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UAE Foreign Policy and Association of Energy Sources Research Paper


Introduction

The United Arab Emirates (UAE) is a country found in the Gulf region. Besides bordering Oman and Saudi Arabia, the country shares a maritime border with Iran. It is a key member and contributor to the MENA union that brings together Arab countries in the Middle East and North Africa. In the recent years, the UAE’s presence in the MENA region and world has been emphasized, owing to the country’s growth in wealth. Much of this wealth is attributed to the oil and gas export. Since oil was discovered in the country in 1966, the UAE has become a major exporter of petroleum in the world.

Each year, the UAE produces nearly 68 billion barrels of oil, most of which is exported to non-oil producing countries. Besides oil, the UAE controls large deposits of natural gas. As Dargin (2014) explains, the country is the sixth major producer of natural gas in the world. These vast resources grant the country huge influence on the international oil market and hence international politics. However, the UAE has not always been a wealthy nation. Prior to the discovery of oil and gas, the nation was mainly a subsistence economy, notwithstanding, the country was still engaged in trading with the outside world. Its strategic location at the gulf’s coast made it accessible, thus encouraging foreign trade. This factor would later prove useful in facilitating the export of oil and gas to other countries.

According to Al‐Suwaidi (2011), the UAE’s prospects changed for the better in 1973 after the world oil prices experienced a sharp rise. This period was occasioned by the fact that oil was becoming an increasingly important resource. Industries such as automobile had begun expanding in size to the extent of causing the demand for oil to rise. With its rising wealth, the UAE government decided to modernize the country, as well as increase its presence in the MENA region. Today, the country’s powerful economy makes it a major shaper of policy in the region and across the world. An illustration of this position is the recent involvement of the UAE in the Egyptian crisis that led to the ousting of Hosni Mubarak. After Mubarak’s ouster, the Muslim Brotherhood took the reins of power to the disappointment of the UAE government. As such, the UAE took a key role in the defeat of the Muslim Brotherhood and the subsequent rise to power by Fatah al-Sisi.

Research Objectives

This research seeks to examine whether oil and other energy sources affect the UAE’s foreign policy and security. From the time oil was discovered in the country, its involvement in the world politics increased significantly. It has continued to do so over the last 40 years. As well, the country’s military has become stronger, a sign that the country is more secure relative to how it was in the past. The UAE is located in a conflict-prone region, which makes national security a constant cause for concern. Despite these developments happening only after oil and gas were discovered, little research has been conducted to demonstrate the correlation between these resources and the country’s increased influence at the regional level. The researcher seeks to explore the few available studies that touch on the subject. At the end of this research, the research should be able to conclude with evidence that oil and gas have a shaping influence on the country’s foreign policy and security.

Thesis Statement

This paper argues that oil and natural gas have transformed how the UAE interacts with other countries (foreign relations) and that these resources have contributed substantially towards the strengthening of the country’s security. In other words, the production of oil and other energy sources in the UAE allows the country to pursue regional interests while also safeguarding its domestic security.

Significance of the Study

As already observed, the UAE plays a key role in influencing the foreign policy in the MENA region. Given this position, it is essential to understand the major factors, which dictate the country’s approach to foreign policy. Such information would be useful in shaping the country’s future policy. Importantly, the researcher will offer useful insights into the UAE’s ministry of foreign affairs concerning important decisions that are made every day touching on foreign policy. An effective foreign policy would be critical in pursuing the UAE’s international goals in the face of increasing globalization.

Concepts

An important concept for this study will be “foreign policy.” Foreign policy may be loosely defined as a laid-down framework that dictates how a country relates to other nations. Countries are sovereign entities that interact based on the agreeableness of their common interests. In other words, a country will only relate to another one based on how the other foreign nation’s policy favors its strategic goals. This claim is significant when it comes to designing a suitable foreign policy that a country must put forward to address its strategic interests and international goals. Overall, factors that influence the development of a foreign policy include domestic concerns, the policy/actions of other countries, and the geographical location of a nation. Importantly, foreign policy is designed to safeguard the security and defense of the country concerned. In the case of the UAE, strong relationships are built with countries that purchase its oil. In addition, the UAE has forged major partnerships with nations that can help to secure the country from external aggression.

