - since commemorated annually as Land Day on 30 March - six Arab youths were killed by Israeli security forces in the city of Sakhnin in Lower Galilee.
After a 2005 visit by the Qatari National Olympic Committee secretary general Shaikh Saoud bin Abulrahman al Thani, Qatar sponsored the construction of a $6 million sports stadium, since named Doha Stadium, to improve sporting conditions in Sakhnin.
That an overt symbol of Gulf investment in Israel named after a GCC capital stands today in Israel rankled some senior Israeli officers long before Qatar’s fall from favour for its support of fellow Muslim Brotherhood ideologue Hamas.
“It’s the least you can do for Qatar,” Hebrew daily Yedioth Ahronoth quoted Arab-Israeli member of parliament Ahmed Tibi following the opening of the stadium in 2006. In July this year, a few weeks after the latest conflict in Gaza started, Israeli business daily Globes reported that Qatar had donated $500,000 to Galilee-based football club Bnei Sakhnin.
The newspaper reported that the pledge to donate eight million shekels ($2.2 million) each to Bnei Sakhnin and Maccabi Ahi Nazareth Football Club, was made before the latest conflict started.
“Qatar is in fact the first and only Arab state that has officially made an investment in Israel proper,” says James Dorsey, a senior fellow at Singapore-based S Rajaratnam School of International Studies.
While other Gulf states have not yet named monuments after their capitals in Israel, trade relations continue in the background.
While latest figures remain unavailable owing to the secretive nature of trade, Tel Aviv-based Institute for National Security Studies research fellow Yoel Guzansky says that trade continues today “under the table” in many spheres.
“Israel sees the Gulf as a potential market for irrigation, water desalination, even medicine but also this is a security-related kind of relationship,” he says.
“It’s being reported that Israeli security companies from aviation to armaments are selling their products in the Gulf, usually by other means, and the Gulf is the biggest market in the world for weaponry, so it has the potential for deeper commercial connections.”
Guzansky cited in his 2011 report in the Israel Journal of Foreign Affairs that Israeli exports to the Gulf in the first nine months of 2008 amounted to $25 million.
Trade links between Israel and the Gulf states have existed much longer than most realise, adds Becca Wasser, a research analyst at the International Institute for Strategic Studies in Washington.
“Israel had established two trade missions in Muscat and Doha by 1996. Despite a temporary closure during the second intifada, they remained open until 2009,” she says.
“Qatar offered Israel the opportunity to re-open the trade mission in Doha in 2010, but Israel declined. Currently, Israel has a diplomatic and trade office in an unnamed Gulf state.
“There have also been Israeli trade delegations to the Gulf, such as a May 2013 delegation to Doha, and discussions of Gulf investment in Israeli hi-tech firms.”
Last year, the Israeli foreign affairs ministry launched a virtual embassy to the GCC states under the Twitter handle ‘Israel in the GCC’, prompting interesting discussions with Gulf citizens using the platform. Since the latest offensive in Gaza began, the handle has mostly been tweeting war updates from the Israeli Defence Forces.
Emailed questions to foreign affairs ministry spokesman Yigal Palmor on whether the virtual embassy was still operative, and the potential for a future trade mission went unanswered.
The global boycott movement against Israeli or Israel-aligned products and firms has gathered steam following the latest conflict, in which 2,125 Palestinians, 68 Israelis and a Thai national were killed.
However, despite restrictions, trade has continued through Israeli firms registered in the West, and products made in Israel but packaged without an Israeli label have been allowed to pass, says Guzansky.
The Gaza conflict, however, may change attitudes towards Palestine and Israel, especially for Qatar, which despite maintaining the most dynamic trade relations with Israel had apparently disappeared into the background as an indefinite ceasefire, sponsored by Egypt, brought current hostilities to an end in late August.
However, nearly a week before the ceasefire agreement London-based Al Hayat newspaper reported that Qatar had threatened Hamas chief Khaled Meshal with expulsion from his Doha refuge, if he accepted the Egyptian proposal for ceasefire. Israel blames Qatar for bankrolling Hamas, which has been governing Gaza since 2007 and for sponsoring “terror tunnels” used to store weapons and launch attacks against Israel.
Israeli president Shimon Peres accused Qatar of being “the world’s largest funder of terror”, while an Israeli official quoted by the Jewish Telegraphic Agency (JTA) said that Doha, “instead of contributing to the development of the area, is contributing to terror in the region.”
A joint mistrust of Iran and sharing of intelligence led the Gulf Co-operation Council (GCC) and Israel to see eye-to-eye, but with disunity among Gulf ranks, the dynamics of a covert economic relationship may be changing.
As Qatari money into the Palestinian Territories undergoes scrutiny for terror financing, what is the future then of the Gulf’s state’s football diplomacy?
“There’s no doubt that at the moment there is a strong anti-Qatar sentiment in Israel,” says Dorsey, who also writes on the politics of Middle East football in his blog.
“But I don’t think they would go as far as blocking the investment, because there is mileage in an Arab state that has no diplomatic relations or peace treaty with Israel, willing to put money into Israel, even if it’s inside the Palestinian sector.”
As Egypt opens the Rafah border crossing with Gaza, under the terms of the ceasefire it brokered, it remains to be seen if Qatar will play any future role in the economy of the troubled region.
“As part of the rehabilitation that the Egyptians and Israelis are trying to formulate right now, they would love to see Saudi and Emirati money flowing in to replace Qatar,” says Guzansky.
“Qatar won’t be able to dance at both parties at the same time anymore and I guess this Qatari policy, which is not new, has been something of an irritant for its neighbours as well.
“They tried to do that for a few years. I guess the party is over.”
