The United Arab Emirates (UAE): Issues for
U.S. Policy
Kenneth Katzman
Specialist in Middle Eastern Affairs
June 23, 2011
Congressional Research Service
7-5700
www.crs.gov
RS21852
CRS Report for Congress
P
repared for Members and Committees of Congress
The United Arab Emirates (UAE): Issues for U.S. Policy
Summary
The UAE’s relatively open borders, economy, and society have won praise from advocates of
expanded freedoms in the Middle East while producing financial excesses, social ills such as
prostitution and human trafficking, and relatively lax controls on sensitive technologies acquired
from the West. The UAE government is authoritarian, although it allows substantial informal
citizen participation and consensus-building. The openness of its society and its economic wealth
have allowed the UAE to largely, although not entirely, avoid the popular unrest in the Middle
East thus far. Still, there is a public perception that members of the elite (the ruling families of the
seven emirates and clans allied with them) routinely obtain favored treatment in court cases,
obtain access to lucrative business opportunities, and exert preponderant influence on national
decisions.
Until now, political reform has been limited and halting. After several years of resisting electoral
processes similar to those instituted by other Gulf states, and despite an absence of popular
pressure for elections, the UAE undertook its first electoral process for half the membership of its
consultative “Federal National Council” in December 2006. Possibly to try to ward off the unrest
confronting other Middle East states, in March 2011 the government altered rules for the
September 2011 election process that will allow more citizens to participate in the voting.
However, the government has not announced an expansion of the FNC’s powers, which some
intellectuals seek.
On foreign policy issues, UAE appears has become increasingly assertive in recent years. It has
deployed troops to Afghanistan and, in 2011, it has sent police to help the beleaguered
government of fellow Gulf Cooperation Council state Bahrain, hosted meetings of the anti-
Qadhafi opposition of Libya, attempted to broker a political solution to the unrest in Yemen, and
appointed an Ambassador to NATO.
The UAE’s growing assertiveness on foreign policy marks its recovery from the 2008-2009
global financial crisis and recession. The downturn hit Dubai emirate particularly hard and called
into question its strategy of rapid, investment-fueled development, especially of luxury projects.
Several Dubai banks required financial assistance from the federation government, which has
ample financial reserves in the form of sovereign wealth funds, to avoid defaults. Many expatriate
workers left UAE after widespread layoffs, particularly in the financial and real estate sectors,
and the decline affected property investors and the economies of several neighboring countries,
including Afghanistan. The downturn also touched Afghanistan in the form of major losses
among large shareholders of Kabul Bank, Afghanistan’s largest private banking institution.
For the Obama Administration and many in Congress, there are concerns about the UAE
oversight and management of a complex and technically advanced initiative such as a nuclear
power program. This was underscored by dissatisfaction among some Members of Congress with
a U.S.-UAE civilian nuclear cooperation agreement. The agreement was signed on May 21, 2009,
and submitted to Congress that day. It entered into force on December 17, 2009. However, expert
concerns about potential leakage of U.S. and other advanced technologies through the UAE to
Iran, in particular, remain. For details and analysis of the U.S.-UAE nuclear agreement and
legislation concerning that agreement, see CRS Report R40344, The United Arab Emirates
Nuclear Program and Proposed U.S. Nuclear Cooperation, by Christopher M. Blanchard and
Paul K. Kerr.
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The United Arab Emirates (UAE): Issues for U.S. Policy
Contents
Governance, Human Rights, and Reform..................................................................................... 1
Political Reforms: Background and Effects of 2011 Regional Unrest ..................................... 3
Political Unrest Largely Avoided in UAE ........................................................................ 4
Human Rights-Related Issues................................................................................................ 5
Press Freedoms ............................................................................................................... 5
Justice/Rule of Law......................................................................................................... 5
Women’s Rights.............................................................................................................. 6
Religious Freedom .......................................................................................................... 6
Labor Rights ................................................................................................................... 6
Human Trafficking.......................................................................................................... 7
Cooperation Against Terrorism and Proliferation ......................................................................... 7
Record on Proliferation Cooperation ............................................................................... 8
Nuclear Agreement ......................................................................................................... 9
Foreign Policy and Defense......................................................................................................... 9
Regional Security Cooperation With the United States ........................................................ 10
Iran............................................................................................................................... 11
Cooperation on Iraq ...................................................................................................... 12
Cooperation on Afghanistan and Pakistan...................................................................... 12
U.S. and Other Arms Sales ............................................................................................ 13
Other Regional Issues: Response to 2011 Unrest in the Middle East .................................... 13
Other Regional Issues: Arab-Israeli Dispute .................................................................. 14
Border Issues ................................................................................................................ 15
UAE Provision of Foreign Aid ...................................................................................... 15
Economic Issues ....................................................................................................................... 15
Oil and Gas Sector/Dedication to Future Clean Energy.................................................. 16
U.S.-UAE Free Trade Agreement Negotiations.............................................................. 16
Figures
Figure 1. Map of United Arab Emirates ....................................................................................... 3
Tables
Table 1. Recent U.S. Aid to UAE .............................................................................................. 17
Contacts
Author Contact Information ...................................................................................................... 17
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The United Arab Emirates (UAE): Issues for U.S. Policy
Governance, Human Rights, and Reform1
The United Arab Emirates (UAE) is a federation of seven emirates (principalities): Abu Dhabi,
the oil-rich capital of the federation; Dubai, its free-trading commercial hub; and the five smaller
and less wealthy emirates of Sharjah, Ajman, Fujayrah, Umm al-Qaywayn, and Ras al-Khaymah.
After Britain announced in 1968 that it would no longer ensure security in the Gulf, six “Trucial
States” decided to form the UAE federation in December 1971; Ras al-Khaymah joined in 1972.
The UAE federation has completed a major leadership transition since 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.
Shaykh Zayid’s son, Shaykh Khalifa bin Zayid al-Nuhayyan, born in 1948, was at that time
Crown Prince and was named ruler of Abu Dhabi upon Zayid’s death. In keeping with tradition,
although not formal law, Khalifa was subsequently selected by all seven emirates (Federal
Supreme Council) as 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 has been held by
Mohammad bin Rashid Al Maktum, architect of Dubai’s modernization drive, since the death of
his elder brother Maktum bin Rashid Al Maktum on January 5, 2006. Shaykh Mohammad bin
Rashid also continued as defense minister. The crown prince of Dubai is his son, Hamdan bin
Mohammad Al Maktum, who heads the “Dubai Executive Committee,” the equivalent of a
cabinet for Dubai emirate. Under a Dubai-level reorganization announced in January 2010, five
committees were set up to help the Executive Committee on various major issues.