According to Almezaini (2012), UAE’s foreign policy is based on the following fundamental goal: to enhance the country’s stability and independence through cooperation with other nations and non-state actors. In a sense, the goals listed above are to be found in the foreign policy of any country. However, the UAE’s foreign policy is made unique by two important factors, namely, the country’s small size and its vast wealth. Despite its small size, the UAE produces about 68 billion barrels of oil annually (Rieger, 2012). Further, its recoverable oil reserves are the largest in the world. The possession of vast oil and gas reserves grants the UAE a key role in international discussions regarding oil matters. For instance, the UAE is a key member of the OPEC, which brings together 13 oil-producing nations. Having a pivotal position at the OPEC enables the UAE to make major contributions regarding the oil markets. This way, the country influences decisions on the global market oil prices. It also assists in unifying petroleum policies. Through its contribution to the oil market, the UAE has emerged as an influential force among the oil-producing nations.

The concept of “security” should be understood to imply the domestic safety of the UAE. Being located in the conflict-torn Middle East, defense is a major concern for the small nation. Thus, it is expected that a sizeable chunk of the country’s revenue would be spent in securing the country from threats. Presently, the persisting threat of Daesh (ISIS) has piled pressure on the Middle East nations to safeguard their borders from being infiltrated by Islamic terrorists. It would appear that the UAE has succeeded in maintaining its territory free of terrorism, which would otherwise lead to drastic effects. This goal has been achieved because the nation relies enormously on tourism and aviation, two industries that cannot function effectively in the face of terrorism. This research hypothesizes that much of the revenue used to strengthen the UAE’s defense is obtained from the proceeds of exporting oil and gas.

The UAE has the second largest military budget in the Gulf region. The budget is commensurate with the country’s large GDP, particularly because of the prosperous oil trade. According to Korotayev, Issaev, and Shishkina (2016), between 30 and 35 percent of the UAE’s Gross Domestic Product (GDP) is obtained from exporting oil. The country spends an average of $14 billion annually to fund its military. A considerable portion of this military budget is supported by oil proceeds. Incidentally, the country’s strategic location makes it accessible, hence favoring its oil exporting businesses. The UAE borders the Arabian Peninsula to the south-east, the Arabian Gulf to the north, and the Gulf of Oman to the east. This strategic location means that even if one route were to be closed due to an international conflict, the country would still use the remaining routes to export its oil.

The concept of “national wealth” is of relevance to this research because the research seeks to establish a possible nexus between the UAE’s expanding wealth and its increased presence in the international arena. What happens in practice is that wealthy nations tend to come up with foreign policies that favor them. Conversely, poorer nations must shape their foreign policies on a compromise that appeases the wealthier nations. Given the above observation, it is the researcher’s contention that national wealth has a direct impact on the nature of a country’s foreign policy. As stated earlier, about a third of UAE’s national wealth is obtained from exporting oil. This wealth has a direct influence on the country’s foreign relations. Many countries today are luring the UAE to invest its oil proceeds in their economies. Other countries wish to invest in the robust UAE economy. As a result, the UAE gains a tremendous influence over these countries. In 2013, the country was ranked position 22 among the leading global investors (Barthel & Vignal, 2014). Additionally, it topped the global investment indicator among the Middle East countries. The UAE International Investments (UII) is one of the state-owned foreign investors whose aim is to diversify the country’s economy by holding assets in various nations.

Methodology

The research will be conducted through a case study methodology whereby the researcher will analyze both primary and secondary scholarly resources on the UAE’s foreign policy and national security. To achieve this goal, the researcher will carry out a library search for scholarly publications using the following key words: “foreign policy,” “national security/defense,” and “oil/gas.” The aim will be to obtain a range of relevant sources, then narrow down to a handful of them that are crucial to this study. One advantage of case study research over statistical research is that it allows the researcher to narrow down on a specific aspect of an entire research field.

In this case, the researcher’s interest concerns how oil and gas shape the UAE’s foreign policy and national security. In other words, in this case, relevant materials would be those that sought to answer the how and why these energy sources have a direct influence on the UAE’ foreign relations and defense. Case studies dwell on a contextual analysis of a few but informative events or conditions, including their relationship. In the present study, the researcher will examine real-life events such as the actions of the UAE at the regional and international stage and their relationship with the nation’s oil and gas wealth. This goal will be made possible through conducting a literature review on the area using primary and secondary sources to formulate and attempt to answer research questions relevant to the study.

