Latest / Global Insights / Abu Dhabi’s Ascent: The UAE’s Global Strategy

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Abu Dhabi’s Ascent: The UAE’s Global Strategy · Global Insights

• 0:00
  SPEAKER_00: Ironically, it sees Saudi Arabia more as a threat to its interests than Iran.
• 0:05
  SPEAKER_00: Even today, even with the conflict where it is, it still still fears at some point Saudi Arabia will swallow it up.
• 0:15
  SPEAKER_01: In late April, the UAE walked out of OPEC.
• 0:18
  SPEAKER_01: It had been a member for nearly 60 years.
• 0:21
  SPEAKER_01: Now it can produce as much oil as it wants, and no one can produce it cheaper.
• 0:26
  SPEAKER_01: And oil is only part of the picture.
• 0:28
  SPEAKER_00: It's also avoided the spotlight for a long time as well.
• 0:32
  SPEAKER_00: And you know, it's managed that space extremely well.
• 0:38
  SPEAKER_01: The UAE, a small country with enormous wealth, has been quietly building military alliances, trade networks, and a deep partnership with Israel over the past two decades, while at the same time drifting further from Saudi Arabia, the dominant power in the region.
• 0:54
  SPEAKER_01: How did the UAE get here?
• 0:57
  SPEAKER_01: What's driving their expanding influence?
• 1:00
  SPEAKER_01: And how is it balancing relationships with Washington, Beijing, and Saudi Arabia?
• 1:05
  SPEAKER_00: As you know, an emerging or a rising middle power, we'll start to see some of some of the cracks, some of the ugliness there.
• 1:15
  SPEAKER_01: This is Global Insights by Network 2020.
• 1:19
  SPEAKER_01: Today, Abu Dhabi's Ascent.
• 1:28
  SPEAKER_01: Joining us today is Dr.
• 1:30
  SPEAKER_01: Neil Quilliam, Energy Policy, Geopolitics, and Foreign Affairs Specialist, and previous head of Chaham House's Future Dynamics in the Gulf Project.
• 1:40
  SPEAKER_01: Our conversation is moderated by Courtney Dockard, President of Network 2020.
• 1:48
  SPEAKER_02: Thank you, Neil, so much for joining us today.
• 1:51
  SPEAKER_02: It's such a pleasure to have you here.
• 1:54
  SPEAKER_02: Before we get to the news hook that really prompted us to have this conversation, I wanted to talk a little bit about your experience.
• 2:02
  SPEAKER_02: And one of the reasons why we wanted you in particular is because you have this energy experience, you have this understanding of the politics, and you've lived and worked in the region, which I think is critical.
• 2:12
  SPEAKER_02: So having lived and worked in across Saudi Arabia, UAE and Jordan, and across all of these sectors of government, energy, geopolitical risk, what did working in the region teach you about the UAE that someone who might just be looking at, let's say, headline diplomacy or energy policy might miss?
• 2:36
  SPEAKER_00: Thank you.
• 2:37
  SPEAKER_00: Thank you very much for inviting me today, and thank you very much for the question.
• 2:41
  SPEAKER_00: I think living and working in the UAE, what for me, what I really learned was that you cannot study it, you cannot understand it from the outside.
• 2:55
  SPEAKER_00: It is a highly securitized from a domestic intelligence point of view, it's a highly penetrated country.
• 3:04
  SPEAKER_00: It presents itself as being open, and it is open in many ways, and it has ministers of tolerance and it's had ministers of happiness.
• 3:14
  SPEAKER_00: And it does look in some way like a great place to live and work, and it is within certain confines.
• 3:23
  SPEAKER_00: It's UAE, I mean UAE is, you know, run by Abu Dhabi.
• 3:28
  SPEAKER_00: It looks like a very nice, shiny suite.
• 3:30
  SPEAKER_00: But when you un when you unwrap it and when you bite into it, there's there is a there's a bitterness there.
• 3:35
  SPEAKER_00: And that's not absolutely clear.