The federation president and vice president serve five-year terms, but they technically owe their
positions to the UAE’s highest body, the Federal Supreme Council, which is composed of the
leaders of each of the seven emirates of the UAE. Two emirates, Sharjah and Ras al-Khaymah,
have a common ruling family: the Al Qawasim tribe. The Federal Supreme Council meets four
times per year to establish general policy guidelines, although the leaders of the seven emirates
consult frequently with each other. It met on November 3, 2009, to decide whether Shaykh
Khalifa and Shaykh Mohammad would continue in their posts and, as expected, no major changes
were made. In practice, posts at that level of UAE leadership change only in the event of death of
an incumbent.
A UAE cabinet reshuffle in May 2009 resulted in a change in two new deputy prime ministers,
one of whom serves concurrently as interior minister (the lead agency on internal security). The
shift was viewed by observers as strengthening the hand of Crown Prince Mohammad bin Zayid
because the new deputy prime ministers are close to him, although there are no evident rifts
between him and his brother, the UAE president.
1 Information in this section is from the following State Department reports: Country Reports on Human Rights
Practices-2009 (March 11, 2010); Trafficking in Persons Report for 2010 (June 14, 2010); and International Religious
Freedom report: 2010 (November 17, 2010).
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Some Basic Facts About UAE
Population
4.8 million, of which about 900,000 are citizens.
Expatriates are 85% of the work force.
Religions
96% Muslim, of which 16% are Shiite; 4% Christian and
Hindu
Ethnic Groups
19% Emirati (citizenry); 23% other Arab and Iranian; 50%
South Asian; 8% western and other Asian expatriate
Size of Armed Forces
About 50,000
Gross Domestic Product (purchasing power parity)
$201 billion; per capita is $42,000 per year
Inflation Rate
About 14.5%
GDP Growth Rate
5%+ (May 2011 Kuwait National Bank est.) but could
vary with oil price fluctuations
Oil Exports
About 2.7 million barrels per day
Foreign Exchange and Gold Reserves
About $67 billion, but some estimates of the value of its
sovereign wealth fund investments run into the several
hundreds of bllions of dollars.
U.S. Exports to the UAE (2010)
$11.68 billion, making UAE the largest U.S. export
market in the Arab world. Goods sold to UAE are
mostly machinery, aircraft, industrial materials, and other
high value items.
Imports from UAE by the United States (2010)
$1.145 billion. About half of the total was crude oil.
Other major categories include clothing and diamonds.
U.S. citizens resident in UAE
About 30,000
Major Projects
Dubai inaugurated 2,000+ foot “Burj Khalifa,” world’s
tal est building, on January 4, 2010. Dubai metro has
begun operations and is expanding service. Burj al Arab
hotel in Dubai bills itself as “world’s only 7-star hotel.”
UAE participating in Gulf country-wide railroad network
to become operational by 2017. Abu Dhabi has built local
branches of Guggenheim and Louvre museums.
Sources: CIA World Factbook.
The leaders of the other individual emirates are Dr. Sultan bin Muhammad Al Qassimi (Sharjah);
Saud bin Saqr Al Qassimi, (Ras al-Khaymah, see below); Humaid bin Rashid Al Nuaimi
(Ajman); Hamad bin Muhammad Al Sharqi (Fujayrah); and Saud bin Rashid Al-Mu’alla (Umm
al-Qaywayn). Shaykh Saud of Umm al-Qaywayn, who is about 58 years old, was named leader of
that emirate in January 2009 upon the death of his father, Shaykh Rashid Al-Mu’alla.
In Ras al-Khaymah, there was a brief leadership struggle upon the October 27, 2010, death of the
ailing longtime ruler, Shaykh Saqr bin Mohammad Al Qassim. He was succeeded by Shaykh
Saud bin Saqr, who was the crown prince since 2003 when the ruler replaced Saud’s elder
brother, Shaykh Khalid bin Saqr, as crown prince. During 2003-2010, often using public relations
campaigns in the United States and elsewhere, Shaykh Khalid had claimed to remain as crown
prince even though the UAE federal government had repeatedly stated that his removal was
legitimate and that he held no official position in the UAE. Shaykh Khalid’s home in Ras al-
Khaymah was surrounded by security forces the night his father died, enforcing the rulership
rights of Shaykh Saud.
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Figure 1. Map of United Arab Emirates
Source: CRS graphics.
Political Reforms: Background and Effects of 2011 Regional Unrest
The UAE is far from a democracy, but its openness and tolerance, coupled with ample wealth,
have enable the government to keep the population largely satisfied and unwilling to jeopardize
their economic benefits by challenging the system intently. Islamist movements in UAE,
including those linked to the Muslim Brotherhood, are generally non-violent and perform social
and relief work. UAE residents of Iranian origin tend to oppose their government’s frequent
criticisms of Iran, but this community does not constitute an organized opposition to the UAE
government. UAE leaders say that Western style-democracy focused on elections for all posts is
not needed in UAE because Emiratis are able to express their concerns directly to the leadership
through traditional consultative mechanisms, such as the open majlis (councils) held by many
UAE leaders, including Shaykh Khalifa.
Possibly because of the lack of significant domestic opposition, the UAE has lagged on political
reform. Until 2006, UAE leaders had not instituted any electoral processes, even as such elections
began to expand in the other Gulf states. UAE leaders argued that elections would inevitably
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aggravate long dormant schisms among tribes and clans and potentially cause Islamist factions to
become more radical. Formal political parties are not permitted.
Despite the absence of public agitation for political opening, the UAE leadership decided it had
fallen too far behind its Gulf neighbors and, in December 2006, it instituted a limited and
controlled electoral process for half of the 40-seat Federal National Council (FNC). The other 20
seats would still be appointed. Previously, all 40 members of the FNC were appointed by all
seven emirates. The seat distribution of the FNC remains 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.
The electorate was to be limited to a “local council,” convened by the rulers of each emirate,
numbering 100 persons per FNC seat. So, for example, the Abu Dhabi electoral council would be
100 x 8 = 800 electors, and the total UAE-wide electorate would be 4,000 persons. However, the
Election Commission approved a slightly larger 6,595-person electorate, or about 160 persons per
FNC seat. Of this total, 1,162 electors were women. Out of the total of 452 candidates for the 20
FNC elected seats, there were 65 female candidates. Only one woman was elected (from Abu
Dhabi), but another seven women were appointed to the remaining 20 seats. The “election”
process was spread over three different days—December 16, 18, and 20, 2006.
