Order Code RS21852
Updated May 1October 11, 2007
The United Arab Emirates (UAE):
Issues for U.S. Policy
Kenneth Katzman
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
Summary
The United Arab Emirates (UAE), a leadership transition now complete, undertook
its first major electoral process in December 2006, although with a small, hand-picked
electorate and for a body with limited powers. The UAE’s open economy and society
has won praise but has contributed to proliferation, terrorist transiting, and human
trafficking, particularly in the emirate of Dubai. Since March 2005, the United States
and UAE have been negotiating a free trade agreement (FTA), although talks are making
only slow progress. This report will be updated. See also CRS Report RL31533, The
Persian Gulf States, Post-War Issues for U.S. Policy, 2006, by Kenneth Katzman.
Governance, Human Rights, and Reform1
The UAE is a federation of seven emirates (principalities): Abu Dhabi, the political
capital capital
of the federation; Dubai, its free-trading commercial hub; and the five smaller and less
wealthy emirates of Sharjah; Ajman;
Fujayrah; Umm al-Qawayn; and Ras al-Khaymah.
After Britain announced that it would
no longer ensure security in the Gulf, six “Trucial
States” decided to form the UAE
federation in December 1971; a seventh, Ras al-Khaymah, joined
in 1972. The UAE
federation has just completed a major leadership transition following the
death of its key
founder, Shaykh Zayid bin Sultan Al Nuhayyan, long-time ruler of Abu
Dhabi and UAE
President, on November 2, 2004. His son, Crown Prince Shaykh Khalifa
bin Zayid alNuhayyan, 59al-Nuhayyan, now about 60 years old, was immediately named ruler of Abu
Dhabi and, keeping with
tradition, was subsequently selected by all seven emirates as UAE president. Shaykh
Khalifa had been assuming a higher profile over the preceding years.
UAE president. The third son of
Zayid, Shaykh Mohammad bin Zayid al-Nuhayyan, is
Abu Dhabi Crown Prince and heir
apparent. The ruler of Dubai traditionally serves
concurrently as Vice President and Prime Minister of the UAE; that position was held by
1
Information in this section is from the following State Department reports: Country Reports
on Human Rights Practices-2006 (March 6, 2007); Supporting Human Rights and Democracy:
The U.S. Record 2006 (April 5, 2007); Trafficking in Persons Report for 20062007 (June 5, 200612, 2007);
and International Religious Freedom report - 20062007 (September 15, 2006).
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Prime Minister of the UAE; that position was held by 14, 2007).
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Shaykh Maktum bin Rashid Al
Maktum (son of and successor to UAE co-founder Shaykh
Rashid bin Sa’id Al Maktum)
from October 8, 1990, until his death on January 5, 2006.
He was succeeded in all his
positions by his younger brother, Mohammad bin Rashid Al
Maktum, architect of
Dubai’s modernization drive. Shaykh Mohammad also retained his
position as UAE
Defense Minister in the new cabinet he announcedcabinet named on February 9, 2006.
Each emirate has its own leadership (Sharjah and Ras al-Khaymah have a common
ruling family, the Al Qawasim tribe), and; all seven leaders sit on the Federal Supreme
Council, the UAE’s highest decision-making body. It meets four times per year to
establish general policy guidelines, although the leaders of the seven emirates consult
frequently with each other. The other leaders are Sultan bin Muhammad Al Qassimi
(Sharjah); Saqr bin Muhammad Al Qassimi (Ras al-Khaymah); Humaid bin Rashid Al
Nuaimi (Ajman); Hamad bin Muhammad Al Sharqi (Fujayrah); and Rashid bin Ahmad
Al-Mu’alla (Umm al-Qawayn).
The UAE is one of the wealthiest of the Gulf states, with a gross domestic product
(GDP) per capita of about $22,000 per year, and it has seen almost no unrest. Islamist
movements in UAE, including those linked to the Muslim Brotherhood, are generally
non-violent and perform social and relief work. However, UAE is surrounded by several
powers that dwarf it in size and strategic capabilities, including Iran, Iraq, and Saudi
Arabia, which has a close relationship with the UAE but views itself as the leader of the
Gulf monarchies. The population of the UAE is about 3.8 million, of which only about
800,000 are citizens, reflecting the heavy reliance on foreign (mostly South Asian) labor.
