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. The UAE government is authoritarian, although it allows substantial informal citizen participation and consensus-building. The openness of its society and its economic wealth have allowed the UAE to largely, although not entirely, avoid the popular unrest in the Middle East thus far. Still, there is a public perception 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.

Until now, political reform has been limited and halting. 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 for half the membership of its consultative “Federal National Council” in December 2006. Possibly to try to ward off the unrest confronting other Middle East states, in March 2011 the government altered rules for the September 2011 election process that will allow more citizens to participate in the voting. However, the government has not announced an expansion of the FNC’s powers, which some intellectuals seek.

On foreign policy issues, UAE appears has become increasingly assertive in recent years. It has deployed troops to Afghanistan and, in 2011, it has sent police to help the beleaguered government of fellow Gulf Cooperation Council state Bahrain, hosted meetings of the anti- Qadhafi opposition of Libya, attempted to broker a political solution to the unrest in Yemen, and appointed an Ambassador to NATO.

The UAE’s growing assertiveness on foreign policy marks its recovery from 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. Several Dubai banks required financial assistance from the federation government, which has ample financial reserves in the form of sovereign wealth funds, to avoid defaults. 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. The downturn also touched Afghanistan in the form of major losses among large shareholders of Kabul Bank, Afghanistan’s largest private banking institution.

For the Obama Administration and many in Congress, there are concerns about the UAE oversight and management of a complex and technically advanced initiative such as a nuclear power program. This was underscored by 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, expert concerns about potential leakage of U.S. and other advanced technologies through the UAE to Iran, in particular, remain. 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: June 23, 2011
Number of Pages: 20
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Iran Sanctions

Kenneth Katzman
Specialist in Middle Eastern Affairs

There is broad international support for imposing progressively strict economic sanctions on Iran to try to compel it to verifiably confine its nuclear program to purely peaceful uses. However, there is not a consensus on how effective the sanctions are on core Western goals. In January 2011, Secretary of State Clinton claimed that sanctions have accomplished a core objective of slowing Iran’s nuclear program. But, nuclear talks in December 2010 and in January 2011 made virtually no progress, suggesting that Iran’s leaders do not feel sufficiently pressured by sanctions to offer major concessions to obtain a nuclear deal.

Because so many major economic powers have imposed sanctions on Iran, the sanctions are, by all accounts, harming key sectors of Iran’s economy by reinforcing the effects of Iran’s economic mismanagement. Among other indicators, there have been a stream of announcements by major international firms since early 2010 that they are exiting the Iranian market. Iran’s oil production has fallen slightly to about 3.9 million barrels per day, from over 4.1 million barrels per day several years ago, although Iran now has small natural gas exports that it did not have before Iran opened its fields to foreign investment in 1996. In addition, Iran’s overall ability to limit the effects of sanctions has been aided by relatively high oil prices in mid-2011.

The United States and its allies appear to agree that sanctions should continue to target Iran’s energy sector and should try to isolate Iran from the international financial system. The energy sector provides about 80% of government revenues. Iran’s large trading community depends on financing to buy goods from the West and sell them inside Iran. Using the authorities of U.N. Security Council Resolution 1929, adopted June 9, 2010, measures adopted since mid-2010 by the United Nations Security Council, the European Union, and several other countries target those sectors. These national measures complement the numerous U.S. laws and regulations that have long sought to try to pressure Iran, particularly the Iran Sanctions Act (ISA)—a 1996 U.S. law that mandated U.S. penalties against foreign companies that invest in Iran’s energy sector. In the 111th Congress, the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195) expanded ISA to sanction Iran’s ability to obtain or make gasoline, for which Iran depends heavily on imports. Sales to Iran of gasoline have fallen dramatically since.

CISADA also contained a broad range of other measures further restricting the already limited amount of U.S. trade with Iran. It also contained provisions to promote the cause of the domestic opposition in Iran by sanctioning Iranian officials who are human rights abusers and facilitating the democracy movement’s access to information technology—a trend that is increasingly taking hold in the Obama Administration and in partner countries. The increasing emphasis on human rights-related laws and sanctions reflect a growing belief that there are few new economic sanctions that can be successfully agreed on or imposed. In the 112th Congress, legislation has been introduced to enhance both the economic sanctions and human rights-related provisions of CISADA and other laws. For a broader analysis of policy on Iran, see CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.


Date of Report: June 22, 2011
Number of Pages: 70
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Pakistan’s Nuclear Weapons: Proliferation and Security Issues

Paul K. Kerr
Analyst in Nonproliferation

Mary Beth Nikitin
Specialist in Nonproliferation

Pakistan’s nuclear arsenal probably consists of approximately 60-90 nuclear warheads, although it could be larger. Islamabad is producing fissile material, adding to related production facilities, and deploying additional delivery vehicles. These steps could enable Pakistan to undertake both quantitative and qualitative improvements to its nuclear arsenal. Whether and to what extent Pakistan’s current expansion of its nuclear weapons-related facilities is a response to the 2008 U.S.-India nuclear cooperation agreement is unclear. Islamabad does not have a public, detailed nuclear doctrine, but its “minimum credible deterrent” is widely regarded as designed to dissuade India from taking military action against Pakistan.