Even before the 2011 Middle East unrest, UAE plans were to gradually expand the size of the
FNC and to broaden its powers, according to the Minister of State for FNC Affairs (also Minister
of State for Foreign Affairs) Anwar Gargash and the FNC speaker Abdul Aziz al-Ghurair.
Currently, the FNC can review, but not enact or veto, federal legislation, and it can question, but
not impeach, federal cabinet ministers. It has questioned government ministers mostly on
economic and social issues although, in April 2009, the government prohibited the FNC from
discussing the economic ramifications for the UAE of the global financial downturn. Its sessions
are open to the public. According to the State Department, in 2008 the government accepted 80%
of the FNC’s recommendations on legislation. Each emirate also has its own consultative council.
No specific expansion of powers or time frames for such expansions have been announced, to
date. However, in an effort to address the 2011 Middle East unrest and demonstrate that it is
aware of popular calls for more political rights, on March 8, 2011, the government said the size of
the electorate will triple (to 300 times the number of seats up for selection) when the next FNC
election process is held on September 24, 2011. The announcement did not prevent the March 9,
2011, presentation of a petition to the leadership, signed by 160 UAE intellectuals, for free
elections to a body that would have powers similar to those of a Western-style parliament.2
Political Unrest Largely Avoided in UAE
The relatively minor reforms in the September 2011 FNC election process are not likely to satisfy
some UAE activists. However, in the aggregate, the UAE remains unlikely to face the widespread
popular unrest that has spread throughout the Middle East since the beginning of 2011. There
have not been demonstrations in UAE in 2011, although early in 2011 some UAE youth discussed
protests in social networking outlets such as Facebook and Twitter. The government reportedly
tried to block these sites in UAE to prevent word from spreading. In late February 2011, some of
these media were nonetheless used to call for a protest on March 25, 2011, a protest that did not
2 Al Jazeera News Network, March 9, 2011.
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materialize to any major extent. However, on April 8, 2011a prominent Dubai blogger and
activist, Ahmad Mansour Al Shehi, was arrested; his detention came two months after another
activist made a speech in Sharjah emirate in support of Egyptian protesters. Four other critics and
online activists were arrested later in April 2011, charged with violating the penal code that
prevents publicly humiliating senior officials; they appeared in court on June 15 and are
scheduled to appear again on July 18. During April and May 2011, the government dissolved the
elected board of directors of the Jurist Association and the Teachers Association, leading civil
society groups, after members of their boards signed petitions for political reforms.
In addition to arrests, the government has sought to use its ample financial resources to reduce
domestic unrest. In early March 2011, the government announced it would invest about $1.5
billion in utilities infrastructure of the poorer, northern emirates. It also raised military pensions
by 70% and introduced subsidies for some foodstuffs.
Human Rights-Related Issues
The human rights record of the UAE is relatively positive on some issues, but relatively poor on
others, according to U.S. and outside assessments. The State Department human rights report for
2010 was as critical of the UAE’s human rights practices as the 2009 report, asserting that there
are unverified reports of torture, government restrictions of freedoms of speech, and lack of
judicial independence. Some human rights problems in UAE, such as human trafficking, are
caused in part because the government is relatively lax in some cases, not because it is too strict.
Political rights and democratization are discussed above; among other specific measures, freedom
of assembly is forbidden by law, but in practice small demonstrations on working conditions and
some other issues have been tolerated.
The United States has sought to promote democracy, rule of law, and civil society in the Persian
Gulf region, including in UAE. Some State Department 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). The U.S. Embassy in Abu Dhabi houses a MEPI office/staff that
runs the MEPI programs throughout the Gulf region.
Press Freedoms
Some ministerial rank officials are committed to reform, including Foreign Minister Shaykh
Abdullah bin Zayid al-Nuhayyan and Minister of State Anwar Gargash, mentioned above. Shaykh
Abdullah’s former post of information minister was abolished in 2006 to allow media
independence. On the other hand, in April 2009, a new media law drew opposition from some
human rights groups who said it allows for penalties against journalists who personally criticize
UAE leaders. Provisions governing media licensing do not clearly articulate the standards the
government will apply in approving or denying licenses for media organs to operate. The UAE
government says the law does not apply to the “Free Zones” in UAE in which major foreign
media organizations operate.
Justice/Rule of Law
Many observers note that justice in UAE is selective. For example, on January 10, 2010, a UAE
court acquitted the UAE president’s brother, Shaykh Issa bin Zayid Al Nuhayyan, on charges of
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torturing an Afghan merchant. He was acquitted even though there was a video available of
Shaykh Issa beating the Afghan and driving over his legs with a sport vehicle, and even though
three others involved in the incident, all non-royals, were convicted. The UAE court ruled that
Shaykh Issa was not liable because he was taking prescription drugs that may have prompted his
actions.
The UAE justice system has often come under criticism when expatriates are involved. Many
reports indicated that arrests of expatriates and non-citizens increased during the 2008-2009
financial crisis, possibly out of citizen frustration that globalization and dramatic economic
expansion have led to bursting of the economic “bubble” in UAE. In 2007, human rights groups
criticized the conservative-dominated justice system for threatening to prosecute a 15-year-old
French expatriate for homosexuality, a crime in UAE, when he was raped by two UAE men; the
UAE men were later sentenced for sexual assault and kidnapping. In May 2011, a UAE judge
sentenced an American to one month in jail for possessing police handcuffs.
In terms of process, there is a dual court system. Sharia (Islamic law) courts adjudicate criminal
and family law matters. Civil courts adjudicate civil law matters. There is a Federal Supreme
Court that exercises judicial review over the civil court system, but its writ does not extend to
Abu Dhabi, Dubai, or Ras al-Khaymah.
Women’s Rights
Progress on women’s political rights has been steady and observers say the UAE is perhaps the
only country in the Middle East where expatriate women are fully accepted working in high-
paying professions such as finance and banking. There are now four women in the cabinet:
Shayha Lubna al-Qassimi, minister of foreign trade and planning; Mariam al-Roumi, minister of
social affairs; and two ministers without portfolio—Reem al-Hashimi and Maitha al-Shamsi.
