Dubai, United Arab Emirates. Photo: Wikimedia Commons.

CTech – “Dubai means business, speed is of an essence and people here are very serious. The UAE is a cosmopolitan society made up of different cultures and languages, but the common denominator for all is their love of business. We are traders and I believe there is an incredible marketing opportunity here. Don’t look at Dubai as a market of nine million people, through Dubai you can reach more than two billion people. An hour’s flight away from here are two billion people in India, Pakistan, Sri Lanka, Iran, Bangladesh, and East Africa. Our people are traders and they know how to sell. We have 50 million watches in Dubai, do we need them all? Of course not, but as traders, we know that we can sell them on quickly.”

This statement was made by Sultan Ahmed bin Sulayem, one of the UAE’s most prominent businessmen, with strong ties to the country’s leadership, in an exclusive interview with Calcalist.

The interview was conducted in Dubai immediately after Dubai Ports World, the company Sulayem heads, signed a collaboration agreement with Israel’s Bank Leumi. The agreement with the bank joins another one the sultan had previously signed with Dover Tower owner Shlomi Fogel, who is also a shareholder in Israel Shipyards, to jointly submit a bid to privatize the Haifa Port.

It is estimated that the move, which has already gained the approval of the ministries of Transportation and Finance, will also be approved by the National Security Council provided DP World remains a minority shareholder with 30% of the shares and the company will be controlled by Israeli owners. The two companies will also collaborate on the formation of a new direct shipping line between Dubai’s Jebel Ali Port and Israel’s Port of Eilat. The line is set to begin operating this month, with shipping time scheduled at 10 days with two ships carrying mostly agricultural produce.

Bin Sulayem, who serves as the chairman and CEO of DP World, one of the largest port operators in the world, which in addition to operating Dubai’s Jabel Ali Port — one of the five biggest ports in the world — operates 80 others, including London’s Gateway Port and the Port of Antwerp, has been waiting for normalization of relations with Israel. As one of the most senior and well-known businessmen in the country, born to one of the UAE’s most powerful families and possessing ties to Crown Prince Mohammed bin Zayed, he not only knew about the forming ties between the two countries but was one of the significant forces that pushed them forward. His associates even said he was the person who mediated Saudi Arabia granting its permission to allow the first flight from Israel to Abu Dhabi in August to fly over its territory.

When we met at one of the luxurious hotels located on the famous Palm Islands, of which he was one of the originators, bin Sulayem pulled out a business card in Hebrew.

Based on his appearance, it would be difficult to guess that he is an influential businessman with strong ties to the regime. Like everyone else, he is dressed in white robes and sandals and he is gaunt and conducts himself without special mannerisms. The evening before our interview he arrived, half unannounced, to a dinner organized for a visiting delegation of Israeli businesspeople and took to the podium and gave a long speech to the group of chatting and dining guests, who didn’t quite realize who was standing before them. It was the behavior of the locals and his entourage, who stood up every time he entered the room, which gave away how high up the ranks bin Sulayem stands in the local hierarchy.

The Sultan didn’t only prepare for the announcement of normalization, he knows the country well. Anyone who walked down Tel Aviv’s Rothschild Blvd between July and October 2018 may have by chance encountered the mustached man. The circumstances of his visit then were not joyful. His daughter, one of three children, was suffering from a rare brain disease and the family was in Israel for treatment.

How did you end up in Israel of all places?

“We tried everything, but at one stage the doctors in the US said we could only continue my daughter’s treatment in Israel,” bin Sulayem recalled. “We were told that in Israel they had developed a special treatment using self-replication of brain cells. In the beginning, we came for a series of tests and after three months, when we had almost lost all hope, they got back to us and said they could help. We were living in Tel Aviv and during our stay, I had a chance to tour around and visit many innovation hubs and was blown away by the Israeli industry.”

“The more I delved into it, I realized that the activity had to do with the significant state effort to develop the venture capital market, which in turn geared up innovation in Israel,” he said.

The Sultan took his children to visit the Peres Peace and Innovation Center, where he met with Hemi Peres, the son of former President Shimon Peres, and a founding partner in the Pitango VC firm. “The children were very excited,” he said. “They were particularly impressed with Professor Hossam Haik, who invented an artificial nose that could detect early symptoms of diseases using nanotechnology. I think he should be considered for a Nobel Prize.” His daughter’s condition improved significantly since visiting Israel, but he refused to discuss the details.

Frequent mention of the government is part of the routine for Emirati business people. They try to downplay the government’s involvement in ventures, but peeling back a layer or two of corporate ownership eventually reveals that most conglomerates feature extensive government presence and even in those where it isn’t directly present, not much happens without its blessing.

It appears that bin Sulayem was prepared to answer a question on what the main obstacles to conducting business relations between the two countries would be, in the same way, he had prepared his Hebrew business card. “Our leadership was blessed with vision and courage, the decision to sign an agreement with Israel was very brave and there is no turning back now. Albert Einstein said that if you try to do the same thing all the time, you should not expect different outcomes. For years we tried to do battle, but now is the time to try something else, with perhaps a better outcome. Our nations and the entire region will benefit from it. The agreement will not only shift the status quo but will also bring us closer together,” he said.

And what about the obstacles?