Pakistan has in recent years taken a number of steps to increase international confidence in the security of its nuclear arsenal. In addition to overhauling nuclear command and control structures since September 11, 2001, Islamabad has implemented new personnel security programs. Moreover, Pakistani and some U.S. officials argue that, since the 2004 revelations about a procurement network run by former Pakistani nuclear official A.Q. Khan, Islamabad has taken a number of steps to improve its nuclear security and to prevent further proliferation of nuclearrelated technologies and materials. A number of important initiatives, such as strengthened export control laws, improved personnel security, and international nuclear security cooperation programs have improved Pakistan’s security situation in recent years.

However, instability in Pakistan has called the extent and durability of these reforms into question. Some observers fear radical takeover of a government that possesses a nuclear bomb, or proliferation by radical sympathizers within Pakistan’s nuclear complex in case of a breakdown of controls. While U.S. and Pakistani officials continue to express confidence in controls over Pakistan’s nuclear weapons, continued instability in the country could impact these safeguards. For a broader discussion, see CRS Report RL33498, Pakistan-U.S. Relations, by K. Alan Kronstadt.


Date of Report: June 10, 2011
Number of Pages: 29
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Yemen: Background and U.S. Relations

Jeremy M. Sharp
Specialist in Middle Eastern Affairs

Unrest in the Arab world has amplified existing political tension in Yemen. Sustained mass protests and President Ali Abdullah Saleh’s attempts to preempt a broad crisis with concessions have concentrated U.S. and international attention on the daunting array of political and development challenges facing Yemen. Congress and U.S. policymakers may be concerned with prospects for stabilizing Yemen and establishing strong bilateral relations with future Yemeni leaders.

With limited natural resources, a crippling illiteracy rate, and high population growth, some observers believe Yemen is at risk for becoming a failed state. In 2009, Yemen ranked 140 out of 182 countries on the United Nations Development Program’s Human Development Index, a score comparable to the poorest sub-Saharan African countries. Over 43% of the population of nearly 24 million people lives below the poverty line, and per capita GDP is estimated to be between $650 and $800. Yemen is largely dependent on external aid from Persian Gulf countries, Western donors, and international financial institutions, though its per capita share of assistance is below the global average.

As the country’s population rapidly rises, resources dwindle, terrorist groups take root in the outlying provinces, and a southern secessionist movement grows, the Obama Administration and the 112th Congress are left to grapple with the consequences of Yemeni instability.

Over the past several fiscal years, Congress has appropriated an average of $20 million to $25 million annually for Yemen in total U.S. foreign aid. In FY2010, Yemen received $58.4 million in aid. The Defense Department also provided Yemen’s security forces with $150 million worth of training and equipment for FY2010. For FY2011, the Obama Administration requested $106 million in U.S. economic and military assistance to Yemen. For FY2012, the Administration has requested $115.6 million in State Department/USAID-administered economic and military aid.

In recent years, the broader U.S. foreign policy community has not adequately focused on Yemen, its challenges, and their potential consequences for U.S. foreign policy interests beyond the realm of counterterrorism. As President Obama and the 112th Congress reassess U.S. policy toward the Arab world, the political violence and uncertainty paralyzing Yemen throws the prospect of continued counterterrorism cooperation into question, to say nothing of U.S.-Yemeni cooperation in other economic or political reform efforts.

Whether terrorist groups in Yemen, such as Al Qaeda in the Arabian Peninsula (AQAP), have a long-term ability to threaten U.S. homeland security may determine the extent of U.S. resources committed to counterterrorism and stabilization efforts there. Some believe these groups lack such capability and fear the United States might overreact; others assert that Yemen is gradually becoming a failed state and safe haven for Al Qaeda operatives and as such should be considered an active theater for U.S. counterterrorism operations. Given Yemen’s contentious political climate and its myriad development challenges, most long-time Yemen watchers suggest that security problems emanating from Yemen may persist in spite of increased U.S. or international efforts to combat them.


Date of Report: June 8, 2011
Number of Pages: 36
Order Number: RL34170
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Egypt in Transition

Jeremy M. Sharp
Specialist in Middle Eastern Affairs

On February 11, 2011, President Hosni Mubarak resigned from the presidency after 29 years in power. For 18 days, a popular peaceful uprising spread across Egypt and ultimately forced Mubarak to cede power to the military. How Egypt transitions to a more democratic system in the months ahead will have major implications for U.S. foreign policy in the Middle East and for other countries in the region ruled by monarchs and dictators.

This report provides a brief overview of the transition underway and information on U.S. foreign aid to Egypt. U.S. policy toward Egypt has long been framed as an investment in regional stability, built primarily on long-running military cooperation and sustaining the March 1979 Egyptian-Israeli peace treaty. Successive U.S. Administrations have viewed Egypt’s government as a moderating influence in the Middle East. U.S. policy makers are now grappling with complex questions about the future of U.S.-Egypt relations and these debates are likely to influence consideration of appropriations and authorization legislation in the 112th Congress. The United States has provided Egypt with an annual average of $2 billion in economic and military foreign assistance since 1979. For FY2012, the Obama Administration has requested $1.551 billion in total aid to Egypt.


Date of Report: June 17, 2011
Number of Pages: 21
Order Number: RL33003
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