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 human trafficking, and opportunity for UAE-based Iranian businesses to try to circumvent international sanctions. The social and economic freedoms have not translated into significant political change; the UAE government remains under the control of a small circle of leaders who allow citizen participation primarily through traditional methods of consensus-building. To date, these mechanisms, economic wealth, and reverence for established leaders have enabled the UAE to avoid wide-scale popular unrest. Since 2006, the government has increased formal popular participation in governance through a public selection process for half the membership of its consultative body, the Federal National Council (FNC). But, particularly since the Arab uprisings that began in 2011, there has been an increase in domestic criticism of the unchallenged power and privileges of the UAE ruling elite as well as the spending of large amounts of funds on elaborate projects that cater to tourists. The leadership has resisted any dramatic or rapid further opening of the political process and has suppressed Muslim Brotherhood-linked Islamists and secular opposition activists, drawing substantial criticism from human rights groups.

On foreign policy issues, the UAE has become increasingly assertive in recent years to try to achieve regional stability, using primarily its ample financial resources. The UAE was the first Gulf state to order the most sophisticated missile defense system sold by the United States, demonstrating its support for U.S. efforts to assemble a regional missile defense network against Iran’s missile force. The UAE also has implemented significant financial and economic sanctions against Iran, while seeking maintaining trade and commercial ties with and thereby avoiding antagonizing that large neighbor. The UAE has deployed about 250 troops to Afghanistan since 2003 and pledges to keep some forces there after the existing international security mission there ends in 2014. In 2011, it sent 500 police to help fellow Gulf Cooperation Council (GCC) state Bahrain confront a major uprising by its Shiite majority; UAE pilots flew combat missions against Muammar Qadhafi of Libya; and the UAE joined the GCC diplomatic effort that brokered a political solution to the unrest in Yemen. The UAE is financially backing armed rebels in Syria and it is giving substantial aid to the transitional government of Egypt that followed the military ousting of President Mohammad Morsi, a Muslim Brotherhood leader. The UAE also donates large amounts of international humanitarian and development aid, for example for relief efforts in Somalia and for the Palestinians.

For the Obama Administration and many in Congress, there were initial concerns about the UAE oversight and management of a complex and technically advanced initiative such as a nuclear power program, particularly for the potential leakage for U.S. and other advanced technologies to leak illicitly to Iran. These concerns were 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, submitted to Congress that day, and entered into force on December 17, 2009. The concerns have since been largely alleviated by the UAE’s development of strict controls, capable management, and cooperation with international oversight of its nuclear program.

Date of Report: October 17, 2013
Number of Pages: 31
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Iran Sanctions

Kenneth Katzman
Specialist in Middle Eastern Affairs

Increasingly strict sanctions on Iran—sanctions that primarily target Iran’s key energy sector and its access the international financial system—have harmed Iran’s economy to the point where Iran’s public and some of its leaders appear willing to accept some international proposals to limit Iran’s nuclear program to purely peaceful purposes. The June 14, 2013, election as president of Hassan Rouhani, who ran on a platform that included achieving an easing of sanctions, is an indication of the growing public pressure on the regime. 

• Oil exports fund nearly half of Iran’s government expenditures, and Iran’s oil exports have declined to about 1.1 million barrels—less than half of the 2.5 million barrels per day Iran exported during 2011. The causes of the drop have been a European Union embargo on purchases of Iranian crude oil and decisions by other Iranian oil customers to obtain exemptions from U.S. sanctions by reducing purchases of Iranian oil. Twenty countries that buy Iranian oil have exemptions.

• The loss of revenues from oil, coupled with the cut-off of Iran from the international banking system, has caused a sharp drop in the value of Iran’s currency, the rial; raised inflation to over 50%, reduced Iran’s reserves of foreign exchange; and caused much of Iran’s oil revenues to go unused in third-country accounts. Iran’s economy shrank slightly from 2012 to 2013 and will likely do so again during 2013. There have also been unintended consequences, including a shortage of some advanced medicines.

• Iran has tried, with mixed success, to mitigate the effects of sanctions. Government-linked entities are creating front companies, and Iranian importers and exporters are increasingly using barter trade and informal banking exchange mechanisms. Iran is also increasing non-oil exports or exports of hydrocarbon products other than crude oil, such as gas condensates. Affluent Iranians have invested in—and driven up prices for—real estate and securities listed on the Tehran stock exchange. 