“I don’t see any obstacles. Our leaders have a lot of respect towards the citizens and believe that they are seeing what was done for their benefit. Thirty or forty years ago there was only desert here, with no electricity. You need a lot of vision to develop a country and decentralize the economy so quickly. Sheikh Zayed says that when we export the last barrel of oil we will hold a large celebration. It means that we need to develop new industries and focus on alternative energy sources so that oil no longer plays a role. We are developing the country and cannot ignore the technology that is developing around the world. For that reason, I think that there will be far more business than we now think.”

Sulayem exposes another aspect of the long-held relationship between the two countries that took place under the radar even before the formal establishment of ties.

“Ships belonging to Zim and Royal Caribbean (which was owned by the Israeli Ofer Family) docked at our port, including in Dubai, for years,” he said, “as a port operator, I can’t deny service to anyone. Up until now, it was impossible to sail directly from the UAE to Israel. That will change now. Israel enjoys a great location that enables rapid connections to the rest of the world. For example, the distance from Haifa to Baghdad is 900 kilometers while the distance from Basra to Baghdad is 600 kilometers. Israel has clear logistical advantages. I know this business very well. It is one that you can’t learn, only experience,” he said.

When bin Sulayem talks about Israel’s strategic location, he refers mostly to Haifa, which is ideally located, from a logistical perspective for the transport of goods to and from Iraq. When the British Empire ruled the region, that’s how it transported oil from the Middle East to Europe, using a pipeline from northern Iraq to Haifa.

While bin Sulayem is not related to the dynasty of Sheiks, he is very familiar with them and his career is deeply weaved in UAE history. He was born in 1955, prior to the establishment of the state, to a father who served as a senior advisor to Dubai’s Al Maktoum royal family and is considered a childhood friend of Dubai’s current ruler and the Vice President and Prime Minister of the UAE Mohammed bin Rashid Al Maktoum. At a young age, bin Sulayem was sent to study in the US and after he graduated in 1970, he returned home and started working as a customs inspector at the then drowsy little port of Dubai. He said his career took off when one day a businessman entered his office by mistake and during a random conversation noted that if Dubai were to open a free trade zone, it would be a convenient place through which to ship tea from India to Europe. Having access to the royal family, bin Sulayem proposed to the sheik of Dubai to open a free trade zone. And so, at the age of 30, he launched what was to become one of the greatest successes of the financial world — dozens of free zones, most of them located in Dubai. In them, foreign companies could engage in activity without a local partner and receive tax exemptions for a period of 50 years provided it operated in a field defined as relevant to trade.

That is also how the Jabel Ali port was established in 1985, considered today as one of the largest ports in the world and which bin Sulayem’s DP World has been operating for the last 10 years. According to bin Sulayem, the free zone is responsible for 52% of Dubai’s products. DP World, which employs 50,000 people, handles 190,000 containers a day and 70,000 ships a year. Until recently, DP World was a publicly owned company traded on Dubai’s Nasdaq, but several weeks ago the state completed an acquisition offer and delisted the company in a $13.9 billion transaction. Just before the acquisition, the company reported revenues of $4.1 billion in the first half of 2020, representing an 18% increase over the same period in 2019, though its profits dove from $753 million to $333 million.

The collapse of the National Wealth Fund

The port business turned bin Sulayem into a well-known businessman and when the government decided to start developing the real estate and hospitality sector in the mid-1990s, he was called upon to help. It was then that he encountered a problem — Dubai’s natural coastline was very small, only seven kilometers (4.3 miles) insufficient to develop any significant tourism infrastructure. “In 1997 we started thinking about developing tourism and our need for more coastal property, 70 kilometers instead of seven,” he said. Together with the Sheikh, bin Sulayem came up with the idea for an artificial coastline and the Nakheel real estate group was formed to realize the ambitious project. The first island was founded in 2001.

The idea of constructing the palm-tree-shaped islands catapulted bin Sulayem to the top and the sheik let him into the “holiest of holies,” the board of the National Wealth Fund. But it was also what nearly led to his fall later on. The financial crisis of 2008 hit the Dubai economy, which was extremely leveraged and reliant on real estate, badly. It exposed $80 billion of debt, most of it registered to Dubai World and its subsidiaries, including the bin Sulayem-run Nakheel. At the end of 2009 he was forced to give up his seat in the fund after the local economy nearly collapsed. In the end, the wealthier sister state, which holds most of the UAE’s oil reserves, bailed Dubai out of the crisis.

Nowadays, bin Sulayem wants to expand the port operations well beyond the handling of ships and containers. Recently, his longtime friend the ruler of Dubai entrusted him with launching the world’s largest innovation center as part of the ambitious project titled the Dubai Future District, a bridge will connect three central towers in the city and the government will allocate $270 million to support companies that move their operations into the new complex. Part of the plan includes reaching a point in which trade in non-oil-related products climbs to $500 billion over the next five years.

He is no stranger to innovation. It was bin Sulayem who roughly a year ago replaced Richard Branson as chairman of the Hyperloop initiative — a futuristic high-speed mode of transportation that can transport cargo and passengers through reduced-pressure tubes. DP World financed most of the project with plans of a more efficient supply chain that can substantially reduce storage space and distribution times.

People familiar with bin Sulayem say that he has long believed in the idea of economic peace and has long tried to use his influence with the ruling families of Dubai and Abu Dhabi to advance the processes we are experiencing now. Some say that just as the Palm Islands and the free zones were his ideas, so was normalization of ties with Israel. It should therefore be no surprise that the first practical agreements have his name on them.

Incidentally, his son, who is the chairman of DMCC, Dubai’s largest free zone, last week signed a cooperation agreement with the Israel diamond exchange.