Analysis

This part of the paper examines previous studies on the subject of the UAE’s foreign policy and security in an attempt to demonstrate the correlation between the country’s vast energy wealth and its foreign policy. The rather dramatic shift by the country from being moderate on the international scene to now being active has been the subject of discussion. As a result, various scholars have weighed in on the subject, citing different reasons for this transformation in the country’s foreign relations and concern about its security. One explanation emerges most convincing: the wealth obtained from exporting fuel has turned the nation into a key player on the international scene. Among the countries that have found interest in the UAE, some need the country’s oil while others wish to benefit from the petrodollars. In turn, the UAE benefits from being able to assert its influence on these countries. For the more powerful nations such as the western countries, the UAE benefits from collaborative military engagements and arms sales.

Almezaini (2012) has elaborated on the Gulf nation’s foreign policy and strategic goals, as well as how these goals are pursued. Particularly, the concept of foreign aid is used by the UAE government to expand its influence in the Middle East and North African region. Some major beneficiaries of the UAE’s foreign aid include Palestine and Pakistan. According to Almezaini (2012), the prosperous oil business of the UAE provides the country with surplus revenue that is then channeled to fund its interests abroad. Similarly, Kamrava (2012) argues that the UAE’s involvement in furthering the security of the MENA region is facilitated by the nation’s expansive wealth. An illustration is the recent intervention in the Egyptian crisis where the UAE government gave nearly $4.9 billion to help in stabilizing the Egyptian economy. Of all MENA member nations, the UAE remains the biggest contributor to the post-crisis Egyptian economy, which is by itself an illustration of how the country’s petrodollars are influencing its regional and international presence.

Aly and Monem (2014) estimate the UAE’s budget in the Egyptian crisis at $ 4.9 billion. Thus, the UAE surpassed Saudi Arabia as the biggest contributor to foreign missions among the MENA nations. It seems that the UAE is asserting itself as the major power in the region. A recent conflict with Qatar in which the UAE emerged the victor depicts a nation driven by the desire to assert itself among peers. In the conflict, the two nations disagreed over their respective views on the Muslim Brotherhood, with the UAE accusing Qatar of condoning terrorist activities. Naturally, the UAE is opposed to radical groups, which are seen as bad for business by the entrepreneurial nation. In the end, Qatar lost in the battle for supremacy as witnessed in one of the fronts where this ‘diplomat war’ was being waged: Egypt. While Qatar backed the Muslim Brotherhood in the recently concluded Egyptian rebellion, the UAE went for a more secular leadership, being that of Al-Sisi.

Various scholars believe that the crisis served as the turning point for the previously neutral nation. In many ways, the Arab Spring exerted pressure on all Arab governments. It prompted some to take drastic measures to prevent a replica of the scenarios on their soil (Bahgat, 2015). The UAE’s response was through financial and diplomatic intervention to help in restoring the Egyptian economy. The country spent billions on a mission to oust Mohamed Morsi, the Muslim Brotherhood-backed Egyptian leader, from power. The Muslim Brotherhood has been linked with terror activities both in Egypt and abroad, a factor that caused various leaders, among them His Highness Sheikh Zayed, to oppose his leadership. The UAE’s triumph in Egypt came when Morsi was overthrown. In his position, Al-Sisi took leadership of the North African nation. Hence, Al-Sisi’s ascension to power is a reflection of the UAE’s attempt to have a say at the regional level.

Another area where the UAE has asserted itself internationally regards the war against radical Islamism. As explained earlier, the country thrives on highly sensitive industries such as tourism and aviation. This means that any slight insecurity could cause a major drop in business prospects. An example is where the Emirates Airline Company was recently forced to cancel its flights over Turkey and other war-prone Middle East zones. Redirecting the routes cost the airline huge overheads. In addition, unrest in the region has been blamed for a drop in the number of tourists visiting the country in recent times. In the light of these situations, the UAE has remained dedicated to condemning terrorism that has become synonymous with the Middle East. So far, the country has succeeded in securing its territory from terror attacks on its soil. This goal has been made possible through well-equipped military and trained personnel. In other words, the UAE is using the oil revenue to fight terror activities in the region (Rieger, 2012). A major ally of the UAE in the fight against Islamic terrorism is the United States.

Korotayev et al. (2016) argue that UAE’s assertiveness in the fight against radicalized groups is a reflection of the country’s wider ambitions. This claim is particularly true given the size of military weaponry and personnel that the country has channeled in the recent fight against ISIL. Prior to the intervention in Syria, the UAE acquired sophisticated military equipment from the US at the cost of $22 billion. They included F-16 combat aircraft and Apache attack helicopters. These weapons were used during the fight against ISIS inside Syria. The UAE military operating from the Al-Dhafrah airbase coordinated the key air attacks.