Sanctions might also be slowing Iran’s nuclear and missile programs by hampering Iran’s ability to obtain needed foreign technology. But U.S. assessments indicate that sanctions have not stopped Iran from developing new conventional weaponry indigenously. Based largely on its provision of arms to the embattled Assad government in Syria, Iran is also judged as not complying with U.N. requirements that it halt any weapons shipments outside its borders. And sanctions do not appear to have altered Iran’s repression of dissent or monitoring of the Internet.

Some in Congress believe that economic pressure on Iran needs to increase. In the 112th Congress, the Iran Threat Reduction and Syria Human Rights Act of 2012 (P.L. 112-158) made sanctionable the shipping of Iranian crude oil, and it enhanced human rights-related provisions of previous Iran-related laws. A provision of the FY2013 National Defense Authorization Act (P.L. 112-239) sanctions transactions with several key sectors of Iran’s economy. A bill in the 113th Congress, H.R. 850, passed by the House on July 31, 2013, would, among other provisions, accelerate the oil purchase reductions required to maintain a sanctions exemption. However, some argue that new sanctions should not be imposed until Rouhani’s diplomatic overtures on the nuclear issue are tested and that there be consideration of easing sanctions if a nuclear deal is reached. 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: October 11, 2013
Number of Pages: 80
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Afghanistan: Politics, Elections, and Government Performance

Kenneth Katzman
Specialist in Middle Eastern Affairs

The capacity, transparency, and legitimacy of Afghan governance are considered crucial to Afghan stability after U.S.-led NATO forces turn over the security mission to Afghan leadership by the end of 2014. The size and capability of the Afghan governing structure has increased significantly since the Taliban regime fell in late 2001, but the government remains weak and rampant with corruption. Even as the government has struggled to widen its writ, President Hamid Karzai has concentrated substantial presidential authority through his powers of appointment at all levels. But, he is constitutionally term-limited; presidential and provincial elections are scheduled for April 5, 2014, and Afghanistan is beginning to transition from the Karzai era. Several major figures—some close to Karzai and others opposed—have registered their tickets, several of which include significant faction leaders long accused of human rights abuses. Some candidates are concerned that Karzai will use state machinery to favor a particular candidate. Fraud in two successive elections (for president in 2009 and parliament in 2010) was extensively documented, but Afghan officials, scrutinized by opposition ties, civil society organizations, and key donor countries, have taken some steps to improve election oversight for the April 2014 elections.

Fears about the election process are fanned by the scant progress in reducing widespread nepotism and other forms of corruption. President Karzai has accepted U.S. help to build emerging anti-corruption institutions, but these same bodies have faltered from lack of support from senior Afghan government leaders who oppose prosecuting their political allies. At a donors’ conference in Tokyo on July 8, 2012, donors pledged to aid Afghanistan’s economy through at least 2017, on the condition that Afghanistan takes concrete, verifiable action to rein in corruption. Afghan progress on that issue was assessed relatively unfavorably at the end of a Tokyo process review meeting in Kabul attended by major donors on July 3, 2013.

No matter how the Afghan leadership succession process works out, there is concern among many observers that governance will founder as the United States and its partners reduce their involvement in Afghanistan. An informal power structure consisting of regional and ethnic leaders have always been at least as significant a factor in governance as the formal power structure, and they will likely bring the votes of their ethnic and regional followers to the presidential tickets some of them have joined. The faction leaders also lead or can recruit armed fighters, and several are reviving their armed militias in the event the end of the international security mission in 2014 produces instability. However, an increase in the influence of faction leaders could produce even more corruption, arbitrary administration of justice, and human rights abuses than has been the case since the international intervention in 2001.

President Karzai is appealing to nationalist sentiment to attract Taliban support to rejoin Afghan politics, but Afghan civil society activists, particularly women’s groups, assert that a full reintegration of the Taliban into Afghan politics could reverse some of the human and women’s rights gains since 2001. Those gains have come despite the persistence of traditional attitudes and Islamic conservatism in many parts of Afghanistan—attitudes that cause the judicial and political system to tolerate child marriages and imprisonment of women who flee domestic violence. Islam and tradition has also frequently led to persecution of converts from Islam to Christianity, and to curbs on the sale of alcohol and on Western-oriented programming in the Afghan media. See also CRS Report RL30588, Afghanistan: Post-Taliban Governance, Security, and U.S. Policy, by Kenneth Katzman; and CRS Report R41484, Afghanistan: U.S. Rule of Law and Justice Sector Assistance, by Liana Sun Wyler and Kenneth Katzman. .

Date of Report: October 10, 2013
Number of Pages: 62
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