Photo: iStock
Bálint Kecskés
11/10/2024 22:20
We call these states as connector states, as they ensure passages through the economically fragmented world. In addition to Vietnam, Mexico or Hungary, the United Arab Emirates (UAE) also redefine its position in the global arena.
More than ten years after the outbreak of the Arab Spring in 2011, the foreign policy of the Emirates has changed enormously in the last two years. The Emirates, apostrophised to “Little Sparta” (which name was given by a former US Marine Corps General, James Mattis, due to the country active and effective military role and power projection in the region) now started to de-escalate and normalise its relations with the influential surroundings states, such as Iran, Israel, Türkiye, Qatar and Syria. The pacifist direction was the first step to the non-aligned and mediating position, which allows it to profit from the conflicts between the West and East.
War is a great business opportunity, as huge amounts of Russian capital have been flowing into the country since the sanctions against Moscow has begun. Hundreds of thousands of Russian citizens arriving in the country, and many of them also applying for working visas for resettlement purposes. The boom is not only reflected in the Russian money spent in the HoReCa-, but also in the real estate sector, which now accounts for 10 per cent of Dubai's GDP: in 2022, more than 86,000 residential properties were sold in Dubai, breaking the previous record (80,000) set in 2009, due to the Russian capital fuelling the sector. In fact, once-abandoned projects like the Dubai Pearl, or the forgotten twin of Palm Jumeirah, – the Palm Jebel Ali – also relaunched.
The UAE also links Russia to the West in global trade. The non-oil trade between the two sides growing by 95 per cent in 2022, and there is an even bigger boom in energy trade: thanks to a significant price discount, Russian oil exports to the UAE tripled to 60 million barrels per year in 2022, which it either re-export or store it for Russia, by making huge profits. The financial success of the UAE is illustrated by the fact that the country’s sovereign wealth funds (SWF) total asset rose to $1.624 trillion in 2022, when Abu Dhabi became the third-largest concentration of these kind of funds after Beijing and Oslo.
In a nutshell, the UAE became one of the largest regional powers with far more influence than its size would justify. Taking advantage of its economic power derived from oil production, it built a resilient economy, which today by pursuing a patriotic foreign policy, elevates the country among the dominant geopolitical players.
The author is an international relations expert