Nine women are in the Federal National Council, and seven women serve on the 40-seat
consultative council in Sharjah emirate. About 10% of the UAE diplomatic corps is now female;
none served prior to 2001. In November 2008, Dubai emirate appointed 10 female public
prosecutors. The UAE Air Force has four female fighter pilots.
Religious Freedom
The November 17, 2010, State Department report on international religious freedom repeated the
previous year’s assessment that there was “no change” in the status of respect for religious
freedom by the government during the reporting period.” The constitution provides for freedom
of religion but also declares Islam as the official religion of the country. In practice, non-Muslims
in UAE are free to practice their religion; there are 34 Christian churches built on land donated by
the ruling families of the various emirates, but there are no Jewish synagogues or Buddhist
temples. The Shiite Muslim minority is free to worship and maintain its own mosques, but Shiite
mosques receive no government funds and there are no Shiites in top federal posts.
Labor Rights
On several occasions, foreign laborers working on the large, ambitious construction projects in
Dubai have conducted strikes to protest poor working conditions and non-payment of wages.
Some of these concerns have been addressed by the Labor Ministry’s penalizing of employers,
and a process, formulated in June 2008, to have workers’ salaries deposited directly in banks.
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Human Trafficking
Other social problems might be a result of the relatively open economy of the UAE, particularly
in Dubai. The UAE is still considered a “destination country” for women trafficked from Asia and
the former Soviet Union. The Trafficking in Persons report for 2010 placed the UAE in “Tier
2”—an upgrade from the “Tier 2: Watch List” placement in 2009. The 2010 upgrade was made on
the grounds that the UAE is taking steps to eliminate trafficking in persons, particularly against
sex trafficking offenders. The UAE 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 now uses robot jockeys at
camel races.
Cooperation Against Terrorism and Proliferation
These issues are of particular concern to the United States because of a pattern of lax UAE
enforcement of export and border controls, with respect particularly to the leakage of U.S. or
other technology to Iran. The relatively small sums of U.S. aid to UAE are generally for programs
to improve UAE performance on enforcing export control laws.
The UAE was one of only three countries (Pakistan and Saudi Arabia were the others) to have
recognized the Taliban during 1996-2001 as the government of Afghanistan, even though the
Taliban was harboring Osama bin Laden and other Al Qaeda leaders during that time. During
Taliban rule, the UAE allowed Ariana Afghan airlines to operate direct service, and Al Qaeda
activists reportedly spent time there.3 Two of the September 11 hijackers were UAE nationals,
and they reportedly used UAE-based financial networks in the plot.
Since then, the UAE has been credited in State Department “Country Reports on Terrorism” with
assisting in the arrests of senior Al Qaeda operatives;4 denouncing terror attacks; improving
border security; prescribing guidance for Friday prayer leaders; investigating suspect financial
transactions; criminalizing use of the Internet by terrorist groups, and strengthening its
bureaucracy and legal framework to combat terrorism. The UAE Central Bank is credited in the
State Department terrorism report for 2008 and 2009 with providing training programs to UAE
financial institutions on money laundering and terrorism financing, although actions against
informal financial transmittals (hawala) require “further vigilance.” It was reported in September
2009 that earlier in 2009, UAE security officials had broken up an Al Qaeda plot to blow up
targets in Dubai emirate.5 UAE authorities assisted in foiling an October 2010 Al Qaeda in the
Arabian Peninsula plot to send bombs to the United States. In November 2010, the UAE’s
National Committee to Combat Terrorism announced that the UAE was reviewing a 2004
counterterrorism law to better fight evolving threats and money laundering.
The UAE has signed on to several U.S. efforts to prevent proliferation and terrorism. These
include the Container Security Initiative Statement of Principles, aimed at screening U.S.-bound
containerized cargo transiting Dubai ports. Under it, three U.S. Customs and Border Protection
3 Department of State. Office of the Coordinator for Counterterrorism. Country Reports on Terrorism 2009. August 5,
2010. CRS conversations with executive branch officials, 1997-2000.
4 “U.S. Embassy to Reopen on Saturday After UAE Threat.” Reuters, March 26, 2004.
5 Lake, Eli and Sarah Carter. “UAE Kept Tight Lid on Disrupted Terror Plot.” Washington Times, September 17, 2009.
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officers are co-located with the Dubai Customs Intelligence Unit at Port Rashid in Dubai. The
program results in about 20 ship inspections per week of U.S.-bound containers, many of them
apparently originating in Iran, according to the State Department terrorism report for 2008
(published April 30, 2009). The UAE is a signator to the proliferation Security Initiative, the
Megaports Initiative designed to prevent terrorist from using major ports to ship illicit material,
and the Customs-Trade Partnership Against Terrorism.
Record on Proliferation Cooperation
The UAE record on preventing the re-export of advanced technology, particularly to Iran, is
mixed, although said to be improving as of mid-2010. Taking advantage of geographic proximity
and the high volume of Iran-Dubai trade ($10 billion per year), numerous Iranian entities
involved in Iran’s energy sector and its WMD programs have offices in the UAE that are used to
try to procure needed technology and equipment. However, the UAE has enhanced its
cooperation at times when U.S. officials or outside experts have questioned its performance. 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
transshipping components: SMB Computers and Gulf Technical Industries.6 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). In June 2006, the Bureau of Industry and Security (BIS) released a general
order imposing a license requirement on Mayrow General Trading Company and related
enterprises in the UAE. This was done after Mayrow was implicated in the transhipment of
electronic components and devices capable of being used to construct improvised explosive
devices (IED) used in Iraq and Afghanistan.7
In February 2007 the Administration threatened to form a new category of control called
“Destinations of Diversion Control” with UAE as the intended designee country, and a 2010 Iran
sanctions law, the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA,
P.L. 111-195) set up a provision for a category of countries similar to that, which would be
sanctioned (restrictions on dual use U.S. exports) for a determination of non-cooperation. Earlier,
in September 2007, the FNC headed off U.S. penalties by adopting a law strengthening export
controls (April 2007). In September 2007, the UAE used the new law to shut down 40 foreign
and UAE firms allegedly involved in dual use exports to Iran and other countries. However, UAE
officials publicly acknowledged that the UAE’s application of this law is still evolving. On July
22, 2010, Deputy Assistant Secretary of State for International Security and Nonproliferation
Vann Van Diepen testified before the House Foreign Affairs Committee (Subcommittee on
Terrorism, Nonproliferation and Trade) that the UAE is augmenting the staff of the office that
implements the 2007 law. He added that the UAE’s enforcement bodies— customs, law
enforcement, and intelligence services—are functioning to that end.8
Still, allegations continue to emerge periodically. In January 2009, the Institute for Science and
International Security issued a report entitled “Iranian Entities’ Illicit Military Procurement
6 Milhollin, Gary and Kelly Motz. “Nukes ‘R’ US.” New York Times op.ed. March 4, 2004.
7 BIS, “General Order Concerning Mayrow General Trading and Related Enterprises,” 71 Federal Register 107, June 5,
2006.