• 3:37
  SPEAKER_00: You can visit the country many times, you can live and work there and have very little understanding of that.
• 3:43
  SPEAKER_00: But because of the nature of my engagement in the country, I saw, you know, I saw the I saw some of the ugliness, which has never ever gone away.
• 3:53
  SPEAKER_00: Um, and what what's very interesting for me is that the UAE is probably amongst the Arab states in the region.
• 4:00
  SPEAKER_00: You know, it's managed its public relations far better than any other country there.
• 4:05
  SPEAKER_00: And it's managed to present itself in such a positive way.
• 4:08
  SPEAKER_00: And in other ways, I mean, you know, you've alluded to the FT series.
• 4:13
  SPEAKER_00: Um, it's also avoided the you know, the spotlight for a long time as well.
• 4:18
  SPEAKER_00: And you know, it's managed that space extremely well.
• 4:22
  SPEAKER_00: But I think, you know, as as it becomes more prominent, as its role becomes more prominent, as it sees itself and it very much does as you know an emerging or a rising middle power, we'll start to see some of some of the cracks, some of the ugliness there.
• 4:37
  SPEAKER_02: Thank you.
• 4:37
  SPEAKER_02: One of the reasons why the UAE is currently in the spotlight is because of its decision at the end of April to leave OPEC, which um has really brought it into the less in the shadows, let's say.
• 4:52
  SPEAKER_02: It's now no longer bound by production quotas, it has tremendous capacity.
• 4:58
  SPEAKER_02: And as the leader said, it was a decision that was based on their own strategic and economic vision for the country.
• 5:06
  SPEAKER_02: So I'd love to hear your take on this.
• 5:09
  SPEAKER_02: What changed, and how does this play into that larger strategic and economic vision?
• 5:18
  SPEAKER_00: Yes, thank you.
• 5:19
  SPEAKER_00: For those of us who watch it very closely, we we look at the energy picture and we certainly look at OPEC and uh and the region.
• 5:26
  SPEAKER_00: I mean, it came as no surprise.
• 5:28
  SPEAKER_00: It was clear to me, and another's not just me, of course, that the UAE was contemplating leaving back in 2020, 2021.
• 5:38
  SPEAKER_00: There were clear signs that it was very unhappy, uncomfortable, having to stick to a formula, a quota, sorry, that was based on a formula that it felt underrepresented its, you know, its productive capacity.
• 5:53
  SPEAKER_00: It felt that Russia was continuously cheating, it felt that the Iraqis were continuously cheating, the Kuwaitis were continuously cheating.
• 6:01
  SPEAKER_00: It wants to have that independence of action.
• 6:04
  SPEAKER_00: It's been concerned for quite some time that it has a tremendous hydrocarbon endowment underneath the sea or underneath underneath the land, and it does not want that to become a stranded asset.
• 6:16
  SPEAKER_00: It wants to be able to monetize that at the speed and the pace at which it can do so.
• 6:22
  SPEAKER_00: And it felt that you know operating and staying with inside OPEC was always going to be a constraint on that, and a constraint on increasing investment and sort of you know working working those assets.
• 6:35
  SPEAKER_00: So it was to me, it was it was fairly well telegraphed.
• 6:39
  SPEAKER_00: Um, the timing, obviously, very interesting.
• 6:42
  SPEAKER_00: Um, it showed it chose its moment well in the midst of the you know of the conflict.
• 6:49
  SPEAKER_00: It realized that if it pulled the plug at that particular moment from a material basis, it wouldn't necessarily be felt because we were all feeling the pain anyway, so it wouldn't be it wouldn't be an additional hit for it, but it would also mean, and you know, we're still talking about the reopening of Hormuz, so so we've still got that space to come.
• 7:10
  SPEAKER_00: But when Hormuz opens, when crude begins to flow ordinarily, you know, it will be in a position where it can just lift production.
• 7:21
  SPEAKER_00: I mean, it can produce somewhere around 4.8, 4.86 million barrels a day.
• 7:27
  SPEAKER_00: Its nameplate is 5 million, it wants to increase that even up to 5.5 million barrels.