Most observers have long considered the UAE to beThe UAE has long lagged behind the other Persian Gulf
states in political reform, although
but the federation, and theseveral individual emirates, are now
beginning to move forward. Despite the December 2006 elections (discussed below), the
UAE still has no fully elected institutions, and citizens do not have the right to form
political parties. However, UAE citizens are able to express their concerns directly to the
leadership through traditional consultative mechanisms, such as the open majlis (council)
held by many UAE leaders. Freedom of assembly is forbidden by law, but in practice
small demonstrations on working conditions and some other issues have been tolerated;
in 2006 foreign laborers on a major Dubai tower project conducted a strike protesting
poor working conditions and non-payment of wages.
The beginning to move forward. The
most significant reform, to date, was announced in November 2005, when the
UAE UAE
government decided to begin electing half of the 40-seat Federal National Council
(FNC); the other 20 seats will be appointed. Previously, members of the FNC were
appointed by all seven emirates, weighted in favor of Abu Dhabi and Dubai (eight seats
each). Sharjah and Ras al-Khaymah have six each; and the others have four seats each.
In three rounds of voting during December 2006, a 6,690-person “electorate” (100 persons
for each FNC seat each emirate has, with each elector appointed by emirate leaderships)
chose among 438 candidates for the 20 FNC elected seats. There were 65 female
candidates, but only one was elected. All those elected, becauseBecause of the relatively
controlled process, are considered unlikely to challengethe
elected members are not assertively challenging established UAE leaders on major
issues.
Another eight women were appointed to the remaining 20 seats, filling out the
post-election postelection FNC. Plans are to expand the size of the FNC and then to broaden its
powers,
according to the Minister of State for FNC Affairs Anwar Gargash, who was
appointed appointed
in early 2006 to manage the new FNC reforms. Currently, the FNC can review,
CRS-3
but not
enact or veto, federal legislation, and it can question, but not impeach, federal
cabinet cabinet
ministers. Its sessions are open to the public. In addition to the FNC, each
emirate has its own consultative councils.
its own consultative councils.
Despite the reforms, citizens still do not have the right to form political parties.
Freedom of assembly is forbidden by law, but in practice small demonstrations on
working conditions and some other issues have been tolerated; in 2006 foreign laborers
on a major Dubai tower project conducted a strike protesting poor working conditions and
non-payment of wages. However, UAE citizens are able to express their concerns directly
CRS-3
to the leadership through traditional consultative mechanisms, such as the open majlis
(council) held by many UAE leaders.
Progress on women’s political rights has been more rapid. Since the November
2004 death of Shaykh Zayid, two women have been appointed to the cabinet: Shayha
Lubna al-Qassimi, Minister of Economy and Planning, and Mariam al-Roumi, Minister
of Social Affairs. In Sharjah emirate, seven women serve on its 40-seat consultative
council, up from five previously. About 10% of the diplomatic corps is now female,
compared to none serving prior to 2001. Other major cabinet choices signal commitment
to accelerating reform, including the appointment of the reform-minded Shaykh Abdullah
bin Zayid al-Nuhayyan as Foreign Minister. His former post of Information Minister was
abolished in 2006 in favor of allowing full media independence.
On other areas, the UAE record is less positive. The referenced State Department
reports point
out numerous restrictions such as on free assembly, freedom of speech, and
workers’
rights, and flogging penalties imposed by some courts. On religious freedom, nonMuslims
non-Muslims in UAE are free to practice their religion. There; there are 24 Christian churches built
built on land donated by the ruling families of the various emirates, but there are no Jewish
Jewish synagogues or Buddhist temples. The Shiite Muslim minority (about 15% of the
population) is free to worship and maintain its own mosques, but Shiite mosques receive
no government funds and there are no Shiites in top federal positions.
The Bush Administration says it is promoting democracy, rule of law, and civil
society in the Persian Gulf region. However, the 2006 democracy promotion report does
not contain a section on the UAE, apparently reflecting official UAE reluctance to support
U.S. efforts to promote reform there. Some programs to promote student and women’s
political participation, entrepreneurship, legal reform, civil society, independent media,
and international trade law compliance, are funded by the State Department’s Middle East
Partnership Initiative (MEPI).
