How regime security dominates Saudi-UAE interactions in economic and political competition

The visionary strategy aimed at diversifying the economies of the Middle East, particularly all Gulf Cooperation Council (GCC) rentier states, highlights the different objectives of Saudi Arabia and the United Arab Emirates (UAE) economic policies. These differences are related and worth studying to understand the intricacies of the relationship. Despite this, however, it is worth noting that the Saudi-UAE relationship can still be considered enduring due to shared requirements around regime security.

One of the main stimuli in the bilateral relationship between the two countries is oil policy.Saudi Arabia prefers Extend the transition period Towards renewable energy, while the UAE’s oil reserves are relatively small (approximately 100 billion barrels) Ranked sixth in the world).and wider access For sovereign wealth funds, the UAE has gained an advantage in the process of economic diversification, although all GCC countries still have some way to go in diversifying based on goods and services rather than hydrocarbons and their derivatives. The UAE has led the way since 2016, when Russia took the lead in OPEC+, along with Saudi Arabia. unused oil capacity, potentially adding $50 billion in value annually. This has raised questions about the UAE’s membership in OPEC+ and its overall stance towards the country.

Saudi Arabia and the UAE have had a political struggle since their founding in 1971, with territorial disputes and dynastic rivalries being the main aspects.about 20% Abu Dhabi is said to have sovereignty over the Shaybah field; the 1974 Treaty of Jeddah failed to maintain a final agreement due to difference between oral and written agreements.This lack of consensus has led to tensions on more than one occasion, especially after President Khalifa bin Zayed Al Nahyan took office in 2004 and sought to revive Abu Dhabi claim.

Perhaps unsurprisingly, in this new climate, the Dolphin Gas Project —Launched in 1999 Conceived as a pan-GCC project, it was later scaled down to deliver gas across the border from Qatar, but was repeatedly opposed by the Kingdom of Saudi Arabia. Nevertheless, Qatar, the United Arab Emirates and Oman were able to start limited operations in 2007. A proposed 2005 sea causeway project linking the UAE and Qatar has also been resisted because it would limit Saudi Arabia’s unrestricted sea access. It has been further questioned because of the protracted GCC crisis.

Economic competition intensifies

Economic competition between Saudi Arabia and the UAE has intensified after Saudi Arabia shifted tack in 2016 to achieve its Vision 2030 goals.Riyadh unveils new set of investment policies including import rules exclude Goods manufactured in the free zone (an important aspect of the UAE economy) and goods that use Israeli imports and enjoy preferential tariffs.Other changes include residence regional headquarters and tax relief.

Saudi launches national champions like Riyadh Airways, expected to fly a hundred destinations Over the next few years (once it becomes operational). It would raise the stakes for the UAE’s flag carriers – Emirates and Etihad – and Qatar’s flag carrier, Qatar Airways, which have been used to service tourism in their respective countries, and Strengthen its position as an international hub.Saudi strategic investments in international sports such as Formula one and golfAnd mega-projects like Neom, a planned smart city in the Tabuk province in northwest Saudi Arabia, will have a similar effect on increasing competition within the GCC, mainly against Dubai.

Meanwhile, the UAE has quickly adapted to changing circumstances.It has signed the Comprehensive Economic Partnership Agreement (CEPA), covering many ways Trade with Israel, India, Indonesia and Turkey. This is in stark contrast to the slow progress in GCC free trade agreement negotiations with key partners such as the GCC. European Union and China.

In addition, UAE President Zayed also promoted his son Sheikh Mansour bin Zayed to serve as joint vice-president alongside Sheikh Mohammed bin Rashid Al Maktoum, thereby cementing the Domination of the UAE. Bani Fatima (Six sons of Fatima bint Mubarak Al Ketbi, Sheikh Zayed bin Sultan’s most illustrious wife). The move also helps depersonalize bin Salman Zayed’s leadership. Given the UAE’s dual identity (one person fills two different roles) and the degree to which politics and business intersect, this is an important consideration in reducing the likelihood of penetration between politics and the economy, and vice versa.

However, further difficulties may remain before MBS successfully launches mega-billion-dollar projects such as Neom, the launch and expansion of new industries, and whether political integration and social engineering are sustainable.

Outstanding security issues

The Middle East has always been a key area of ​​interaction and cooperation between Saudi Arabia and the UAE, especially when the Arab Spring broke out in 2011, the two sides active The Gulf Cooperation Council’s Peninsula Shield Force (PSF) responds to the uprising in Bahrain. Bahraini security forces guard the vital installations, freeing up Bahraini security forces to crack down on protesters. Moreover, Egypt’s Gulf Arab neighbors, along with Kuwait, have taken various concerted responses. economic statecraft In 2013, in support of President Abdel Fattah el-Sisi. The measure comes after Egypt’s military seized power amid deep misgivings about the former Muslim Brotherhood-led government and Qatar’s central role in Cairo’s political economy.

Given the limitations of GCC cooperation, Saudi Arabia and the UAE formed an informal security alliance in Yemen in 2015 to rollback Houthi rebellion and restoration of the internationally recognized government of then-President Abd Rabbuh Mansur Hadi. Although the UAE withdrew from the war in 2019, its legacy lives on through its ongoing relationship with the Southern Transitional Council and its influence in the south, including on Socotra island and around the Mandeb Strait and the Red Sea. This protects the UAE’s maritime and commercial interests and gives it further leverage over Yemen’s future. The UAE’s stance contrasts with that of the Saudi kingdom, which is committed to maintaining Yemen’s territorial integrity.

Still, Saudi Arabia and the UAE remain politically aligned on most issues, including diplomacy with Iran, Turkey and Syria. There may also be some coordination in theater, such as in Sudan, which was killed in April amid an escalating power struggle between Sudan’s de facto leader and army chief, Abdul Fattah al-Burhan, and the Rapid Support Forces. Clashes broke out on the 15th. Doctors Without Borders) is headed by General Mohammad Hamdan Dagalo (also known as Hemeti).Saudi Arabia has spearheaded mediation given UAE stance perception bias Support Jaimeetti.

Fundamentally speaking, economics or regional politics are not the determining factors in the bilateral relationship between Saudi Arabia and the UAE. Instead, it was the constant need to keep the regime safe during this time of uncertainty that superseded all other concerns and defined the way these two countries interacted with each other.

robert mason yes author Saudi Arabia and the United Arab Emirates: Foreign Policy and Strategic Alliances in an Uncertain World.

further reading

Monday, August 2, 2021

Saudi Arabia and the UAE are friends and foes economically. This is a good thing.

MENA Sources
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Amjad Ahmed

Both Riyadh and Abu Dhabi have wisely made the economy the focus of their future strategies, as evidenced by changes in national policy and reduced foreign risk taking. Ending the blockade of Qatar and opening talks with hostile neighbors such as Iran and Turkey are tied to long-term economic ambitions.

IMAGE: Saudi Crown Prince Mohammed bin Salman receives United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan in Jeddah, Saudi Arabia, July 16, 2022.SPA/Reuters Handout