The Pioneers
The Abraham Accords, signed in September 2020, formalised the normalisation of diplomatic relations between Israel and both the UAE and Bahrain. Abu Dhabi and Bahrain were among the first Arab states to establish full diplomatic and economic relations with Israel since Egypt (1979) and Jordan (1994), making them pioneers in a regional realignment with potentially transformative economic implications.
The Accords were not primarily about Israeli-Palestinian peace — a fact that both critics and proponents acknowledge. They were about recognising a strategic and economic reality: that the Gulf Arab states and Israel share security concerns about Iran, technology and innovation interests, and economic complementarities that make normalised relations mutually beneficial, regardless of the unresolved Palestinian question.
Abu Dhabi’s Calculus
Abu Dhabi’s decision to normalise relations with Israel reflected multiple strategic calculations. The security dimension was primary — both Abu Dhabi and Israel view Iran as their principal regional threat, and normalisation enabled intelligence sharing, security cooperation, and diplomatic coordination that had previously occurred only through back channels.
The technology dimension was significant. Israel’s innovation ecosystem — world-leading in cybersecurity, agricultural technology, water management, defence technology, and AI — offered capabilities directly relevant to Abu Dhabi’s diversification and technology development objectives. Normalisation opened formal channels for technology transfer, research collaboration, and Israeli company establishment in Abu Dhabi.
The diplomatic dimension served Abu Dhabi’s positioning as a pragmatic, forward-looking actor in regional affairs. The Accords enhanced Abu Dhabi’s standing with the United States (which brokered the agreements) and positioned the emirate as a leader in regional diplomacy.
Bahrain’s Decision
Bahrain’s decision to join the Abraham Accords was shaped by different considerations. The kingdom’s smaller scale and more limited economic leverage meant that the bilateral economic benefits were less significant than for Abu Dhabi. Bahrain’s primary motivation was strategic alignment — demonstrating solidarity with the United States and Saudi Arabia (which tacitly supported the Accords), positioning Bahrain as a constructive regional actor, and opening channels for security cooperation with Israel regarding the shared Iranian threat.
Bahrain’s decision was also more domestically sensitive. The kingdom’s Shia population includes constituencies sympathetic to the Palestinian cause, and normalisation with Israel generated domestic criticism. The government’s decision to proceed despite this opposition reflected the primacy of strategic and diplomatic considerations over domestic political comfort.
Economic Normalisation
The economic dimension of the Abraham Accords has developed across several channels:
Trade flows: Bilateral trade between the UAE and Israel has grown since normalisation, encompassing technology, diamonds, food products, tourism, and professional services. Direct flights between Abu Dhabi and Tel Aviv facilitated business and tourism travel.
Investment partnerships: Israeli and Emirati companies have established joint ventures, co-investment platforms, and business partnerships across sectors including technology, healthcare, financial services, and food security. Abu Dhabi’s sovereign wealth funds have explored investment opportunities in Israeli technology companies.
Financial services: Banks and financial institutions in Abu Dhabi and Bahrain have established correspondent banking relationships with Israeli counterparts, enabling cross-border financial flows that were previously impossible through formal channels.
Tourism: Israeli tourists have visited the UAE and Bahrain in substantial numbers since normalisation, contributing to tourism revenue and cultural exchange. Abu Dhabi’s attractions — the Louvre, Yas Island, and the broader emirate — have become accessible destinations for Israeli travellers.
Technology and Innovation
The technology relationship has been a particular focus of post-Accords economic development. Israeli companies have established presence in Abu Dhabi’s Hub71 ecosystem, and Emirati entities have invested in Israeli technology ventures. Collaboration areas include:
Cybersecurity — an area where Israeli capabilities are globally recognised. Agricultural technology — relevant to both countries’ food security concerns in arid climates. Water management and desalination — critical for Gulf states. Defence technology — facilitated by the normalised security relationship. Artificial intelligence — where both Abu Dhabi and Israel have significant ambitions and capabilities.
Limitations and Risks
The Abraham Accords’ economic potential faces several constraints. The Israeli-Palestinian conflict continues to generate periodic crises that create political pressure on normalisation partners. The October 2023 conflict in Gaza tested the durability of normalisation relationships, with both Abu Dhabi and Bahrain expressing criticism of Israeli military operations while maintaining diplomatic relations.
Public opinion in both Abu Dhabi and Bahrain includes constituencies that oppose normalisation with Israel, creating domestic political costs that governments must manage. The economic benefits of normalisation must be sufficient to justify these costs — and the track record, while growing, has not yet produced the transformative economic outcomes that would make normalisation irreversible on commercial grounds alone.
Implications for Vision 2030
The Abraham Accords expand the range of economic relationships available to both Abu Dhabi and Bahrain as they execute their Vision 2030 strategies. Access to Israeli technology, innovation partnerships, and tourism demand creates opportunities that did not exist before 2020.
For Abu Dhabi, the Israel relationship is one component of the emirate’s multi-vector foreign policy — adding a new partnership axis without replacing existing ones. For Bahrain, the relationship is more modest in economic terms but strategically significant as a demonstration of alignment with the US-brokered regional architecture.
The Accords’ long-term economic impact depends on the trajectory of the Israeli-Palestinian conflict, the durability of political support for normalisation in both the Gulf and Israel, and the pace at which commercial relationships mature from initial agreements into substantive economic activity.