• 7:33
  SPEAKER_00: So it can it can be an independent actor.
• 7:36
  SPEAKER_00: It's wanted to do that for some time, and this was the perfect moment in which you could do so because the impact wouldn't be felt, it would be preparing itself for when, you know, when when Hormuz opens, and lo and behold, it would be seen very positively by the US administration as well.
• 7:55
  SPEAKER_00: So it you know, it hit all the key points.
• 7:58
  SPEAKER_00: So no no real shock to anybody who was looking at this for some time.
• 8:03
  SPEAKER_00: And we all expected it, but it like one of those things, you just you don't quite know when it's going to come.
• 8:09
  SPEAKER_02: So following what was it, COP28, when they got a lot of countries on board with potential fossil fuel limitations.
• 8:15
  SPEAKER_02: I mean, that was really that was really just then.
• 8:20
  SPEAKER_02: And what they really, it sounds like what they really had in mind is how can we produce as much oil and use that because you referenced it not becoming a stranded asset for other vision, another economic vision, is that about right?
• 8:37
  SPEAKER_02: Are they worried that that the oil will just get trapped in the ground and then they won't be able to use it to finance other projects?
• 8:44
  SPEAKER_00: Exactly.
• 8:44
  SPEAKER_00: Exactly.
• 8:45
  SPEAKER_00: In a very in a sort of very simplistic manner, that's that's the way they envisage it.
• 8:49
  SPEAKER_00: You know, their their investment into renewables, their investment into their own, you know, civilian nuclear program is major and significant.
• 8:57
  SPEAKER_00: Those those are that's not greenwashing.
• 8:59
  SPEAKER_00: I mean, those are very real.
• 9:01
  SPEAKER_00: Those, you know, the the companies that they've invested in are making tremendous slots strides.
• 9:06
  SPEAKER_00: I mean, they want their cake and eat it, basically.
• 9:08
  SPEAKER_00: They they don't want to be left with these stranded assets.
• 9:10
  SPEAKER_00: And the other thing is as well, is along with Saudi Arabia, they can produce, they are the cheapest produced hydrocarbons in the world.
• 9:18
  SPEAKER_00: You know, so ultimately, as you know, as the cost of hydrocarbons goes up, as the resource draws down, they will still be the lowest cost producers.
• 9:26
  SPEAKER_00: So Saudi Arabia and the Emirates and the Emirates do not want to be in the shadow of Saudi Arabia, can produce it well, and can outcompete more expensive producers.
• 9:36
  SPEAKER_00: So they can stay longer in the game, get that hydrocarbon resource out, absolutely maximize that.
• 9:42
  SPEAKER_00: So for them, the transition will then be for them smooth.
• 9:46
  SPEAKER_02: Great, thank you.
• 9:46
  SPEAKER_02: And you also referenced the that Abu Dhabi really wants to sort of maintain its independence and be able to make its own decisions.
• 9:56
  SPEAKER_02: I'd like to just go back a little bit and understand how that decision-making process and whether or not that's part of the fabric of UAE's founding.
• 10:10
  SPEAKER_02: And you've written about, along with your colleague Sanat Vakil at Chatham House, comparing comparing the UAE to the Medici's of Italy the way back in the day, just in terms of the way that they operate through networks and are able to uh punch above their weight.
• 10:30
  SPEAKER_02: And so I'd love just to get a sense from you whether or not you feel that comparison is still apt and sort of how how the UAE has used that strategy.
• 10:43
  SPEAKER_00: Yes, I will, thank you.
• 10:45
  SPEAKER_00: I I think the factors that that that allowed us to you know draw those comparisons still very much sit there.
• 10:52
  SPEAKER_00: This is effectively a city-state.
• 10:55
  SPEAKER_00: It has tremendous wealth, it has spent the last, I mean, the last 40 years, you know, building out networks, but I would say it really started building out those networks, that diplomacy, that that patronage from after 9-11.
• 11:12
  SPEAKER_00: I think what we saw after 9-11, we saw Mohammed bin Zayed, who was then Crown Prince of Abu Dhabi, come into his own, come into the fore.
