The UAE and Iran: A Foreign Policy for a Brighter Future

Executive Summary

Developing a policy that can offer the UAE a comprehensive guideline on managing its relationships with Iran is complex given a number of reasons. The relations between the two states have been volatile, to say the least, with both of them opening up for dialogue and collaboration only recently. This assessment focuses on explaining the scope of the problem concerning the relationship between Iran and the UAE, examining the latter’s current foreign policies, and making recommendations for future improvement.

Context/Scope of the Problem

Since attaining state independence in 1971, the United Arab Emirates (UAE) has had a predominantly contentious relationship with Iran (Hellyer, 2001). Under the Shah, the aspirations of Iran to become a regional hegemon put the UAE in an awkward position. Within such a context, soon after the British left the Persian Gulf, Tehran assertively took control over three Persian Gulf islands that were strategically located near the Strait of Hormuz, such as the Lesser Tunb, Greater Tunb, and Abu Musa. By 1979, the Islamic Revolution in Iran transformed the country into a hostile state from Abu Dhabi’s standpoint. To this date, the distrust of the UAE in the Islamic Republic remains relevant because of the latter’s volatility and unpredictability.

The UAE has been adjusting its strategic thinking based on Iran’s Shiism-related approach, size, population, as well as conduct in the Arab states. This explains why during the Iran-Iraq war, the UAE leadership supported Saddam’s war against Tehran financially. In more recent years, the large arsenal of large ballistic missiles established by the Iraqi government has worsened Abu Dhabi’s perception of the threat presented by Tehran. According to reports, between 2016 and 2020, the United Arab Emirates’ annual spending on defense amounted to the average US $26.6 each year. The fall of Saddam Hussein’s rule back in 2003 gave a push to the new landmark of financial influence in Iraq, thus subsequently increasing the UAE’s perceived vulnerability toward the alleged threat from Iran.

Policy Alternatives

At the moment, Abu Dhabi continues viewing Iran as a serious threat to safety in the region. However, the leadership of the country has been reevaluating its approach toward dealing with the Islamic Republic. The help that the UAE has been offering Iran during the COVID-19 outbreak is a sign of the willingness of the government to build diplomatic relationships regardless of what had happened in the past. In addition, it is a priority for the Emiratis to reduce their tensions with Iran as much as possible in order to keep out from a potential conflict that Iran may initiate in the Gulf region. In 2019, the UAE participated in negotiations with Iran on the importance of maritime security. The UAE delegations’ overall satisfaction that went to Iran to discuss the issue signifies that the policies that are being implemented are opening new areas of collaboration between the two countries. Even though there has been ongoing intelligence work between the two countries, the diplomatic outreach of the UAE is essential to consider within the context of Iran’s purported actions that would target the interests of the UAE and other Emirates.

It is necessary to mention that the UAE has established that a military confrontation with Iran would have devastating effects on the region, which is why the country has been working toward a policy of diplomacy. At this time, similar to other states in the region, the UAE relies on vital infrastructure such as desalination plans for improving the volatile environment in the Arabian Peninsula. However, the UAE’s engagement in diplomatic negotiations with Iran is currently limited to the balancing attempt to keep a predicable connection while also appeasing other foreign partners and allies. Within such an approach, the relationship with Saudi Arabia represents the most significant challenge. The country has been vocal about urging its neighbors and partners in the region to reduce their current levels of relations in the light of the GCC crisis, and the UAE has found it at crossroads. On the bright side, there is a possibility for the United Arab Emirates to become a diplomatic representative of both sides that can facilitate dialogue.

Policy Recommendations

The path toward renewed negotiations between global powers and Iran has not been easy considering the country’s violations of the nuclear deal of 2015, the domestic policies in the USA and Iran, as well as the objections made by the regional allies. Nevertheless, there are some opportunities for moving forward by recommending peaceful solutions that can be reached. Such solutions will address the international community’s concerns regarding the nuclear program in Iran while also strengthening the direct relationships between Iran and the UAR. As the new United States administration under President Biden is working to restarting negotiations with Iran, the strong economic ties of the UAE and the already established legacy of relations with the country could play massive roles in the outreach to Tehran (Azodi & Cafiero, 2020).

Despite the existence of regional tensions with Iran, the United Arab Emirates must maintain diplomatic representation with Iran despite the severing of the ties with the country by Saudi Arabia, Bahrain, and several others after the attack on Tehran’s Saudi Embassy in 2016. An example of a diplomatic gesture on the part of the UAE is the support of Iran during the coronavirus pandemic in 2020, which should continue further if the UAE has the resources to help. The country helped operate several medical emergency flights as a part of the UAE’s humanitarian mission under the slogan of tolerance. Therefore, there is a need to continue dialogue on establishing a hopeful and open relationship between the UAE and Iran.

Moreover, significant trade ties between the two countries represent a considerable basis for the UAE and Iran to maintain relations and improve them over time. At the time of nuclear negotiations between Iran and world powers in 2013, the UAE accounted for up to 97% of the GCC states’ exports to Iran. In 2015, the country had US $200 billion in UAE investments, while in 2017, the United Arab Emirates was the leading import partner with exports and imports between the two countries, reaching US $13 billion. Thus, the two countries should continue working on their economic collaboration because the previous cooperation has shown to be fruitful.

As Iran has been aiming to prioritize exports in the non-oil sector, its reexport capacities depend significantly on the UAE ports. For example, in 2016, the United Arab Emirates was the leading non-oil trade partner due to the economic diplomacy initiative intended to reach broader markets by using the ports to make connections between Eurasia and Iran (Keynoush, 2021). With the help of the North-South corridor, Iran is able to capture markets across the Indian ocean, and the UAE’s membership in the Indian Ocean Rim Association should be of great advantage. It could also be interesting for both countries to increase their trade investments in Africa by using the trade routes in the Indian ocean. Specifically, the ports available to Iran in the UAE offer the lowest costs for reaching international markets, which makes the country highly engaged in two-way collaboration.

It is also essential to consider the fact that Iran is not in the position to avoid severing all ties with the UAE despite often ignoring the concerns of the country over the frequent provocations. Because of this, the policy recommendation includes the need for the government to find a balance between the need to build regional security through ensuring sustainable growth in the region. Considering the fact that Tehran has shown great dedication to stable trade relationships, there is a possibility to encourage the distribution of opportunities among Iran and Gulf states. Thus, as the tensions with Iran are expected to ease under the administration of Biden, there are multiple opportunities for the global community and the UAE specifically to engage in a diplomatic dialogue. Nevertheless, the UAE remains concerned by Iran’s implacability over the debated nuclear program, which means there is no promise for a quick resolution. How the relationship will progress, to a great extent, will be inevitably influenced by the outcomes of the negotiations between the USA and Iran as well as European countries, and it is important that the UAE is active in such negotiations.

References

Azodi, S., & Cafiero, G. (2020). The United Arab Emirates’ flexible approach towards Iran. Web.

Hellyer, P. (2001). The evolution of UAE foreign policy. Web.

Keynoush, B. (2021). Diplomacy with Iran: Opportunities and risks for the UAE. Web.