Other nations that have partnered with the US in the fight against ISIL include Jordan, Qatar, and Bahrain. However, the UAE’s upfront role has captured international attention. Rieger (2012) asserts that the UAE’s central role in this fight against terror can be attributed to the country’s vast oil wealth in addition to the desire to protect its tourism and aviation interests. The US military has expressed satisfaction in the UAE’s dedication to eradicating radical groups in the region. In addition, the UAE took an active role in the recent Saudi-led military operation in Yemen. The country contributed about 63 percent of the military equipment used in this operation. Its participation and funding of the operation portrayed the country in a bad light because of the humanitarian crisis that resulted from the sustained attacks. Besides, the country’s active role in countering terrorism in the Gulf region portrays it as determined to influence the policy of the region in line with its strategic goals.

The UAE aligns itself with nations that are in pursuance of common goals, be they economic or political. Presently, the country’s major allies are other oil producing nations within the Organization of Arab Petroleum Exporting Countries (OAPEC). According to Barthel and Vignal (2014), the UAE plays an important role in the oil trading body. Through its financial influence, the country has been backing decisions aimed at controlling the output oil from the region. Reducing production is believed to be capable of stabilizing the otherwise volatile oil market (Barthel & Vignal, 2014). Cheap oil (due to overproduction) hurts the economies of oil producing nations. Thus, being a key member of OPEC offers an opportunity for the UAE to bargain fair trade deals for itself and its commercial partners. Numerous investors flock the country to invest in one or several of the promising industries, including tourism, aviation, and more importantly, the oil sector. Through foreign investments in the UAE, including the country’s shares abroad, the country has succeeded in spreading the influence of its foreign policy across continents.

The UAE is using its economic muscle to safeguard the market for its oil. As such, it is evident that the UAE’s interests in marketing its oil shape its foreign policy. Further, the UAE maintains close ties with the buyers of its oil, including India, the United States, and recently, Russia. This move is adopted to ensure a stable market for the UAE’s oil and gas, particularly in the recent times when oil prices are fluctuating too frequently. Additionally, the country seeks opportunities to invest the oil proceeds abroad to stimulate trade. Either way, the UAE has succeeded in designating itself as a center stage for international commerce, an aspect that has had a direct influence on the country’s foreign policy (Sulaymān, 2007). Interestingly, the UAE’s major trading partners double up as nations with vast military capabilities. This observation brings out other important facets of the UAE’s foreign policy, namely, defense and security.

The issue of national security is taken seriously in the UAE, majorly because of the country’s location in the conflict-torn Middle East. This claim can be illustrated by the fact that about 6.5 percent of the country’s GDP is channeled to the military. This focus on security has pushed the UAE into forming security deals with superpowers such as the US and the United Kingdom. Additionally, the country is a member of the Gulf Countries Corporation (GCC), a regional body that maintains a joint military to safeguard the region’s security. As his Highness Sheikh Zayed bin Sultan once stated, “We are building an Army not with the purpose of aggression or fighting another country, not for eventual expansion, but merely for self-defense” (Yakheek, 2003, p.14). The above statement illustrates the government’s dedication to safeguarding national security.

Presently, the UAE government faces the pressure to protect its oil and gas reserves, a situation that can form easy targets by Daesh fighters. In fact, oil and gas production facilities in the country are classified as critical infrastructure. A section of the UAE military titled Critical Infrastructure Coastal Patrol Agency (CNIA) is charged with safeguarding the oil and gas facilities among other things. The energy sector (with emphasis on oil and gas)of the UAE forms the chief source of livelihood since it contributes to about 25 percent of the national economy. Efforts are in place to diversify the economy, hence avoiding over-relying on oil (Cohen, Joutz, & Loungani, 2011). However, the mission is yet to be fully realized, meaning that oil and gas are simply the most important sources of livelihood for the UAE. For this reason, the government is contemplating control systems to protect the oil and gas facilities. In this sense, it is correct to argue that oil and gas in the UAE have led to the strengthening of defense and security.

The expansion in size and capability of the UAE military is another area that demonstrates the impact of oil and gas on security. It has increased in size over the last several years, particularly in the post-Arab Spring era. For a country that was hardly present in the international state, the UAE has undergone a major transformation. Recently, the UAE government has been engaged in the process of arming its military by acquiring sophisticated weapons, including fighter jets and missiles (Young, 2014).In August 2014, the UAE military joined their Egyptian counterparts in bombing Islamist militias that were threatening to capture Tripoli. More recently, the UAE and Egypt have intensified their military collaboration exercises, including performing joint drills and military training (Sgouridis, 2013). The show of might by the otherwise small Gulf nation is made possible by the vast wealth acquired from oil and gas. As Bremmer (2014) explains, the weaponry purchased by the UAE military is rather costly and that it can only be afforded by a wealthy nation. In 2013, the UAE’s military was the 15th largest in the world by the size of the expenditure (Korotayev, Issaev, & Shishkina, 2016).In the Gulf region, the UAE’s military budget is only second to Saudi Arabia’s at about $14 billion.