Other social problems might be a result of the relatively open economy of the UAE,
particularly in Dubai. The Trafficking in Persons report for 2006 states that the UAE is
2007 again placed the UAE
on “Tier 2/Watch List” (up from Tier 3 last year) country on traffickingin 2005) because it does not
comply with the
minimum standards for the elimination of trafficking. but is making significant efforts to
do so. The UAE is considered
a “destination country” for women trafficked from Asia
and the former Soviet Union.
However, in NovemberDecember 2006, Shaykh Khalifa issued a
comprehensive law prohibiting
trafficking in persons. The UAE also has made progress
in curbing trafficking of young
boys as camel jockeys: it has repatriated at least 1,050
children out of a suspected 5,000
trafficked for camel racing, provided $3 million for their
care and repatriation, and it has
begun using robot jockeys at camel races. Another major problem is alleged trafficking
of as many as 10,000 foreign women for sexual exploitation, particularly in Dubai.
Cooperation Against Terrorism and Proliferation
The UAE was one of only three countries (Pakistan and Saudi Arabia were the
others) to have recognized the Taliban as the government of Afghanistan. During Taliban
rule (1996-2001), the UAE allowed Ariana Afghan airlines to operate service to UAE,
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and Al Qaeda activists might have spent time there.2 Two of the hijackers in the
September 11, 2001 attacks were UAE nationals, and the hijackers reportedly used UAEbased financial networks in the plot.
Since then, the UAE has publicly acknowledged assisting in the 2002 arrest of senior
Al Qaeda operative in the Gulf, Abd al-Rahim al-Nashiri.3 The State Department
“Country Reports on Terrorism: 2006, released April 30, 2007,” credits UAE with
denouncing regional terror attacks, improving border security, prescribing guidance for
Friday Friday
prayer leaders, investigating suspect financial transactions, and strengthening its
bureaucracy and legal framework to combat terrorism. The report adds that in December
In December 2004, the United
States and the emirate of Dubai signed a Container Security Initiative
Statement of Principles, aimed at
screening U.S.-bound containerized cargo transiting
Dubai ports. Under the agreement,
five U.S. Customs officers are co-located with the
Dubai Customs Intelligence Unit at
Port Rashid in Dubai.
Possibly on the strength of UAE-U.S. cooperation, an inter-agency “Committee on
Foreign Investment in the United States” approved the takeover by the Dubai-owned
“Dubai Ports World” company of a British firm that manages port facilities in New York,
New Jersey, Baltimore, New Orleans, Miami, and Philadelphia. Bi-partisan opposition
to the deal, on the groundsconcerned that the company might not vigilant ontakeover might weaken U.S. port security, was
expressed expressed
in a March 9, 2006, vote in the House Appropriations Committee (62-2) on a
provision provision
to block the deal (in a bill to provide FY2006 supplemental funding bill for Iraq and
Afghanistan war operations, P.L. Afghanistan, P.L.
109-234). The opposition caused the company to
announce it would divest assets
involved in U.S. port operations. That divestiture
occurred in late 2006 (to AIG Global Investments).
Investments). In September 2007, the Dubai stock exchange (Borse Dubai) announced
it plans to take a 20% stake in the Nasdaq stock market, although the announcement
appeared to generate less opposition than did the earlier ports deal.
Recent U.S. Aid to UAE
FY2005 and
FY2006
(Combined)
NADR (Non-Proliferation, AntiTerrorism, De-Mining, and Related) Anti-Terrorism Programs (ATA)
$1.094 million
NADR- Counter-Terrorism Financing
$300,000
(FY2006 only)
NADR-Export Control and Related
Border Security Assistance
$250,000
FY2007
Est.
FY2008
Request
$1.105 million
$230,000
International Military Education and
Training (IMET)
$15,000
International Narcotics and Law
Enforcement (INCLE)
$300,000
2
CRS conversations with executive branch officials, 1997-2000.
3
“U.S. Embassy to Reopen on Saturday After UAE Threat.” Reuters, March 26, 2004.
