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Wednesday, December 15, 2010

The United Arab Emirates (UAE): Issues for U.S. Policy

Kenneth Katzman
Specialist in Middle Eastern Affairs

The UAE’s relatively open borders, economy, and society have won praise from advocates of expanded freedoms in the Middle East while producing financial excesses, social ills such as prostitution and human trafficking, and relatively lax controls on sensitive technologies acquired from the West. These concerns—as well as concerns about the UAE oversight and management of a complex and technically advanced initiative such as a nuclear power program—underscored dissatisfaction among some members of Congress with a U.S.-UAE civilian nuclear cooperation agreement. The agreement was signed on May 21, 2009, and submitted to Congress that day. It entered into force on December 17, 2009. However, U.S. concerns about potential leakage of U.S. and other advanced technologies through the UAE to Iran, in particular, are far from alleviated.

Despite its social tolerance and economic freedom, the UAE government is authoritarian, although with substantial informal citizen participation and consensus-building. Assessments by a wide range of observers say that members of the elite (the ruling families of the seven emirates and clans allied with them) routinely obtain favored treatment in court cases, obtain access to lucrative business opportunities, and exert preponderant influence on national decisions. The UAE federation president, Shaykh Khalifa bin Zayid al-Nuhayyan, technically serves a five-year term, renewable by the Federal Supreme Council (composed of the seven heads of the individual emirates), although in practice leadership changes have generally taken place only after the death of a leader. After several years of resisting electoral processes similar to those instituted by other Gulf states, and despite an absence of popular pressure for elections, the UAE undertook its first electoral process in December 2006. The process was criticized as far from instituting Westernstyle democratic processes, because the electorate was limited and selected by the government, and it voted for only half of the membership of a body with limited powers. The other half of the body continues to be appointed.

Partly because of substantial UAE federal government financial intervention and ample financial reserves, the political and social climate remained calm through the 2008-2009 global financial crisis and recession. The downturn hit Dubai emirate particularly hard and called into question its strategy of rapid, investment-fueled development, especially of luxury projects. Many expatriate workers left UAE after widespread layoffs, particularly in the financial and real estate sectors, and the decline affected property investors and the economies of several neighboring countries, including Afghanistan.

For details and analysis of the U.S.-UAE nuclear agreement and legislation concerning that agreement, see CRS Report R40344, The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation, by Christopher M. Blanchard and Paul K. Kerr.

Date of Report: December 7, 2010
Number of Pages: 17
Order Number: RS21852
Price: $29.95

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