UAE-Israel projects in uncertainty as US pulls funding

Israeli-UAE investment projects in uncertainty as US indefinitely ends support for Abraham Fund
3 min read
07 July, 2021
The Abraham Fund, which followed the Abraham Accords of 2020, will no longer receive support from the US as Washington looks to focus on diplomatic efforts.
The Abraham Fund was conceived to build stronger business ties between the Israel and the UAE [Getty]

The US has ended its financial support for the Abraham Fund indefinitely, according to sources who spoke with Israeli media outlet Globes

The cancellation of the fund by the Biden administration comes at a time when the United Arab Emirates is seeking to strengthen economic ties with Israel through multi-billion dollar investments. 

The Abraham Fund was established after the signing of the Abraham Accords in September 2020, and was designed to pump over $3 billion in to the development investment market and promote economic cooperation in the region. 

By October 2020, the Abraham Fund was operating and reviewed hundreds of requests for financial support. 

Among the projects that received approval were those related to energy, food-tech, and fin-tech. The Abraham Fund also reached out to a number of US based financial institutions, who were asked to join the initiative and boost the capital levels in the fund. 

While the Biden administration never suggested that it would end its support for the Abraham Accords, the future of the Abraham Fund was cast into doubt when Rabbi Aryeh Lightstone, who was appointed by Donald Trump to head up the fund, stepped down from his role shortly after President Joe Biden's inauguration. 

The Biden administration has yet to fill the empty position. 

The reluctance of the US to provide funding is reportedly due to the huge expenditure needed by the US for the economic recovery from the Covid-19 pandemic. 

Additionally, according to officials from the State Department, the fund clashed with existing schemes. 

"While a fund was announced, it posed numerous challenges, including overlapping with existing mechanisms, and was never operational," said the official. 

According to sources who spoke to Globes, the US is looking to focus its efforts on expanding the diplomatic elements of the Abraham Accords and encouraging other parties to join the agreements.

Talks between the US and the current and former Israeli administrations have reportedly made it clear that the Washiington has no interest in supporting the Abraham Fund. 

Voices

Officials from the State Department, who spoke to The New Arab, indicated that they were seeking to establish investment partnerships between Israel and Palestine, through the Joint Investment for Peace Initiative.

"This new program will increase cooperation between Israelis and Palestinians and promote investments and financial tools that advance the development of the Palestinian private sector economy," a State Department official said. 

The focus of the Biden administration to bring the conversation back around to the Palestinians, and seek to include them in peace talks, is a major divergence from the previous administration, that sought a peace deal without their consent. 

"We hope that as Israel and other countries in the region join in a common effort to build bridges and create new avenues for dialogue and exchange.  These efforts contribute to tangible progress towards the goal of advancing a negotiated peace between Israelis and Palestinians," one official told The New Arab.

To mitigate the efforts of the US withdrawal, the UAE set up in own $10 billion fund in March 2021, but has so far failed to produce any tangible results.

UAE Crown price Mohamed bin Zayed claimed the fund would invest in energy, industry, infrastructures, space, and health.

It was hoped that the recent visit by Israeli Foreign Minister Yair Lapid would be instrumental in building a legal framework for the fund, but proved fruitless. 

Recently, doubt has also been cast on a planned UAE oil pipeline, which will move oil from the Persian Gulf to Israel for supply to Mediterranean customers.

Pressure from Israel's environment ministry, including a statement from the newly-appointed minister to reverse the deal,