• 11:21
  SPEAKER_00: And I think after 9-11, you know, with the shock of having two Emiratis on board one of those flights, I think he took a decision that he would align the UAE, and Abu Dhabi is the dominant partner.
• 11:35
  SPEAKER_00: You know, the UAE is made of seven different Emirates.
• 11:37
  SPEAKER_00: Abu Dhabi is the main, is the dominant partner.
• 11:40
  SPEAKER_00: He would align it to the US.
• 11:42
  SPEAKER_00: He would deploy special forces in Afghanistan.
• 11:45
  SPEAKER_00: One of your colleagues has mentioned their role in Afghanistan, and begin to build out a series of long, durable networks.
• 11:55
  SPEAKER_00: It's a small state, it has something like 6% of the world's, I mean, it depends on which which factor you look at, but about 6% of the world's oil with a very small population.
• 12:06
  SPEAKER_00: So it's tremendously wealthy.
• 12:08
  SPEAKER_00: And it built out networks horizontally, vertically, it built out its diplomacy.
• 12:15
  SPEAKER_00: It's a small state next to Saudi Arabia.
• 12:18
  SPEAKER_00: It sees Saudi Arabia, I mean, I ironically, it sees Saudi Arabia more as a threat to its interests than than Iran.
• 12:25
  SPEAKER_00: Even today, even with the conflict where it is, it still still fears at some point Saudi Arabia will swallow it up.
• 12:34
  SPEAKER_00: Um, Qatar, Qatar has has a similar um concern and and fear.
• 12:42
  SPEAKER_00: And so if if one were to map out what what it's done over the sit since 9-11, you know, it's really elevated itself, it's really invested in diplomacy, it's brought into the country um and it and it's felt no qualm doing so.
• 12:59
  SPEAKER_00: It's brought in a lot of expertise um to work with, you know, work with senior um Emirati officials at every level.
• 13:08
  SPEAKER_00: It's brought them in.
• 13:10
  SPEAKER_00: Um when I first started going to the UAE, I mean, I sorry, I lived and I worked in the UAE, I left, I went back when I worked with control risks, and when one of the government agencies was one of our clients, and we we worked on a very big, big project.
• 13:26
  SPEAKER_00: And I I came across this sort of, I would call them a roller deck of living former special forces people that would be on retainer, they would be on call.
• 13:37
  SPEAKER_00: And if MBZ wanted one of them, he would just pick up the phone and they would come.
• 13:40
  SPEAKER_00: And it was fascinating.
• 13:42
  SPEAKER_00: Uh, and they would just they would just be there waiting in the wings, and and I, you know, I dealt with several of those from from former men from the SAS.
• 13:50
  SPEAKER_00: And it was clear that MBZ knew that they had to have expertise.
• 13:55
  SPEAKER_00: There was, they wanted to bring in expertise, and and they, you know, they've constructed this state.
• 14:00
  SPEAKER_00: They've done it quite differently from Qatar.
• 14:04
  SPEAKER_00: You know, Qatar has has built out, it does have a similar resource, um, it has built its networks, but there's something very distinctive, I think, about about the UAE, and something very distinctive about Abu Dhabi, and that it has taken a series of strategic decisions on who to put, where to put them, and how to build out.
• 14:26
  SPEAKER_00: And what I mean there is if you look at the MRAT ambassador to the US, uh, you know, Yusuf Al-Taber, I mean, he's been there since 2008.
• 14:36
  SPEAKER_00: Um, I mean, I whenever I come to DC, generally, I don't always get to see him because he's a little bit annoyed still about the foreign affairs article.
• 14:44
  SPEAKER_00: But generally, I generally I get to you know, I see him, and he will just sit there and he will map out what the vision of the UAE is.
• 14:53
  SPEAKER_00: It's no secret.
• 14:55
  SPEAKER_00: They want it to be very, very close to the US.
• 14:58
  SPEAKER_00: It's you know, it's tied its colours to the mass to the US.
