The main risk in the Gulf for an Israeli company is not economic but political: the deal rests on relations between states, and such relations react to events that have nothing to do with the deal itself. The assessment should answer five questions:
- What happens to the deal in a regional crisis? A war or escalation can freeze cooperation even when the partner wants to continue.
- Who is the partner, and what is its link to the government? In the Gulf it is hard to separate private capital from state capital, which is both an advantage and an exposure.
- Which restrictions apply to the technology? Israeli defense export controls and US restrictions on China may also apply to the partnership.
- How will the partnership look in the media? Narrative risk on both sides can stop a deal that passes every other test.
- What is the exit scenario? How capital, intellectual property and employees are taken out if the environment changes.
The guide "What to check before entering a new market" at bluepumpkin.co/learn sets out the method. It is based on the seven-layer model of Dr. Bella Barda-Bareket, who has also written about real estate investment in Dubai.