In the Israeli town of Galilee, known to its mostly Arab population as Al Jalil, there stands a tribute to peace. During protests against Israel’s expropriation of land for settlement and security purposes in 1976 - since commemorated annually as Land Day on 30 March - six Arab youths were killed by Israeli security forces in the city of Sakhnin in Lower Galilee.
After a 2005 visit by the Qatari National Olympic Committee secretary general Shaikh Saoud bin Abulrahman al Thani, Qatar sponsored the construction of a $6 million sports stadium, since named Doha Stadium, to improve sporting conditions in Sakhnin.
That an overt symbol of Gulf investment in Israel named after a GCC capital stands today in Israel rankled some senior Israeli officers long before Qatar’s fall from favour for its support of fellow Muslim Brotherhood ideologue Hamas.
“It’s the least you can do for Qatar,” Hebrew daily Yedioth Ahronoth quoted Arab-Israeli member of parliament Ahmed Tibi following the opening of the stadium in 2006. In July this year, a few weeks after the latest conflict in Gaza started, Israeli business daily Globes reported that Qatar had donated $500,000 to Galilee-based football club Bnei Sakhnin.
The newspaper reported that the pledge to donate eight million shekels ($2.2 million) each to Bnei Sakhnin and Maccabi Ahi Nazareth Football Club, was made before the latest conflict started.
“Qatar is in fact the first and only Arab state that has officially made an investment in Israel proper,” says James Dorsey, a senior fellow at Singapore-based S Rajaratnam School of International Studies.
While other Gulf states have not yet named monuments after their capitals in Israel, trade relations continue in the background.
While latest figures remain unavailable owing to the secretive nature of trade, Tel Aviv-based Institute for National Security Studies research fellow Yoel Guzansky says that trade continues today “under the table” in many spheres.
“Israel sees the Gulf as a potential market for irrigation, water desalination, even medicine but also this is a security-related kind of relationship,” he says.
“It’s being reported that Israeli security companies from aviation to armaments are selling their products in the Gulf, usually by other means, and the Gulf is the biggest market in the world for weaponry, so it has the potential for deeper commercial connections.”
Guzansky cited in his 2011 report in the Israel Journal of Foreign Affairs that Israeli exports to the Gulf in the first nine months of 2008 amounted to $25 million.
Trade links between Israel and the Gulf states have existed much longer than most realise, adds Becca Wasser, a research analyst at the International Institute for Strategic Studies in Washington.
“Israel had established two trade missions in Muscat and Doha by 1996. Despite a temporary closure during the second intifada, they remained open until 2009,” she says.
“Qatar offered Israel the opportunity to re-open the trade mission in Doha in 2010, but Israel declined. Currently, Israel has a diplomatic and trade office in an unnamed Gulf state.
“There have also been Israeli trade delegations to the Gulf, such as a May 2013 delegation to Doha, and discussions of Gulf investment in Israeli hi-tech firms.”
Last year, the Israeli foreign affairs ministry launched a virtual embassy to the GCC states under the Twitter handle ‘Israel in the GCC’, prompting interesting discussions with Gulf citizens using the platform. Since the latest offensive in Gaza began, the handle has mostly been tweeting war updates from the Israeli Defence Forces.
Emailed questions to foreign affairs ministry spokesman Yigal Palmor on whether the virtual embassy was still operative, and the potential for a future trade mission went unanswered.
The global boycott movement against Israeli or Israel-aligned products and firms has gathered steam following the latest conflict, in which 2,125 Palestinians, 68 Israelis and a Thai national were killed.
However, despite restrictions, trade has continued through Israeli firms registered in the West, and products made in Israel but packaged without an Israeli label have been allowed to pass, says Guzansky.
The Gaza conflict, however, may change attitudes towards Palestine and Israel, especially for Qatar, which despite maintaining the most dynamic trade relations with Israel had apparently disappeared into the background as an indefinite ceasefire, sponsored by Egypt, brought current hostilities to an end in late August.
However, nearly a week before the ceasefire agreement London-based Al Hayat newspaper reported that Qatar had threatened Hamas chief Khaled Meshal with expulsion from his Doha refuge, if he accepted the Egyptian proposal for ceasefire.
Israel blames Qatar for bankrolling Hamas, which has been governing Gaza since 2007 and for sponsoring “terror tunnels” used to store weapons and launch attacks against Israel.
Israeli president Shimon Peres accused Qatar of being “the world’s largest funder of terror”, while an Israeli official quoted by the Jewish Telegraphic Agency (JTA) said that Doha, “instead of contributing to the development of the area, is contributing to terror in the region.”
A joint mistrust of Iran and sharing of intelligence led the Gulf Co-operation Council (GCC) and Israel to see eye-to-eye, but with disunity among Gulf ranks, the dynamics of a covert economic relationship may be changing.
As Qatari money into the Palestinian Territories undergoes scrutiny for terror financing, what is the future then of the Gulf’s state’s football diplomacy?
“There’s no doubt that at the moment there is a strong anti-Qatar sentiment in Israel,” says Dorsey, who also writes on the politics of Middle East football in his blog.
“But I don’t think they would go as far as blocking the investment, because there is mileage in an Arab state that has no diplomatic relations or peace treaty with Israel, willing to put money into Israel, even if it’s inside the Palestinian sector.”
As Egypt opens the Rafah border crossing with Gaza, under the terms of the ceasefire it brokered, it remains to be seen if Qatar will play any future role in the economy of the troubled region.
“As part of the rehabilitation that the Egyptians and Israelis are trying to formulate right now, they would love to see Saudi and Emirati money flowing in to replace Qatar,” says Guzansky.
“Qatar won’t be able to dance at both parties at the same time anymore and I guess this Qatari policy, which is not new, has been something of an irritant for its neighbours as well.
“They tried to do that for a few years. I guess the party is over.”
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