• 15:01
  SPEAKER_00: And you know, we can get onto the Abraham Accords, but at some point it recognized that building out a relationship with Israel was critical and absolutely essential, and it has taken that decision.
• 15:14
  SPEAKER_00: Sorry, and finally, just to get back to the you know, to the to the Medici, you can also see that you know they they've invested in trade, finance, science, culture, you know, you have the Louvre in Abu Dhabi.
• 15:27
  SPEAKER_00: So in a way that they're trying to emulate that, but they are still a small city-state.
• 15:32
  SPEAKER_00: And unless they can manage the family affairs, and it's still a relatively small family, the Medici has lasted for you know a good 300 years.
• 15:40
  SPEAKER_00: I'm not sure that the Al-Nahyan, the ruling family of Abu Dhabi, will be able to sustain that and last 300 years because it's so small and there will be some international fighting somewhere along the way.
• 15:53
  SPEAKER_02: Thank you.
• 15:53
  SPEAKER_02: Um, the this was a great uh description.
• 15:58
  SPEAKER_02: Um, what I'd like to turn to the point you made about Saudi Arabia, because that seems like such an interesting relationship, I imagine that most people would think that, as you mentioned, they'd be looking at Iran as one of the biggest threats in the region.
• 16:15
  SPEAKER_02: And we'll talk about the Abraham Accords later on.
• 16:18
  SPEAKER_02: Um, but I'd love to talk about Saudi Arabia a bit because it seems like they've taken similar approaches and they're they've increasingly, they're increasingly diverging on several issues, whether it's foreign policy, energy policy, etc.
• 16:37
  SPEAKER_02: So in your mind, when did this relationship become, I don't want to use rivalry, but maybe it is a rivalry of and what parts of that are more embedded and what might just be temporary in passing?
• 16:55
  SPEAKER_00: So if we just go back very quickly to you know to the Arab Spring, Mohammed bin Zayed and MBZ took a very hard line on the Arab Spring.
• 17:05
  SPEAKER_00: And this was at the time when you know MBS was still was still new, but he was but he was in the wings.
• 17:12
  SPEAKER_00: So Saudi Arabia and the UAE came together during the Arab Spring.
• 17:16
  SPEAKER_00: They you know they saw the fall of Mubarak, they saw Gaddafi go.
• 17:22
  SPEAKER_00: This was a major concern.
• 17:23
  SPEAKER_00: So they they they coordinated and they worked very, very closely together after that.
• 17:29
  SPEAKER_00: And then from you know from 2015-2016, we saw MBS really coming into play.
• 17:36
  SPEAKER_00: He was becoming a prominent player.
• 17:38
  SPEAKER_00: And at that particular moment, MBZ was had been worried about Saudi Arabia for a long time.
• 17:44
  SPEAKER_00: It thought either Saudi Arabia is going to become even more conservative, even more religious, and will be disrupted by Al-Qaeda or other groups and will fragment, or it's going to become a huge regional player, um, big dominant player that he's going to have to manage.
• 18:05
  SPEAKER_00: And he he he sort of he he fostered a very good relationship with MBS.
• 18:11
  SPEAKER_00: He almost sort of took him under his wing.
• 18:13
  SPEAKER_00: Um he became, it was like Chu-Ta ChuTe, and that and that lasted for a good few years.
• 18:19
  SPEAKER_00: That lasted until about 2021.
• 18:22
  SPEAKER_00: And you can see, you know, he was encouraging, he was encouraging MBS to open up the country, to to liberalize with a very, very small L, you know, but at least in at least in the sort of social, in the social space, at least in the economic space.
• 18:39
  SPEAKER_00: And that relationship for for some time looked looked quite healthy.
• 18:43
  SPEAKER_00: And it seemed that you know that they were going to sort of, I guess, kind of rub along for for some time to come.
• 18:50
  SPEAKER_00: It didn't look like competition.
• 18:52
  SPEAKER_00: Um, but after 2021, we'd had we'd gone through a crisis with the Qatar crisis, if you recall, when Saudi the Emirates, Egypt and Bahrain uh called them a quartet, you know, blockaded Qatar, and they blockaded them for four years.
