Can Israeli-Emirati business ties survive the Gaza war? - The Economist   

IN 2020 MIDDLE EASTERN commerce was transformed. The United Arab Emirates (UAE) and a few other countries signed the Abraham Accords with Israel, normalising relations between the Jewish state and some of its Arab neighbours. Israeli tourists flooded into Dubai on the first ever direct flights. In the first eight months of 2023 Dubai welcomed almost 230,000 travellers from Israel, 73% more than in the same period last year. Nowadays travel agencies in Tel Aviv even offer bar-mitzvah tours in the emirate, with pit stops at kosher restaurants.

Business dealings have blossomed, too. The UAE-Israel Comprehensive Economic Partnership Agreement came into force in April. Official trade between the two countries is expected to surpass $3bn this year, from nothing in 2019. Last year Abu Dhabi’s sovereign wealth fund, Mubadala, reportedly invested $100m in six venture-capital (VC) funds based in Israel or focused on Israeli startups. It also bought a $1bn stake in an offshore natural-gas field from NewMed Energy of Israel. Israeli technology companies such as Liquidity Group, a fintech darling, have opened research-and-development centres in the UAE. Israeli and Emirati universities have forged research partnerships on things like artificial intelligence.

All of this progress is now at risk as a result of the war raging between Israel and Hamas. Since the conflict erupted, reports one Israeli entrepreneur, many Emirati contacts have gone silent. An Israeli-American investor who splits his time between Dubai and Tel Aviv worries that even after the conflict abates, Arab firms will think twice about transacting with Israeli ones.

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Can anyone bar Europe do luxury? - The Economist   

At this year’s holiday soirées luxury bosses may be stingier than usual with the champagne. It has not been a sparkling six months for the industry, as well-heeled consumers from East to West have tempered the excesses of recent years. The S&P global luxury index, which tracks the industry’s performance, is down by 9% since the middle of the year. Still, the purveyors of splendour need not forgo the merrymaking altogether. The global market for personal luxury goods, from handbags to haute couture and horology, grew by 4% this year, reckons Bain, a consultancy. That is disappointing compared with 20% last year—but nothing to scoff at amid fears of a slowing global economy.

The past two decades have been remarkable for the industry. Global sales have tripled to nearly $400bn, thanks largely to a swelling of the ranks of crazy rich Asians. The biggest beneficiaries of the boom have been European companies. These account for around two-thirds of luxury-goods sales, according to Deloitte, another consultancy, and nine of the world’s ten most valuable luxury brands, according to Kantar, a market-research firm. Bernard Arnault of LVMH, a European luxury goliath, is the world’s second-richest man. The industry remains a rare bright spot for Europe at a time when the continent seems at risk of fading into economic and technological irrelevance. Why has it been so immune to foreign competition?

Heritage is one explanation. Europe’s luxury firms have ridden high on the world’s continuing fascination with the old continent. It is home to seven of the ten most visited countries in the world. Tourists flock to Europe’s historic cities to ogle its artworks, taste its local delicacies and drink its fine wines; the rich and famous gather in the summer for lavish parties on the Riviera. In his book, “Selling Europe to the World”, Pierre Yves Donzé, a business historian, argues that the ascendancy of European luxury is thanks to “the powerful attraction of an idealised way of life, combining elegance, tradition and hedonism”.

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New rules for America’s green-hydrogen industry are controversial - The Economist   

A CURIOUS LETTER sent on November 6th recently surfaced in Washington, DC. On that day, nearly a dozen American senators sent a stern note to Janet Yellen, America’s treasury secretary, Jennifer Granholm, its energy secretary, and John Podesta, the senior adviser to the White House on clean energy. It was about the legal guidance they expected from the Internal Revenue Service (IRS) on tax rules governing a generous new subsidy for “green” hydrogen. They insisted that the rules for this clean fuel, that can replace fossil fuels in hard-to-decarbonise industrial sectors like steel and chemicals, must be “a robust and flexible incentive that will catalyse and quickly scale a domestic hydrogen economy”.

That was but one heavyweight salvo in a months-long war waged by technology companies, environmental groups, energy lobbyists and business chambers over this previously obscure topic. To influence the handful of tax nerds and their political masters making this decision, millions have been spent on full-page advertisements in the New York Times and Washington Post, on podcasts and—to the bewilderment of punters looking for a mindless rom-com—on mainstream streaming services like Hulu.

Perhaps that was fitting, for the ruling looks to be a blockbuster. The long-delayed draft guidance on the 45V tax credit, as the proposal is formally known, was finally unveiled on December 22nd (the White House tried to bury the controversy in pre-Christmas distractions). Those senators calling for flexibility will not be pleased. There is always tension between growth and greenery in environmental regulation, and especially when it comes to writing rules for an industry that does not yet exist. The Biden administration has tilted strongly towards greenery in its proposals. In doing so it will probably kick up a hornet’s nest of industry protest.

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What Google’s antitrust defeat means for the app economy - The Economist   

IT TOOK less than four hours for nine jurors to reach a verdict. On December 11th in a San Francisco courthouse they unanimously agreed that Google’s app store was a monopoly and that the company had engaged in anticompetitive behaviour. The decision strikes a blow against the search giant, which is concurrently embroiled in other legal battles. It may also redefine the app-store economy.

Most smartphones run on one of two operating systems. Apple’s iOS is a walled garden with just one app store—its own. Other device-makers tend to use Google’s Android, which on paper lets in app stores other than the Google Play store. The case was about whether it does in practice. In 2020 Epic Games, a game studio, urged players to use its payments system to make purchases in “Fortnite”, its blockbuster shoot ’em up. The idea was to bypass the 30% cut taken by Apple and Google on most in-app purchases in their app stores. “Fortnite” was briefly banned from both.

Epic sued. Its lawyers argued Google was stifling competition by striking deals with, among others, smartphone-makers such as Samsung and LG, to give the Play store prime placement on their devices in exchange for a cut of revenues. The jurors did not buy Google’s defence that it competes fiercely with Apple, as well as other app stores on Android devices.

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