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The UAE record on stopping proliferation may be of concern. In connection with
revelations of illicit sales of nuclear technology to Iran, Libya, and North Korea by
Pakistan’s nuclear scientist A.Q. Khan, Dubai was named as a key transfer point for
Khan’s shipments of nuclear components. Two Dubai-based companies were apparently
involved in trans-shipping such components: SMB Computers and Gulf Technical
Industries.4 On April 7, 2004, the Administration sanctioned a UAE firm, Elmstone
Service and Trading FZE, for allegedly selling weapons of mass destruction-related
technology to Iran, under the Iran-Syria Non-Proliferation Act (P.L. 106-178, now retitled the
Iran-Syria Non Proliferation Act). Because of some ). Because
of these cases, in February 2007, the
Administration threatened to include UAE in a new
designation of “countries of concern
for diversion” of WMD-capable exports — with yet-to-be-determined
unspecified penalties. In
connection with the FNC approval of a draft law strengthening export controls in April
2007, the Administration, according to observers, said it would not so designate UAE.
Defense and Foreign Policy Cooperation
The UAE did not have close defense relations with the United States prior to the
controls (April 2007), the Administration did not so designate the UAE. In September
2007, the UAE used the new law to shut down 40 foreign and UAE firms allegedly
involved in illegal dual use exports to Iran and other countries.
Defense and Foreign Policy Cooperation
Following the 1991 Gulf war to oust Iraqi forces from Kuwait. After that war, the UAE, whose armed
armed forces number about 61,000, determined that it wanted a closer relationship with the
the United States, in part to deter and balance out Iranian naval power. UAE fears of Iran
escalated in April 1992, when Iran asserted complete control of the largely uninhabited
Persian Gulf island of Abu Musa, which it and the UAE shared under a 1971 bilateral
agreement. (In 1971, Iran, then ruled by the U.S.-backed Shah, seized two other islands,
Greater and Lesser Tunb, from the emirate of Ras al-Khaymah, as well as part of Abu
Musa from the emirate of Sharjah.) The UAE wants to refer the dispute to the
International Court of Justice (ICJ), but Iran insists on resolving the issue bilaterally. The
United States, which is concerned thatabout Iran’s military control over the islands could give
Iran the ability to operate against U.S. or international shipping in the Gulf, supports UAE
proposals butand supports
UAE proposals, but the United States takes no position on sovereignty of the islands. The
. The UAE, particularly Abu Dhabi, has
long feared that the large Iranian-origin community in
Dubai emirate could pose a “fifth
column” threat to UAE stability. column” threat to UAE stability. Illustrating the UAE’s
attempts to avoid antagonizing Iran, Iranian President Mahmoud Ahmadinejad was
permitted to hold a rally for Iranian expatriates in Dubai when he made the first high level
visit to UAE since UAE independence in 1971.
The framework for U.S.-UAE defense cooperation is a July 25, 1994, bilateral
defense pact, the text of which is classified. During the years of U.S. “containment” of
Iraq (1991-2003), the UAE allowed U.S. equipment pre-positioning, as well as and U.S. shipwarship
visits, at its large man-made Jebel Ali port, capable of handling U.S. aircraft carriers.
U.S. forces also use Al Dhafra air base (KC-10, U-2 flights, other aircraft) and naval
facilities at Fujairah to support of U.S. military operations in Iraq and Afghanistan, even
though UAE argues that the U.S. invasion of Iraq paved the way for Shiite Islamists to
take power in Iraq. About 1,800 U.S. forces, mostly Air Force, are in UAE, up from 800
in January 2002 and 1,500 at the time Operation Iraqi Freedom (OIF) began. The UAE
also allowed the United States to upgrade airfields in the UAE that were used for U.S. air
operations, mainly combat support flights, during OIF.5 The UAE has provided facilities
for Germany to train Iraqi police. UAE pledged $215 million for Iraq reconstruction but
has remitted virtually no funds as of May 1, 2006.Jebel Ali port, capable of handling aircraft carriers. The UAE allowed
the United States to upgrade airfields in the UAE that were used for U.S. combat support
flights, during OIF.5 About 1,800 U.S. forces, mostly Air Force, are in UAE, up from 800
before Operation Iraqi Freedom (OIF); they use Al Dhafra air base (KC-10, U-2 flights,
other aircraft) and naval facilities at Fujairah to support U.S. operations in Iraq and
Afghanistan, even though UAE says that the U.S. invasion of Iraq caused Shiite Islamists
to take power there. The UAE has provided facilities for Germany to train Iraqi police.
