The US balks at thriving UAE-Russia relations
Stasa Salacanin, The Cradle, April 21 2023 —
The leak of classified documents suggesting Emirati-Russian intel against the US has caused uncertainty about the future of US-UAE relations amid significant shifts in the geopolitics of the Persian Gulf.
The leak of highly classified Pentagon documents, including reports of the UAE’s alleged intelligence collusion with Russia against the US and UK, has captured headlines both regionally and globally.
According to the US intel reports leaked to the Associated Press, a document implicating the Russian Federal Security Service (FSB) entitled “Russia/UAE: Intelligence Relationship Deepening” states:
“FSB officials claimed UAE security service officials and Russia had agreed to work together against US and UK intelligence agencies, according to newly acquired signals intelligence.”
However, while US officials have declined to comment on the document, the Emirati government has vehemently denied any such accusation, calling it “categorically false.”
Although it is impossible to verify the authenticity of the leaked report, western officials and analysts have nonetheless been closely following increased cooperation between Abu Dhabi and Moscow, particularly since the outbreak of conflict in Ukraine.
Ties flourish between Russia and UAE
The claims are certainly credible, as close personal ties exist between the Kremlin and the Emirati ruling elite, and the two governments share similar views on several regional issues. The war in Ukraine has further boosted mutual commercial ties and cooperation between the Russia and the UAE, with non-oil trade increasing by 57 percent during the first nine months of the last year.
In early December 2022, Russia’s First Deputy Prime Minister Andrey Belousov estimated that mutual trade between Russia and the UAE will exceed $7.5 billion by the end of 2022 compared with $5.5 billion in 2021, reaching an all-time record in the history of their trade relations.
Additionally, UAE President Mohamed bin Zayed Al-Nahyan’s (MbZ) decision to support the OPEC+ move to slash oil production by two million barrels a day (bpd) in October despite pressure from the US and other countries, has been greatly praised by Kremlin.
It’s worth noting that the emirate of Dubai has witnessed an uptick in investments from affluent Russians, as real estate purchases by Russian nationals in Dubai surged by 67 percent year-on-year. Furthermore, the UAE continues to rank high on the list of preferred travel destinations for Russians, with over a million Russians having visited or relocated to the Emirates in 2022 – an impressive 60 percent increase from the previous year.
In light of the UAE having emerged as a significant destination for wealthy Russians seeking to circumvent western-imposed sanctions, Andreas Krieg, an associate professor at King’s College in London, has labeled the UAE as “the most crucial strategic partner for Russia in both the Middle East [West Asia] and Africa.”
A ‘country of focus’ for the US
This flourishing partnership between Moscow and Abu Dhabi has not gone unnoticed in the west, and there are concerns about how cozying up with Russia may affect the UAE’s relations with the west, especially in light of the recent leak of compromising Pentagon intel.
As evidence of this, US Treasury official Assistant Secretary Elizabeth Rosenberg has explicitly designated the UAE as a “country of focus,” noting Russia has been able to evade sanctions and “obtain more than $5 million in US semiconductors and other export-controlled parts, including components with battlefield uses.”
While the UAE has historically been aligned with the US, it has developed its own foreign policy in recent years, according to Dr. Giuseppe Dentice, an expert on International Relations of the Middle East from Centro Studi Internazionali Ce.S.I and a teaching assistant at the Catholic University of the Sacred Heart in Milan. As Dentine explains to The Cradle:
“The UAE has positioned itself as a free rider in the international arena, able to dialogue with the west and Russia and China. This has led the UAE to pursue its own agenda increasingly distant from the US and western interests, but in any case still extremely connected to many of Washington’s objectives in the large quadrant between the Mediterranean, Africa and Asia.”
For Joost Hiltermann, program director of the Middle East and North Africa section at the International Crisis Group think tank, Abu Dhabi is not likely to turn against the US in a major way. Despite pursuing closer ties with Beijing and Moscow, the UAE and other Persian Gulf states have emphasized that the US remains their primary external security partner.