• 19:11
  SPEAKER_00: In 2021, the Kuwaitis brokered an agreement, an end to that situation.
• 19:18
  SPEAKER_00: And as a consequence of that, the Saudis and the Qataris grew close again, and the Emiratis and the Qataris still felt very distant from that point.
• 19:30
  SPEAKER_00: And that was really sort of the the turning point, I think, when MBS just felt that he'd come into his own.
• 19:37
  SPEAKER_00: He was, you know, he was now crown prince.
• 19:41
  SPEAKER_00: He did not think that he nor Saudi Arabia should be following a small country like the United Arab Emirates with his tiny population.
• 19:52
  SPEAKER_00: And we, you know, we begin to see a competition playing out.
• 19:57
  SPEAKER_00: MBS said any any any country, sorry, any major corporation that has interests in our country will have to set up its headquarters in Riyadh.
• 20:07
  SPEAKER_00: It can't have it in Abu Dhabi, it can't have it in Dubai.
• 20:10
  SPEAKER_00: I've worked on a number of projects in Saudi where where the test case comes down and it would come to me sometimes, it would say, Is Dubai doing this?
• 20:19
  SPEAKER_00: Does Dubai have this?
• 20:21
  SPEAKER_00: And I'd say yes.
• 20:21
  SPEAKER_00: I said, okay, then we're going to do it.
• 20:23
  SPEAKER_00: So there's there's a real competition, it's quite personal between the two men.
• 20:29
  SPEAKER_00: Saudi Arabia sees itself as the big player or one of the big players in the region, and it should be the dominant Arab force.
• 20:36
  SPEAKER_00: Whereas the Amaratis see themselves as a city-state, as this nimble, very well-endowed state that can hedge, that can punch way above its weight and look deep into the future.
• 20:50
  SPEAKER_00: It has a vision 2071 and you know, and plan out all the way there.
• 20:55
  SPEAKER_00: So they have very different visions of you know where they should be, where the countries sit in the region.
• 21:02
  SPEAKER_00: And you've now got this intense competition between the two men.
• 21:06
  SPEAKER_00: What once was you know, tutor and qt, but now um MBZ does not see MBS as a peer, and MBS does not see MBZ as a peer.
• 21:16
  SPEAKER_02: Interesting how so much comes down to relationships.
• 21:19
  SPEAKER_02: Um, I'd love to just take a look at a few more key bilateral relationships.
• 21:27
  SPEAKER_02: We've mentioned the Abraham Accords, the UAE, you know, is part of the Abraham Accords with Israel.
• 21:32
  SPEAKER_02: They did not recall their ambassador during everything that happened during Gaza.
• 21:38
  SPEAKER_02: They are, along with Saudi Arabia and a couple other countries, part of this planned IMEC corridor that runs from India through the Middle East into Europe.
• 21:48
  SPEAKER_02: So there's and includes Israel as well.
• 21:51
  SPEAKER_02: So I'd love to just dig into that relationship a little bit and understand where it stands with the UAE.
• 22:00
  SPEAKER_02: And Israel, how critical is that relationship?
• 22:03
  SPEAKER_02: And is it cooling at all publicly because of Gaza or not?
• 22:10
  SPEAKER_00: Thank you.
• 22:10
  SPEAKER_00: It's um it's a it's an important question.
• 22:12
  SPEAKER_00: And Sunam and I, we we wrote for Chatham House, gosh, about three or four years ago, we we wrote an in-depth kind of policy report looking at the relationship, looking at the bilateral relationship.
• 22:23
  SPEAKER_00: And what what we find then still very much holds true at the moment.
• 22:27
  SPEAKER_00: It's uh I think it's going to be a long, deep, enduring relationship.
• 22:32
  SPEAKER_00: I said earlier, I think you know, MBZ had made a decision, had made a calculation that it would it should establish formal relations with Israel.
• 22:42
  SPEAKER_00: Relations were already there, obviously.
