"We will start to see the fruits of what is being done today five years from now"
Avi Ortal, CEO of Leumi Partners, said that the key word in the UAE economy is ‘diversity’ in order to reduce dependence on oil
"In my opinion, the relationship between Israel and the United Arab Emirates will develop more slowly than expected," said Avi Ortal, CEO of Leumi Partners at the first Israel-Dubai conference organized by Calcalist, Bank Leumi and Reshet 13. "In this culture here in the region, it is common to develop a long and deep relationship, whereas Israelis like to score fast and move on. It will take time to produce the right connections with the relevant organizations, and there is a need to be patient. In my opinion, in five years we will start to see the fruits of what is being done today,” Ortal added.
Leumi Partners is Bank Leumi's investment banking arm. In a conversation with Ron Friedman from CTech, Ortal detailed what Leumi Partners has done so far to promote the relationships in the business sector. "We have partnered with local institutions in Dubai and Abu Dhabi, with the aim of producing the bridge for doing business between the two countries," Ortal said.
"When starting a relationship with a new country, it is important to do a few things. First, you need to understand the needs and desires of the other party: Do you want capital to be invested in Israel or with them, what are their return expectations from investments? We talk to institutions that understand this. For example, the UAE companies want them to come here or establish joint investments, and not as much to make direct investments in Israel," Ortal said.
He further noted that due to the complex business group structure that characterizes the business sector in the Emirates, it is important to understand who is actually the relevant factor vis-à-vis doing business: "You need to understand who makes decisions - there are many groups here. You need to navigate who is relevant to what you need. It is also important to understand the regulation in the industry in which you want to operate. There are many unique things here, such as understanding whether the activity will be subject to local Sharia law."
Ortal also noted that, like in Israel, it is important to build a personal relationship with the other party: "Before the meeting, you need to study the other party's background, where he studied, what his background is, what his hobbies are,” he said.
Ortal noted that the key word in the UAE is ‘diversity’. Oil is still an important factor in the economy, and the Emirates wants to reduce its significance. "In Abu Dhabi, for example, oil makes up 25% of the economy, and they really want to diversify the economy, and reduce dependence on oil. Everything related to innovation and research and development interests the Emirates, and we want to bridge their needs to what the Israeli market has to offer," he said.