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Monday, October 17, 2011

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

Kenneth Katzman
Specialist in Middle Eastern Affairs

The UAE’s relatively open borders and economy 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. Its economic wealth has allowed the UAE to largely, although not entirely, avoid the popular unrest that has erupted elsewhere in the Middle East in 2011. Still, there is a public perception that members of the elite (the ruling families of the seven emirates and clans allied with them) routinely make national decisions unilaterally, obtain favored treatment in court cases, and are favored for lucrative business opportunities.

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 body, the Federal National Council (FNC), in December 2006. Possibly to try to ward off the unrest confronting other Middle East states, in March 2011 the government significantly expanded the electorate for the September 24, 2011, FNC election process. That election was characterized by very low turnout (about 25%), suggesting that the clamor for democracy in UAE remains limited or that the citizenry perceived the election as unlikely to produce change in UAE. 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 since 2004. In 2011, it sent police to help the beleaguered government of fellow Gulf Cooperation Council (GCC) state Bahrain, hosted meetings of the anti-Qadhafi opposition of Libya, joined a GCC diplomatic effort 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. The decline of the real estate sector affected property investors and the economies of several neighboring countries, including Afghanistan. The downturn contributed to 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: October
3, 2011
Number of Pages:
Order Number: R
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