8 Testimony of Mr. Vann Van Diepen before the House Foreign Affairs Committee. July 22, 2010.
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Networks,” published January 12, 2009. The report asserts that Iran has used UAE companies to
obtain technology from U.S. suppliers, and that the components obtained have been used to
construct improvised explosive devices (IEDs) shipped by Iran to militants in Iraq and
Afghanistan. Other UAE companies the report alleges were involved in this network included not
only Mayrow but also Majidco Micro Electronics, Micatic General Trading, and Talinx
Electronics.
The issue of leakage of technology has sometimes caused U.S. criticism or questioning of UAE
investment deals. In December 2008 some Members of Congress called for a review by the inter-
agency “Committee on Foreign Investment in the United States” (CFIUS) of a proposed joint
venture between Advanced Micro Devices and Advanced Technology Investment Co. of Abu
Dhabi for the potential for technology transfers. In February 2006, CFIUS approved the takeover
by the Dubai-owned “Dubai Ports World” company of a British firm that manages six U.S. port
facilities. Members, concerned that the takeover might weaken U.S. port security, opposed it in
P.L. 109-234, causing the company to divest assets involved in U.S. port operations (divestment
completed in late 2006 to AIG Global Investments). Little opposition was expressed to a
September 2007 Borse Dubai plan to take a 20% stake in the NASDAQ stock market, or to a
November 2007 investment of $7.5 billion in Citigroup by the Abu Dhabi Investment Authority
(ADIA), which manages excess oil revenues estimated at over $500 billion.
Nuclear Agreement
It is the concern about the leakage of technology to Iran, via the UAE, that underpins much of the
concern about a U.S.-UAE agreement, signed January 15, 2009, to help the UAE develop a
nuclear power program. The agreement, which was revised slightly and signed again by the
Obama Administration on May 21, 2009 (and submitted to Congress that day), would be subject
to conditions specified in Section 123 of the Atomic Energy Act of 1954 [42 U.S.C. 2153(b)], and
was subject to congressional approval (in the form of passage of a joint resolution of approval or
non-passage of a joint resolution of disapproval within 90 days of continuous legislative session
following the May 21 submission). In the 111th Congress, concerns were encapsulated in H.R.
364, which would require the President to certify that the UAE has taken a number of steps to
stop illicit trade with Iran before any agreement would take effect. However, several
congressional resolutions of approval of the agreement (S.J.Res. 18 and H.J.Res. 60) have been
introduced, whereas one resolution of disapproval (H.J.Res. 55) was introduced. No measure
blocking the agreement was enacted, and the “1-2-3 Agreement” entered into force on December
17, 2009. UAE officials say they will augment their safety review processes for their reactors to
take into account lessons learned from the earthquake/tsunami-induced 2011 crisis at Japan’s
Fukushima nuclear plants. See CRS Report R40344, The United Arab Emirates Nuclear Program
and Proposed U.S. Nuclear Cooperation, by Christopher M. Blanchard and Paul K. Kerr.
Foreign Policy and Defense
Following the 1991 Gulf War to oust Iraqi forces from Kuwait, the UAE determined that it
needed a closer security relationship with the United States. The UAE did not fear a direct threat
from Saddam Hussein’s Iraq, which is at the north end of the Persian Gulf, but it primarily sought
to deter and balance out Iranian power, which remains the primary UAE concern. As discussed
below, its actions and responses to the 2011 unrest in the Middle East suggest that the UAE is
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taking a more assertive foreign policy posture than it has in the past, including participating in
military operations far from its borders.
In addition, in recent years, perhaps deciding it cannot rely solely on the United States, the UAE
has sought to broaden its defense relationships. 2004, the UAE joined NATO’s “Istanbul
Cooperation Initiative,” which was launched that year by NATO as an effort to bolster bilateral
security with Middle Eastern countries. In May 2011, the UAE requested to send an Ambassador
to NATO under a new alliance policy approved by the organization in April 2011; the request is
subject to NATO concurrence. In January 2008 the UAE signed an agreement with French
President Nicolas Sarkozy to allow a French military presence. The facilities were inaugurated
during a visit by Sarkozy to UAE on May 27, 2009, and include (1) a 900-foot section of the
Zayid Port for use by the French navy; (2) an installation at Dhafra Air Base to be used by
France’s air force; and (3) a barracks at an Abu Dhabi military camp that will house about 400
French military personnel. On the other hand, in October 2010, the UAE reportedly threatened to
ask Canada to evacuate a UAE base, Camp Mirage, used by Canada as a staging point for its
forces to deploy to Afghanistan, when Canada refused additional landing slots in Canada for
Emirates Air.9 The two countries reportedly agreed to try to negotiate a solution to the mutual
concerns.
Regional Security Cooperation With the United States
The UAE is one lynchpin of U.S. strategy to defend the Gulf, despite the small size of the UAE
armed forces (about 50,000). The framework for U.S.-UAE defense cooperation is a July 25,
1994, bilateral defense pact, the text of which is classified, including a “status of forces
agreement” (SOFA).10 Under the pact, during the years of U.S. “containment” of Iraq (1991-
2003), the UAE allowed U.S. equipment pre-positioning and U.S. warship visits at its large Jebel
Ali port, capable of handling aircraft carriers, and it permitted the upgrading of airfields in the
UAE that were used for U.S. combat support flights during Operation Enduring Freedom in
Afghanistan and Operation Iraqi Freedom (OIF).11 About 1,800 U.S. forces, mostly Air Force, are
in UAE, up from 800 before OIF; they use Al Dhafra air base (mostly KC-10 refueling) and naval
facilities at Fujairah to support U.S. operations in Iraq and Afghanistan, even though UAE
officials say that OIF benefitted Iran strategically.