Persian Gulf states pursue strategic balancing
In essence, “the UAE and other Gulf Arab states pursue a foreign policy of strategic balancing and hedging among both regional and global actors,” he tells The Cradle.
Yet, the UAE, along with other Persian Gulf countries, has refrained from aligning with the US in the new cold war, which has become evident in the case of US escalation over Taiwan and the war in Ukraine. In this context, the UAE does not want to miss out on the lucrative opportunity to engage with wealthy Russians, even if it means turning down the west and its preoccupation with the proxy war in Ukraine.
Dentice observes that many regional powers, especially those in the Persian Gulf have taken advantage of this new competitive environment to raise their own ambitions and develop their interests. The case of Russia and its businessmen is emblematic of this condition.
While the US does not necessarily oppose Russians visiting and residing elsewhere, Hiltermann notes that:
“They have an issue with the UAE becoming a hub for sanctions-busting and illicit economies, and they’ve had this concern for some time as US concerns relate to Russia sanctions violations and Iran and Syria sanctions violations.”
However, Hiltermann points out that the US has not always been clear on its sanctions policies and enforcement, which has confused and frustrated regional actors like the UAE. He says “Gulf Arab officials express significant dissatisfaction with US sanctions politics in the region, and often underline their lack of impact and how much they hurt local populations.”
Feeling the pressure
Additonally, Dentice emphasizes that the “UAE must be very careful to balance its own interests with the ambitions of the great powers.” Abu Dhabi should avoid any unnecessary confrontations or the risk of being labeled as a “pariah state” as this could harm its development and reputation as a commercial hub.
Irrespective of growing ties, the UAE has introduced some strict requirements for Russian businessmen and real estate investors who find it ever more difficult to purchase or rent space in Dubai. According to reports, financial and consultancy firms have are being closely observed by US financial regulators, so country business subjects have to be more cautious when dealing with Russia.
Also, despite its “free-rider” foreign policy approach, which requires a difficult balancing act, the UAE as well as other Persian Gulf states still heavily rely on US security arrangements, so many observers believe that sooner or later the UAE will have to agree on some compromise related to western sanctions issues.
Due to US pressure, the UAE has already canceled a license it had issued to Russia’s MTS Bank, and Russia’s largest bank Sberbank was also forced to close its office in Dubai.
Abu Dhabi’s diplomatic dilemma
Despite efforts by Abu Dhabi and other Persian Gulf capitals to appeal to Washington about the importance of maintaining ties with Moscow by supporting de-escalation measures between Russia and the west – such as prisoner exchanges – it is becoming increasingly challenging to maintain good relations with a Russia so profoundly vilified in western capitals.
Hiltermann doubts whether this approach will be effective in the long run. He points out that while the “US claims that it does not push Gulf Arab states to choose sides, Russia has turned into an existential issue for the US and Europe in many ways, and sooner or later western pressures on the UAE will increase.”
It is clear that the UAE’s foreign policy approach is complex and involves a delicate balancing act between its own interests and the ambitions of great powers. Withstanding its efforts to maintain good relations with both Washington and Moscow, the UAE is increasingly feeling the western pressure to untangle from Russia, especially in the form of sanctions threats.
While Abu Dhabi’s strategic partnerships with a broad range of countries have reaped economic benefits, in the foreign policy realm, the same choices have caused acute diplomatic challenges.
But the UAE cannot merely focus on the great power contests unfolding abroad. Closer to home, Abu Dhabi has had to navigate the changing dynamics in West Asia, including peace talks to end the conflict in Yemen and the game-changing, Beijing-brokered rapprochement between Iran and Saudi Arabia.
The UAE’s success and stability in its own region will ultimately hinge on its proficiency in managing these local shifts. Meanwhile, the entry of China and Russia into West Asia offers Abu Dhabi some further leverage in managing Washington’s demands. Unless and until the US decides to draw a hard red line, the Emiratis will likely play all their cards in all arenas.