Last week, the Israeli government approved a special program to strengthen economic relations with Egypt, which aims to increase trade between the countries from $330 million to at least $700 million within three years (excluding natural gas exports and tourism).
The program builds on the momentum felt over the last year in the bilateral relations. This is manifested in a variety of ways, among them: an increase of about 60 percent in trade volume; discussion of the expansion of the QIZ agreements (Egyptian industrial zones that are exempt from US customs duty subject to Israeli input in the product); increased Israeli gas export to Egypt and negotiations with the EU on further increases; opening of the Tel Aviv-Sharm el-Sheikh flight route; and reciprocal visits by ministers and delegations of businesspeople.
The plan includes steps to upgrade the infrastructure that supports trade relations between the countries, and in particular the Nitzana border crossing and the transportation leading to it. In addition, Israel is interested in resuming the activities of the joint Trade and Agriculture Committees, which were established in the early years of peace, but over the years have ceased to convene. At the core of the program are areas at the forefront of Egyptian priorities, such as water resource development, irrigation, desert agriculture, aquaculture, renewable energies, and prevention of seawater pollution.
The plan is based on several guiding ideas. First is the diversification of state relations by integrating a number of government ministries in their promotion, including energy, economy, industry, and transportation. Second is the pursuit of "long-term and broad-based commitments" between companies and government agencies, which will deepen the roots of peace. Third is realization of the complementary advantages of the two economies, including import of raw materials, vegetables, and food products from Egypt to Israel, and export of technologies from Israel to Egypt. Fourth is the leverage of trust that prevails between the political-security levels in the two countries to the economic level.
The plan comes in the wake of growing openness to economic normalization with Israel on the part of Egypt, which aims to develop new growth engines. In addition, the changing international and regional circumstances, from the Russian invasion of Ukraine to the Abraham Accords, give the two countries new opportunities to expand their relations in areas such as tourism, energy, and climate. So far, this trend has not encountered significant protests in Egypt, with business unions even taking part in strengthening ties with their Israeli counterparts.
However, the road to realizing the full economic potential of the relations between the countries is still long, and requires more freedom for private initiatives, the removal of bureaucratic barriers on both sides, and the facilitation of the movement of people and goods between countries. In addition, efforts should be made to improve the visibility of ties, particularly in Egypt, in a way that makes clear government support for their expansion, encourages the economic sectors to promote them, and strengthens the appreciation of the publics in both countries for the fruits of peace.
Last week, the Israeli government approved a special program to strengthen economic relations with Egypt, which aims to increase trade between the countries from $330 million to at least $700 million within three years (excluding natural gas exports and tourism).
The program builds on the momentum felt over the last year in the bilateral relations. This is manifested in a variety of ways, among them: an increase of about 60 percent in trade volume; discussion of the expansion of the QIZ agreements (Egyptian industrial zones that are exempt from US customs duty subject to Israeli input in the product); increased Israeli gas export to Egypt and negotiations with the EU on further increases; opening of the Tel Aviv-Sharm el-Sheikh flight route; and reciprocal visits by ministers and delegations of businesspeople.
The plan includes steps to upgrade the infrastructure that supports trade relations between the countries, and in particular the Nitzana border crossing and the transportation leading to it. In addition, Israel is interested in resuming the activities of the joint Trade and Agriculture Committees, which were established in the early years of peace, but over the years have ceased to convene. At the core of the program are areas at the forefront of Egyptian priorities, such as water resource development, irrigation, desert agriculture, aquaculture, renewable energies, and prevention of seawater pollution.
The plan is based on several guiding ideas. First is the diversification of state relations by integrating a number of government ministries in their promotion, including energy, economy, industry, and transportation. Second is the pursuit of "long-term and broad-based commitments" between companies and government agencies, which will deepen the roots of peace. Third is realization of the complementary advantages of the two economies, including import of raw materials, vegetables, and food products from Egypt to Israel, and export of technologies from Israel to Egypt. Fourth is the leverage of trust that prevails between the political-security levels in the two countries to the economic level.
The plan comes in the wake of growing openness to economic normalization with Israel on the part of Egypt, which aims to develop new growth engines. In addition, the changing international and regional circumstances, from the Russian invasion of Ukraine to the Abraham Accords, give the two countries new opportunities to expand their relations in areas such as tourism, energy, and climate. So far, this trend has not encountered significant protests in Egypt, with business unions even taking part in strengthening ties with their Israeli counterparts.
However, the road to realizing the full economic potential of the relations between the countries is still long, and requires more freedom for private initiatives, the removal of bureaucratic barriers on both sides, and the facilitation of the movement of people and goods between countries. In addition, efforts should be made to improve the visibility of ties, particularly in Egypt, in a way that makes clear government support for their expansion, encourages the economic sectors to promote them, and strengthens the appreciation of the publics in both countries for the fruits of peace.