• 22:44
  SPEAKER_00: Um they they just needed, in a sense, formalizing and sort of of bringing out.
• 22:49
  SPEAKER_00: I think if if you look at the the nature of the relationship, uh it's only deepened from security, from tech, from trade, from defense as well, of course.
• 23:03
  SPEAKER_00: Um with Israel, you know, supplying, allowing the use of the iron dome is is really you know is really quite something.
• 23:11
  SPEAKER_00: And I remember when you know when when we published our report, we were criticized a lot by a lot of commentators who were saying this relationship is going to be brittle.
• 23:21
  SPEAKER_00: There is no, and we made the point, there's very little people-to-people relations, and that's very, very true.
• 23:26
  SPEAKER_00: The Emiratis or the Abu Dhabians or the Nahians have made this decision that their future in the region will be better served by being very, very close and maintaining this tight relationship.
• 23:39
  SPEAKER_00: And to come back to you know, the El Otaba, I mean, he told Sanan and I, gosh, quite a long time ago, he said, you know, the decision was made that the way you know we can build our relationship to the US and make it strong and enduring is to work with Israel.
• 23:57
  SPEAKER_00: And it was sort of cementing, cementing the three things there.
• 24:00
  SPEAKER_00: The US relationship is absolutely fundamental for the UAE, no matter what it says, no matter what it does, it's that that is inbreakable, that is immovable, and Israel is part of that.
• 24:13
  SPEAKER_00: And the UAE sees its future in the region being served by being that close to Israel.
• 24:19
  SPEAKER_00: So very, very tight relationship.
• 24:21
  SPEAKER_02: Interesting.
• 24:22
  SPEAKER_02: So the UAE is pursuing this relationship with Israel because of its desire for strong ties with the US, which in a way almost sets it up, interestingly, with the elephant that always seems to be in the room, which is China, right?
• 24:37
  SPEAKER_02: I'd love just to talk about that relationship a little bit because it seems as though the UAE needs China more than China needs the U more than China needs the UAE.
• 24:49
  SPEAKER_02: And so I'd love just to get a sense from you, is that is that right?
• 24:55
  SPEAKER_02: I mean, I know China is a purchaser of UAE fossil fuels, also component parts.
• 25:02
  SPEAKER_02: So they really rely on China a lot.
• 25:05
  SPEAKER_02: Is hedging possible in this case, or is there a scenario where uh the UAE is forced to, let's say, choose between China and the US?
• 25:18
  SPEAKER_00: I mean, I think I think the Emirates are hedging and they and they will they will continue to hedge.
• 25:22
  SPEAKER_00: And your I think your characterization of the relationship with China is absolutely right.
• 25:27
  SPEAKER_00: And I think it's a characterization for actually for all six of the Gulf Arab states.
• 25:34
  SPEAKER_00: I remember working with one of my one of my former colleagues who was the British ambassador to you know to Saudi Arabia, and he'd previously been ambassador to the UAE, and he described um visiting Beijing with a Saudi delegation and separately with an Emirati delegation.
• 25:50
  SPEAKER_00: And this was back in 2012, 2013.
• 25:54
  SPEAKER_00: And he said it was very clear that both delegations had really wanted to cement their relationship with the Chinese and they wanted to go beyond a transactional relationship and make it a little bit more transformational.
• 26:07
  SPEAKER_00: But the Chinese had no interest in that whatsoever.
• 26:10
  SPEAKER_00: And you know, his characterization was the Chinese looked at these countries just simply as one big gas station.
• 26:16
  SPEAKER_00: You know, they just wanted to get their gas and they wanted to get it as cheap as as cheap as they can.
• 26:21
  SPEAKER_00: Now, for I think for the Emiratis, I think they will they will hedge, but they but they know, and the US has made it absolutely clear when when it comes to technology, when it comes to security, when it comes to chips, I mean there are there are issues in and around that security piece that you know they cannot have a relationship.
• 26:42
  SPEAKER_00: However is no longer welcome in the UAE.