The U.S.-UAE defense pact has also reportedly included U.S. training of UAE armed forces. As
another possible indication that the UAE might question official U.S. commitments to the UAE, it
confirmed on May 15, 2011 that it had retained the U.S. private firm Reflex Responses, to
provide “operational, planning, and training support,” to the UAE military. The statement
followed a New York Times report that the UAE had hired the firm, which is run by the founder
of the well-known Blackwater Worldwide security contractor, to a $529 million contract to build
a foreign mercenary battalion to help defend the UAE from internal revolt or related threats—an
account based partly on observations of foreign nationals entering the UAE to undergo training at
a UAE base.12 The State Department stated subsequently that it is investigating the reports to
9 Chase, Steven and Brent Jang. “UAE Threatens to Kick Canada Out of Covert Military Base Camp Mirage.” Toronto
Globe and Mail, October 8, 2010.
10 Some provisions are discussed in Sami Hajjar, U.S. Military Presence in the Gulf: Challenges and Prospects (U.S.
Army War College: Strategic Studies Institute), March 2002, p. 27.
11 Jaffe, Greg. “U.S. Rushes to Upgrade Base for Attack Aircraft.” Wall Street Journal, March 14, 2003.
12 http://www.nytimes.com/2011/05/15/world/middleeast/15prince.html?_r=1&partner=rss&emc=rss.
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determine whether it violates any U.S. laws controlling the export of U.S. defense technology and
expertise.
Iran
The UAE remains highly wary of Iran’s ambitions and powers, but it has sought to reach out to
Iran’s government and deny Iran any justification for aggression or adverse action against the
UAE. Commercial ties between the two are extensive and relatively free of complaints by either
side and, as discussed above, these Iran-UAE ties have caused U.S. concerns about leakage of
key dual-use technology to Iran and to U.S.-UAE measures to limit such leakage. Iranian Foreign
Minister Ali Akbar Salehi visited UAE in May 2011.
Aside from trying to limit technology leakage to Iran via UAE, the United States has enlisted the
UAE in a multilateral effort to stiffen international sanctions on Iran. In October 2009, Foreign
Minister Abdullah bin Zayid was uncharacteristically public in expressing support for “political
and diplomatic pressure on Iran to stop it from acquiring nuclear technology.” The 2010 GCC
summit, held in Abu Dhabi and concluded December 7, 2010, called for a peaceful resolution of
the Iran nuclear issue, although expressing “utmost concern” about Iran’s program. This latter
comment appears to support press reports and UAE statements in 2010 that reflect GCC backing
for more aggressive U.S. action to set back Iran’s program. The Obama Administration has
successfully encouraged the UAE and other oil exporters to offer to boost oil supplies to China to
compensate for any loss of imports from Iran that may result from China’s cooperation against
Iran.13
In early October 2010, the UAE government directed its banks to fully comply with the
restrictions on dealing with Iranian banks outlined in U.N. Security Council Resolution 1929,
adopted June 9, 2010. The move caused a 15% drop in the value of Iran’s currency, the rial. The
UAE is also a key participant in U.S. efforts to build a missile defense shield for the Gulf, in
order to deter or contain Iran, as noted below. Still, reflecting the UAE’s free and open trading
regimen, there continue to be reports that some small firms in the UAE continue to supply
gasoline to Iran even though such activity is potentially sanctionable under CISADA, referred to
earlier.
Some Iranian actions may account for the UAE’s strategic closeness to the United States and
other Western powers. UAE fears of Iran have been elevated since 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.) In October 2008, the UAE and Iran signed
an agreement to establish a joint commission to resolve the dispute; that agreement came two
months after the UAE protested Iran’s opening in August 2008 of administrative and maritime
security offices on Abu Musa. Iran has allowed Sharjah to open power and water desalination
facilities on the island. The 2010 GCC summit in Abu Dhabi, referenced above, nodded to UAE
concerns by demanding Iran return the UAE islands. The United States is concerned about Iran’s
physical control over the islands, but takes no position on the legal sovereignty of the islands.
13 Solomon, Jay. “U.S. Enlists Oil to Sway Beijing’s Stance on Tehran.” Wall Street Journal, October 20, 2009.
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The UAE, particularly Abu Dhabi, has long feared that the large Iranian-origin community in
Dubai emirate (estimated at 400,000 persons) could pose a “fifth column” threat to UAE stability.
Illustrating the UAE’s attempts to avoid antagonizing Iran, in May 2007, 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. Still, reflecting the
underlying tensions and volatility of UAE-Iran relations, the two countries issued mutual
recriminations in January 2009 over the UAE decision in late 2008 to begin fingerprinting Iranian
visitors to UAE.
Cooperation on Iraq
Aside from allowing U.S. use of UAE military facilities, the UAE has undertaken several
initiatives to support U.S. efforts to stabilize Iraq since the fall of Saddam Hussein. The UAE has
provided facilities for Germany to train Iraqi police. It pledged $215 million for Iraq
reconstruction but has provided the funds not in cash but in the form of humanitarian
contributions. Some of the funds were used to rebuild hospitals in Iraq and to provide medical
treatment to Iraqi children in the UAE. Agreeing with the U.S. view that Sunni Arab states need
to engage the Shiite-dominated government in Baghdad, in June 2008, the UAE appointed an
Ambassador to Iraq, the first Arab country to do so. The following month it wrote off $7 billion
(including interest) in Iraqi debt. Abu Dhabi Crown Prince Shaykh Mohammad bin Zayid visited
Iraq in October 2008. The UAE has tended to defer to Saudi Arabia in its efforts to encourage
inclusion of high profile Sunni Arabs in new Iraqi government being formed in late 2010.
Cooperation on Afghanistan and Pakistan
In addition to placing some of its military facilities at U.S. and allied disposal for use in
Afghanistan (and Iraq), the UAE is assisting the U.S. and international mission to stabilize
Afghanistan. Despite the small size of its military force, a 250-person contingent of UAE troops
has been serving in Afghanistan since 2004. The UAE forces, the only Arab combat forces in
Afghanistan, are operating in the restive southern part of Afghanistan, particularly Uruzgan
Province, where they appear to be welcomed by the Muslim population there.
