An example of success in a chaotic world

The United Arab Emirates is experiencing a boom and is taking advantage of the opportunity presented to them in the multipolar age, seeking not only economic success, but also political influence abroad.

22592 views 0 comment(s)
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate
Sheikh Mohammed bin Zayed al Nahwan follows the Formula 1 races in November, Photo: Reuters
Sheikh Mohammed bin Zayed al Nahwan follows the Formula 1 races in November, Photo: Reuters

Over the next few weeks, Dubai will be in the spotlight. Tens of thousands of diplomats, activists and business people gathered at the annual climate meeting of the United Nations. The UAE will get the chance to demonstrate its skill in dealing with countries and industries with vastly different interests, in the hope of making further progress in tackling climate change. However, this is not the only reason to pay attention to the UAE. That country is also an example of success in a multipolar age.

photo: REUTERS

A little more than 0,1 percent of the world's population lives in the UAE and it represents only 0,5 percent of the world's GDP, but it contains almost 10 percent of the world's oil reserves, and thanks to that wealth it has more influence than would be expected for a country of its size. Like many emerging countries today, the UAE faces political and economic divisions. It is a closed autocracy, yet one of the most open economies in the world. It is a close ally of America, but its biggest trading partner is China. Although its GDP per capita exceeds that of Britain and France, it is often considered part of the global south and is a center for Indian and African businesses, leading to it being considered the Singapore of the Middle East.

In 2020, the Emirates were the first Gulf country to normalize relations with Israel.

As a result, the UAE prospers even as war rages in the Middle East and superpower rivalry tears the world apart. The economy, which does not rely on oil, is growing at nearly six percent annually, a rate that China also enjoys but that the West - and these days even China - can only dream of. Talent and wealth are pouring into the country, while Chinese merchants, Indian tycoons, Russian billionaires and Western bankers alike seek stability and success. Last year, the Emirates attracted more foreign investment for green projects than any other country except America, Britain and India.

Like Singapore, the UAE is a haven for its region. However, while Singapore's rise has coincided with a golden age of globalisation, the UAE is seizing the opportunity at a time of chaos and disorder. That country wants not only economic success but, more dangerously, political influence abroad.

photo: REUTERS

Middle powers can learn from the Emirates' successes and failures as they try to navigate a divided world. One lesson is that you should play to your economic strength. The UAE has had its economic blams, most notably Dubai's debt-financed construction venture that ended in a crash in 2009. The blockchain obsession has faded. However, impressive progress has been made in other areas. Major port operators now operate sites from London to Luanda, Mumbai and Manila.

DP Wordls, one of those firms, handles about a tenth of all global container shipping traffic. Masdar, one of the world's largest clean energy companies, invests in almost everything from wind farms in Texas to solar fields in Uzbekistan. In addition, the UAE is now one of the largest investors in Africa, helping to build vital infrastructure across a continent in desperate need of capital.

Some experts believe that the UAE is perhaps the third most important country in the field of artificial intelligence, after America and China. And throughout it all, the rulers resolutely invested in the usefulness of the country's position as a trading center at the crossroads of Africa, Asia and Europe, building institutions for good economic management and technocracy.

Another lesson is that foreign talent should be embraced. With only one million local residents, the Emirates needs a large number of both high-skilled and low-skilled migrants. And the world is full of people ready to set off in search of happiness and wealth.

The Golden Visa Program established in 2019 offers professionals long-term residency, a select few can even apply for citizenship, which was once unheard of in the Gulf. Over time, Saudi Arabia, which has just begun to reduce its economy's dependence on oil, may become a serious rival. Although political freedoms are severely restricted in the UAE and there is a poor performance in the area of ​​human rights, the threat of competition is influencing the country to become more socially and economically liberal.

The Emirates have not forgotten the benefits of trade either. Other countries favored industrial policy and protectionism, but made deals with the UAE. India, suspicious of free trade, signed the first such agreement with the UAE a decade ago, and trade between the two countries has since grown by 16 percent in nominal terms. The deal with Israel gave the Emirates valuable technological know-how and Israeli firms access to deep pockets of capital and a larger Gulf market. Western airlines stopped flying to Tel Aviv after the outbreak of the Gaza war. Etihad and Flydubai, airlines from the Emirates, continue to maintain regular flights with Israel.

However, it turns out that certain opportunities carry danger. As American influence fades, entrepreneurial powers in all parts of the world will be tempted to amass wealth for themselves abroad. Mohammed bin Zayed, the ruler of the UAE, readily took the initiative. At times, pragmatism has benefited this country.

In much of Africa, it is a desirable business partner, without the imperialist burden of the West; and at the UN climate summit, she hopes to mediate between rich and poor. However, the Emirates also made some disastrous mistakes.

Fearing the influence of political Islam in its own backyard, and wanting to protect the flow of trade, the UAE is arming the Rapid Support Force, the Sudanese militia carrying out the genocide in Darfur. In the past, such an approach was doomed to failure. In Libya, the UAE supported a warlord who organized a campaign against Tripoli in 2019, and lost. In Yemen, they joined Saudi Arabia in a long war against Houthi rebels, before partially withdrawing in 2019.

Over the years the UAE rulers have built mechanisms to ensure a stable business environment at home; they are also aware that failure on the domestic scene would anger their citizens. However, the regime does not face such constraints abroad, which allows it to indulge its whims and protect its interests, regardless of the consequences in other parts of the world. In a divided world, many states will look for new ways to play on the global stage. The UAE, by its example, shows the promised land - but also its dangers.

Translation: NB

Bonus video: