Abraham Accords has led to dramatic increase in trade for Israel, according to Bank of Israel 2022 report
The report provides hard evidence that economic normalization is beginning to produce significant financial results
Israel has long been considered an “island economy” cut off from its Arab neighbors due to an absence of trade with its geographical neighbors.
This lack of economic ties has caused Israel to often import goods from distant countries – products that it could otherwise get from nearby sources.
The enmity and lack of normalization with its geographically-positioned Arab neighbors has resulted in a higher cost of living for Israel as compared to many neighboring Arab states.
While Israel did sign peace agreements with Egypt and Jordan following the 1973 Yom Kippur War, those agreements did not ultimately lead to official economic ties.
However, the 2020 Abraham Accords had as a central component the idea of economic normalization between Israel and the Arab co-signers.
The Bank of Israel Annual Report 2022 provides hard evidence that this economic normalization is beginning to produce significant financial results.
In 2019, before the Abraham Accords, Israel imported roughly $3.6 billion in goods from Middle Eastern countries, primarily Turkey.
In 2022, imports had increased to $8.3 billion.
One interesting fact to note is that while Israel already had economic relations with Turkey before the Abraham Accords, the trend in trade from Israel to Turkey was heading downward before the signing of the historic agreements. Following the accords, imports from Israel to Turkey improved substantially. Not only that, but Turkey’s imports to Israel also increased dramatically following the Abraham Accords.
Another country that has historically traded with Israel, although to a lesser degree, is the Kingdom of Morocco. Imports to Israel from Morocco also improved following the Abraham Accords. More significantly, Morocco is actively seeking to improve ties with Israel on a range of issues, not just trade. Morocco saw a dramatic increase in Israeli tourists, with around 200,000 visiting the country in 2022.
Imports from the United Arab Emirates to Israel are expected to continue improving, as the two countries begin implementing their bilateral free-trade agreement.
While these imports represent a relatively small share of Israel’s total imports and of the UAE’s total exports, the accords have clearly benefited the region.
One startling discovery from the Bank of Israel’s report is the number of Israelis traveling to the Abraham Accords countries.
While some 50,000 Israelis paid a visit to the UAE in 2020 – the same year the Accords were signed – more than 150,000 made the trip in 2022. Those numbers reflect Israeli tourists traveling to the UAE as their primary destination, without stopping en route to another destination. The removal of COVID-19 restrictions in 2022 certainly increased the number of visitors traveling abroad, and with free-trade agreements between the two nations and visa-free travel, those numbers look set to increase even further.
Morocco also saw a dramatic increase in Israeli tourists, with around 200,000 visiting the country in 2022.
The All Israel News Staff is a team of journalists in Israel.