The UAE has pledged a total of $323 million in economic aid for Afghanistan since the fall of the
Taliban. Among the projects funded with UAE aid include “Zayed University,” a college serving
over 6,000 Afghan students per year; six medical clinics; a major hospital with a capacity of
7,000 patients; the building of “Zayed City” that houses 200 Afghan families displaced by
violence; 160 drinking wells; and 38 mosques.14
In related aid for U.S. regional policy, Abu Dhabi hosted the November 2008 meeting of the
“Friends of Pakistan” donors group that is attempting to help Pakistan through its financial
difficulties. The UAE provided about $100 million to aid victims of a major earthquake in
Pakistan in October 2005. The UAE also appointed a direct counterpart to the Obama
Administration’s Special Representative for Afghanistan and Pakistan (SRAP), the position held
by Ambassador Marc Grossman as of February 2011.
14 Information provided to CRS by the UAE Embassy in Washington, D.C. December 2009.
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The United Arab Emirates (UAE): Issues for U.S. Policy
U.S. and Other Arms Sales
The UAE views arms purchases from the United States as enhancing the U.S. commitment to
UAE security. The United States views these sales as a means to enhance the U.S.-led security
architecture for the Gulf in which the Gulf partners take on increased responsibilities. In 2009, the
UAE bought about $18 billion worth of U.S. military equipment, according to June 16, 2010,
testimony by CENTCOM Commander General David Petraeus. Until 2008, the most significant
buy was the March 2000 purchase of 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), a
deal exceeding $8 billion. Congress did not try to block the aircraft sale, but some Members
questioned the AMRAAM as an introduction of the weapon into the Gulf. Among other sales with
the potential to enhance the UAE’s offensive capability, a sale of High Mobility Artillery Rocket
Systems (HIMARS) and Army Tactical Missile Systems (ATACMs), valued at about $750
million, notified on September 21, 2006.
More recent sales to UAE, some with offensive potential, have been in concert with the U.S.-led
“Gulf Security Dialogue,” intended to help the Gulf states contain Iran. The most significant is
the Terminal High Altitude Air Defense System (THAAD), the first sale ever of that sophisticated
missile defense system (notified September 9, 2008, valued at about $7 billion). The main
manufacturer, Lockheed Martin, said in June 2010 that a firm agreement might be signed in the
next few months. Among the most significant other recent sales are the advanced Patriot anti-
missile systems (PAC-3, up to $9 billion value, notified December 4, 2007) and kits for the Joint
Direct Attack Munition (JDAM) kits ($326 million value, notified January 3, 2008). Also notified
on September 9, 2008, were sales to UAE of a surface launched AMRAAM ($445 million value)
and vehicle mounted “Stinger” anti-aircraft systems ($737 million value). In conjunction with the
international defense exhibit in Abu Dhabi in March 2009, the UAE signed agreements with
Boeing Co. and Lockheed Martin Corp. to buy $3 billion worth of military transport aircraft (C-
17 and C-130, respectively). On November 4, 2010, the Defense Security Cooperation Agency
notified Congress of two potential sales: $140 million worth of ATACMs (see above) and
associated support; and a possible $5 billion worth of AH-64 Apache helicopters (30 helicopters,
remanufactured to Block III configuration).15 In 2011, a notification was made for $300 million
worth of support for UAE’s F-16 fleet and AIM-9X missiles.
The United States is in competition with France for further aircraft sales. France is hoping that, as
part of the facilities basing agreement discussed above, the UAE will buy about 60 Rafale combat
aircraft, which could be valued at about $8 billion. The UAE has already bought 380 French-
made Leclerc tanks and 60 Mirage 2000 warplanes. However, the United States is hoping to sell
the UAE additional F-16’s, according to press reports.
Other Regional Issues: Response to 2011 Unrest in the Middle East
Elsewhere in the region, the UAE leadership has sought to tamp down unrest in other GCC states,
but it has supported rebel movements in other states, such as Libya. The UAE joined other GCC
states in supporting the Al Khalifa regime in Bahrain during its confrontations with protesters
and, on March 14, it sent 500 UAE police to join a 1,000 troop Saudi force that deployed to
Bahrain to help the regime protect key locations. The UAE, Saudi Arabia, Kuwait, and Qatar, the
15 DSCA transmittal number 10-52. http://www.dsca.mil.
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The United Arab Emirates (UAE): Issues for U.S. Policy
wealthiest of the GCC states, also reportedly are discussing packages of financial help to Bahrain
and Oman, the two GCC states where substantial protests have taken place in 2011.
On Libya, the UAE has played a significant role in supporting the anti-Qadhafi opposition. It has
sent six of its U.S-made F-16s and six Mirage fighters to participate in the NATO no-fly zone
enforcement operation in Libya. On May 10, 2011, Abu Dhabi hosted a major meeting of Libyan
dissidents, including representatives of cities and towns still formally under the Qadhafi regime
control. In June 2011, in the context of its hosting a meeting of the international Libya Contact
Group, the UAE formally recognized the Benghazi-based Transitional National Council (TNC) as
the sole representative of the Libyan people and pledged financial support to the TNC.
In Yemen, the UAE has joined a high-profile GCC mediation effort intended to reach an
agreement for President Ali Abdullah Saleh to step down in favor of a political transition. That
effort has not yielded success to date, although observers say it is close to achieving its goals.
The unrest in the broader Middle East reportedly was the focus of the meeting between President
Obama and Abu Dhabi Crown Prince Mohammad bin Zayid Al Nuhayyan on April 26, 2011.
Other Regional Issues: Arab-Israeli Dispute
On most regional issues, including the Arab-Israeli dispute, the UAE does not follow U.S. policy
strictly or uncritically, but it does generally agree with most U.S. assessments of regional threats,
and it supports U.S. diplomatic efforts to resolve regional issues. On the Arab-Israeli issue, the
UAE wants to ensure that any settlement between Israel and the Palestinians is “just,” and, like
other Gulf and Arab states, it criticizes the United States as excessively supportive of Israel. UAE
leaders have indicated they intend to back the Palestinian Authority’s bid for statehood
recognition at the United Nations General Assembly in September 2011, a proposal the United
States opposes as premature and preemptive of Israeli-Palestinian negotiations. The UAE has not
advanced its own far-reaching proposals to resolve the Israeli-Palestinian dispute, as has King
Abdullah of Saudi Arabia.