UAE pledged $215 million for Iraq reconstruction but has remitted virtually no funds as
4
5
Milhollin, Gary and Kelly Motz. “Nukes ‘R’ US.” New York Times op.ed. March 4, 2004.
Jaffe, Greg. “U.S. Rushes to Upgrade Base for Attack Aircraft.” Wall Street Journal, March
14, 2003.
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On the Arab-Israeli dispute, the UAE generally stays within a Gulf state consensus.
In 1994, itof September 2007, according to Iraq’s Ministry of Planning. It has an embassy in
Baghdad, and one of its diplomats was kidnaped in May 2006.
On the Arab-Israeli dispute, in 1994 the UAE joined with the other Gulf monarchies
in announcing an end to enforcement
of most aspects of the Arab League boycott of Israel
— the ban on companies doing
business with Israel and on companies that deal with
companies that do business with
Israel. However, the UAE formally maintains the
primary boycott, and it did not agree
to host an Israeli trade liaison office, although UAE
companies reportedly routinely do
do business with Israeli companies. Nor did UAEfirms. The UAE did not host multi-lateral
Arab-Israeli working
groups on regional issues when those talks took place during 1994-1998. On the other
hand, and UAE, in 2007,19941998. In 2007, the UAE has joined a “quartet” of Arab states (the others are Saudi
Arabia, Egypt, and Jordan) to assist U.S. diplomacy on Israeli-Palestinian issues.
U.S. Arms Sales. The UAE now believes thatviews arms purchases from the United
States enhanceas
enhancing the U.S. commitment to UAE security. In March 2000, the UAE signed
a contract to purchase purchased
80 U.S. F-16 aircraft, equipped with the Advanced Medium Range
Air to Air Missile
(AMRAAM), and the HARM (High Speed Anti-Radiation Missile) antiradar missile. The total sale value, including weapons and services, exceeded $8 billion.
, a deal exceeding $8
billion. Congress did not formally object totry to block the agreement, but some Members questioned the
AMRAAM sale as a first introduction of that weapon into the Gulf. Among recent sales,
on July 28, 2006, the Defense Security Cooperation Agency (DSCA) notified Congress
of a sale to UAE of 26 UH-60M Black Hawk helicopters with a possible value of $808
million. A sale of high Mobility Artillery Rocket Systems, valued at about $750 million,
was notified on September 21, 2006. A sale to UAE reportedly under consideration in
connection with the U.S.-led “Gulf Security Dialogue,” intended to help the Gulf states
contain Iran, is of the E-2D Hawkeye 2000, an early warning aircraft.6 According to UAE
officials, the UAE might buy an anti-ballistic missile system,6 and possibly also
anti-ballistic missile systems such as the Patriot (PAC-3). UAE is too wealthy to
receive receive
U.S. military aid, but somethe IMET is requested for FY2008 is to enable UAE to
receive receive
discount pricing to send its military officers to U.S. military courses.
Economic Issues
The UAE, a member of the World Trade Organization (WTO), has developed a free
market economy. Dubai’s Jebel Ali Free Trade Zone, begun in 1994, has become the fifth
largest such zone in the world, attracting over 900 international companies. On
November 15, 2004, the Administration notified Congress it had begun negotiating a free
trade agreement (FTA) with the UAE. Several rounds of talks have been held, although
progress has been halting, mainly because UAE feels it does not need the pact to keep its
economy vibrant and it is not willing to make some reforms, such as labor reform. The
Dubai Ports World controversy, discussed above, further slowed the talks. Despite the
economic diversification, the
UAE’s federal budget continues to rely on oil exports, which account for one third of
GDP. Abu . Abu
Dhabi has 80% of the federation’s proven oil reserves of about 100 billion barrels, and
oil accounts for about one-third of the UAE’s GDP. It is
barrels, enough for well over 100 years
of oil of exports at the current production rate of 2.2 million
barrels per day (mbd). Of that
amount, about 2.1 mbd are exported, but negligible
amounts go to the United States. The
UAE does not have ample supplies of natural gas,
and it has entered into a deal with
neighboring gas exporter Qatar to construct pipeline
that will bring Qatari gas to UAE
(Dolphin project).
crsphpgw
6
Stockman, Farah. “U.S. Looks to Sell Arms in Gulf to Try to Contain Iran.” Boston Globe,
March 21, 2007.