The recent military expansion by the UAE is reflective of the country’s independent foreign policy. While the nation engages joint military activities with the likes of the US, recent developments have seen the UAE attempt to chart an independent military path. For instance, when the UAE and Egypt decided to launch joint air strikes into Libya, neither of the countries bothered to inform the US, despite the latter being a key military partner of the UAE. As such, the UAE is determined to further its national security with or without military partners. Luckily, the country’s burgeoning economy allows room for the acquisition of sophisticated weapons, as well as maintaining a large army to safeguard its seven emirates. Presently, the UAE has an army of about 65000-trained military personnel. This military is large for a small nation, thus further illustrating the nation’s dedication to national defense. To sustain the large military personnel, some of which are expatriates, the government must rely on the revenue earned from exporting petroleum.

Conclusion

Since the UAE began exporting oil and gas, its presence across the world, especially in the MENA region, became quite pronounced. The country has participated in international missions, including the recent Egyptian crisis that led to Al-Sisi’s ascension to power. The purpose of this paper has been to demonstrate that much of UAE’s increased international presence can be attributed to the vast wealth acquired from exporting oil and gas. As well, the researcher maintains that oil and gas have boosted the country’s national security amid the increasing potential threat by armed terror groups operating in the region. Establishing a close nexus between these energy sources and the UAE’s foreign relations and national security is of importance to policymakers because understanding the factors that influence these two elements will lead to more informed decisions regarding both areas.

References

Almezaini, K. S. (2012). The UAE and foreign policy: Foreign aid, identities and interests. London, England: Routledge.

Al‐Suwaidi, A. (2011). The United Arab Emirates at 40: A balance sheet. Middle East Policy, 18(4), 44-58.

Aly, S., & Monem, A. (2014).Deciphering Abdel Fattah el-Sisi: President of Egypt’s third republic. Web.

Bahgat, G. (2015). Egypt in the aftermath of the Arab Spring: What lies ahead? Conflict Trends, 5(1), 3-9.

Barthel, P. A., & Vignal, L. (2014). Arab Mediterranean megaprojects after the ‘spring’: Business as usual or a new beginning? Built Environment, 40(1), 52-71.

Bremmer, I. (2014). The new rules of globalization. Harvard Business Review, 92(1), 103-107.

Cohen, G., Joutz, F., & Loungani, P. (2011). Measuring energy security: Trends in the diversification of oil and natural gas supplies. Energy policy, 39(9), 4860-4869.

Dargin, J. (2014). Oil production and consumption: Strategies for the UAE. Abu Dhabi, UAE: Emirates Center for Strategic Studies and Research.

Kamrava, M. (2012).The Arab spring and the Saudi-led counterrevolution. Orbis, 56(1), 96-104.

Korotayev, A., Issaev, L., & Shishkina, A. (2016). Egyptian coup of 2013: An ‘econometric’ analysis. The Journal of North African Studies, 21(3), 341-356.

Rieger, R. (2012). In search of stability: Saudi Arabia and the Arab spring. Cambridge, England: Gulf Research Center.

Sgouridis, S., Griffiths, S., Kennedy, S., Khalid, A., & Zurita, N. (2013). A sustainable energy transition strategy for the United Arab Emirates: Evaluation of options using an Integrated Energy Model. Energy Strategy Reviews, 2(1), 8-18.

Sulaymān, A. (2007). The petroleum experience of Abu Dhabi. Abu Dhabi, UAE: The Emirates Center for Strategic Studies and Research.

Yakheek, M. M. (2003). Strategic vision of His Highness Sheikh Zayed Bin Sultan Al Nahyan. Carlisle, PA: The United States Army War College.

Young, K. E. (2014). An emerging interventionist: Political economy of security in the UAE. London, England: Palgrave Macmillan.

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IvyPanda. 2020. "UAE Foreign Policy and Association of Energy Sources." November 14, 2020. https://ivypanda.com/essays/uae-foreign-policy-and-association-of-energy-sources/.

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