The UAE’s steps to support U.S. policy on the Middle East peace process have tended to come in
concert with other Gulf states. It tends to defer to Saudi Arabia rather than try to emerge as a
major direct mediator between Palestinian factions, as have Saudi Arabia, Qatar, or Egypt. In
1994 the UAE joined with the other Gulf monarchies in ending enforcement of the Arab League’s
boycott of companies doing business with Israel and on companies that deal with companies that
do business with Israel. The UAE formally bans direct trade with Israel, although UAE
companies reportedly do business with Israeli firms and some Israeli diplomats have attended
multilateral meetings in the UAE. Unlike Qatar and Oman, the UAE did not host multilateral
Arab-Israeli working groups on regional issues when those talks took place during 1994-1998. In
2007, the UAE joined a “quartet” of Arab states (the others are Saudi Arabia, Egypt, and Jordan)
to assist U.S. diplomacy on Israeli-Palestinian issues.
The UAE publicly supports the Palestinian cause and has sometimes put its considerable financial
resources to work on behalf of the Palestinians. One major UAE action has been to fund a
housing project in Rafah, in the Gaza Strip, called “Shaykh Khalifa City.” It also has given
economic aid to Lebanon, perhaps in part to counter Iranian and Syrian influence there—an
objective that UAE shares with Saudi Arabia and the other GCC states. In December 2008 and
January 2009, the UAE government permitted street demonstrations in support of Hamas during
its war with Israel. In February 2009, the UAE denied a visa to an Israeli tennis player who was
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to participate in a Dubai tennis tournament, earning the UAE some international criticism. It also
aggressively investigated and, based on evidence developed, formally accused Israel in the killing
of Hamas leader at a Dubai hotel in January 2010.
Border Issues
The UAE cooperates with virtually all GCC-wide development and economic initiatives,
although some past border disputes and other disagreements with Saudi Arabia occasionally flare.
A 1974 “Treaty of Jeddah” with Saudi Arabia formalized Saudi access to the Persian Gulf via a
corridor running through UAE, in return for UAE gaining formal control of villages in the
Buraymi oasis area.
UAE Provision of Foreign Aid
The UAE asserts that it has provided billions of dollars in international aid through its
government and through funds controlled by royal family members and other elites. Among the
foreign aid activities reported are $100 million to aid victims of the December 2004 tsunami in
the Indian Ocean and $100 million to help victims of Hurricane Katrina in the United States.
Economic Issues
The UAE, a member of the World Trade Organization (WTO), has developed a free market
economy, widely considered weakly regulated. Partly as a result, the UAE, particularly Dubai
emirate, whose strategy was built on attracting investment to construct large numbers of opulent
and futuristic projects, built up a “bubble” in real estate prices and other assets. The UAE,
particularly Dubai, was therefore hurt significantly by the global economic downturn. At the
height of the financial crisis, there were widespread layoffs in UAE and the departure of
thousands of foreign workers, who often abandoned cars and properties that were financed,
leaving UAE banks with additional non-performing loans.16 During 2008-2009, real estate prices
fell about 40%-50% from the 2007 levels. The downturn in real estate prices also affected
regional investors, such as those in Afghanistan, who bought into high-end housing such as on the
Palm Islands. The fall in value nearly caused a collapse of a major Afghan bank, Kabul Bank, in
September 2010; the bank had made large loans to prominent Afghan power brokers and officials
to buy property there.
To address the crisis, the federal government took on some public debt and drew upon used some
of the country’s purported $700 billion “sovereign wealth fund” to inject into Dubai banks to help
them ride out the downturn. The largest such fund, called Mubadala, is owned and run by Abu
Dhabi. Among the cash injections, in late 2009, Abu Dhabi pledged about $10 billion to help
Dubai World (major real estate developer) avert outright default on about $26 billion in debt
repayment. As a result of its efforts to deal with the financial crisis, the overall public debt level
stands at over $230 billion, according to the IMF in May 2011. As of mid 2011, economic
analysts say that the UAE’s worst economic problems are behind it and its growth outlook has
16 Worth, Robert. “Laid Off Foreigners Flee as Once Booming Dubai Spirals Down.” New York Times, February 12,
2008.
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The United Arab Emirates (UAE): Issues for U.S. Policy
improved substantially to about 5%,17 a level likely sufficient for the UAE to manage its debt
obligations.
Oil and Gas Sector/Dedication to Future Clean Energy
The source of the UAE’s sovereign wealth has been oil sales. Abu Dhabi has 80% of the
federation’s proven oil reserves of about 100 billion barrels, enough for over 100 years of exports
at the current export rate of about 2.7 million barrels per day (mbd). Small amounts go to the
United States. The UAE lacks non-associated natural gas. It has entered into a deal with
neighboring gas exporter Qatar to construct pipeline that will bring Qatari gas to UAE (Dolphin
project).
Seeking to reinvest its oil wealth, Abu Dhabi has sought in recent years to outdo Dubai by
building local branches of famous U.S. and European museums. However, it has also tried to use
its oil wealth to plan for a time when the developed world is no longer reliant on oil imports. It
has funded “Masdar City”—a project, the first phase of which is to be completed in 2015, to build
a planned city which will rely only on renewable energy sources. Automobiles that run on fossil
fuels are banned from Masdar City. One feature of the city is a system of driverless taxis that use
automation to take passengers to their destinations. The civilian nuclear energy project discussed
above is also part of the effort to plan for a post-oil world economy.
U.S.-UAE Free Trade Agreement Negotiations
On November 15, 2004, the Administration notified Congress it had begun negotiating a free
trade agreement (FTA) with the UAE. Several rounds of talks were held prior to the June 2007
expiration of Administration “trade promotion authority,” but progress was been halting. The
UAE, which is considered wealthy, has received small amounts of U.S. assistance. The primary
purpose of the aid is to make the UAE eligible for advice and programming to improve its border
security and export controls, as shown below.
17 “Dubai Is Back in Business.” Middle East Economic Digest. January 14-20, 2011. Economist Intelligence Unit.
Country Report: United Arab Emirates. May 2011.
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The United Arab Emirates (UAE): Issues for U.S. Policy
Table 1. Recent U.S. Aid to UAE
FY2007 FY2008 FY2009 FY2010
(est.)
FY2011 FY2012
(req.)
NADR
(Nonproliferation,
Anti-Terrorism,
$ 1.409
Demining, and
million
$725,000
0
Related) -
Counterterrorism
Programs (ATA)
NADR-
Combating WMD
$172,000 $300,000 $200,000 $230,000 $230,000 0
International
Military Education
and Training
$10,000
$10,000
0-
(IMET)
Totals $
1.581
million
$300,000 $925,000 $240,000 $240,000 0
Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
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