• 26:45
  SPEAKER_00: So the US really called out the Emirates on that piece and they yielded.
• 26:50
  SPEAKER_00: They stepped back because they know their their best interests are with the US.
• 26:55
  SPEAKER_02: Thank you.
• 26:56
  SPEAKER_02: And just one more that I want to dig into a little bit at sort of Saudi adjacent, which is that on August 7th, I think it was Saudi Arabia, Pakistan, and Turkey just announced their Mecca Mutual Defense Pact.
• 27:09
  SPEAKER_02: And there's been, I think, a lot of public back and forth between the Emiratis and the Saudis on this.
• 27:14
  SPEAKER_02: And so, how much in your mind does this, keeping in mind that it's a defense pact, it's you know not economic, but you know, of course, has to do with security, how much does this show that they're hedging in genuinely different directions or um or are we just reading too much into this?
• 27:32
  SPEAKER_00: I think I think we're reading too much into it.
• 27:34
  SPEAKER_00: I I was in Riyadh about six weeks ago and I was speaking to some senior Saudi officials about about what was then being called STEP.
• 27:45
  SPEAKER_00: So that's before the defense agreement, so that you know, Saudi, Pakistan, Egypt, and Turkey.
• 27:52
  SPEAKER_00: So it was it was called STEP.
• 27:54
  SPEAKER_00: And this is an initiative driven by Saudi Arabia to bring those four states together.
• 27:59
  SPEAKER_00: Obviously, Egypt hasn't come part of the defense agreement, but to bring them together so that so they could coalesce around key common interests.
• 28:07
  SPEAKER_00: And I, you know, I asked them very directly, uh, you know, is this like an early formation of an alliance?
• 28:14
  SPEAKER_00: It's it's not they they have they have they have such different interests, right?
• 28:19
  SPEAKER_00: They have such different um conceptions of threat, and and they they also operate in different subregions as well.
• 28:26
  SPEAKER_00: So it's a nice thing to maybe co-coordinate or cooperate to a certain degree on some issues, but I don't see it as something solid, and you know, and it's counterpoised to the Emirati, to the you know, the Israeli relationship, whereas I see that as very, very strong.
• 28:42
  SPEAKER_00: And I think this is some kind of building on the side, trying to see what might work and how they can make these pieces work.
• 28:49
  SPEAKER_02: Great, thank you.
• 28:50
  SPEAKER_02: I'd love to just do a really quick lightning round.
• 28:54
  SPEAKER_02: So just a few questions, if you can kind of give the headline answer, like one sentence each.
• 28:59
  SPEAKER_02: Is the UAE's hedging strategy still working or is 2026 the year that it broke?
• 29:06
  SPEAKER_00: I think it's still working.
• 29:07
  SPEAKER_00: I think that MBZ has been able to use his, you know, his brother Tahnun to figure out that it has a response mechanism um that they can activate very, very quickly.
• 29:21
  SPEAKER_00: Excellent.
• 29:22
  SPEAKER_02: What's the biggest misconception about the UAE right now?
• 29:27
  SPEAKER_00: That it has been the most targeted state from Iran, uh, Kuwait, and Bahrain by now have taken far more hits than the UAE.
• 29:37
  SPEAKER_02: Interesting.
• 29:38
  SPEAKER_02: I did not know that.
• 29:39
  SPEAKER_02: What's the one development that you think everyone should watch next?
• 29:45
  SPEAKER_00: That that's the opening of Hormuz, and that is the fact that I believe that a service fee of some form will be imposed, and that that will be marketed as environmental tax, but the means through which vessels pass through Humuz has changed for a very long time.
• 30:05
  SPEAKER_02: Interesting.
• 30:06
  SPEAKER_02: All right, we have gone through a lot today.
• 30:09
  SPEAKER_02: Uh thank you so much, Neil, for just taking us through a bit of the history, the family structure, the way the emiratis operate, um, and sort of how these relationships are happening.
• 30:26
  SPEAKER_01: Thank you for joining us on this episode of Global Insights.
• 30:29
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• 30:36
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• 30:43
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