In a report titled “The Hidden Rivalry of Saudi Arabia and the UAE,” Foreign Policy magazine said that there are three aspects to the hidden and intense conflict between the United Arab Emirates (UAE) and Saudi Arabia.
According to the report, Saudi Arabia and the UAE pursued normalization with the Israeli occupation similarly. However, the UAE announced its plans for normalization before Saudi Arabia did, and as a result, it has more political leverage despite Saudi Arabia’s attempts to project a religious façade among the Islamic peoples.
The report further pointed out that “the two countries united to counter Qatar’s expanding soft power in the Arab world, as exemplified by the unsuccessful blockade they imposed on it in 2017.”
And they have mutually approached Beijing and Moscow, adopting a more independent policy that diverges from their traditional alliance with the United States.
Hidden conflict aspects
According to Foreign Policy, Saudi Arabia and the UAE are waging an active geo-economic competition in multiple dimensions. First, there is a massive competition for foreign investment. The rivalry traces back to 2009, when Abu Dhabi objected to the proposed location of the headquarters for a Gulf Cooperation Council (GCC) central bank in Riyadh, which ultimately played a role in thwarting the establishment of the bank itself.
Between 2012 and 2022, the UAE’s influx of investment-to-GDP has been nearly 3.5 times greater than that of Saudi Arabia, and Dubai has become the favored location for some 70 percent of Middle Eastern headquarters of major multinational companies. Meanwhile, the surge in oil prices in 2022, thanks to the Russian invasion of Ukraine, propelled the Saudi economy to grow by 8.7 percent, the highest among G-20 countries, which has produced its own substantial influx of capital. Saudi Arabia has actively encouraged foreign companies operating in the Gulf area to relocate their headquarters to its territory, issuing warnings that companies failing to relocate their headquarters risk discontinuation of business relations with Riyadh.
Energy politics between Saudi Arabia (the world’s largest oil exporter) and the UAE (the fifth-largest) has further intensified this competition. In the summer of 2021, a clear dispute emerged between Riyadh and Abu Dhabi regarding a Saudi-led plan within OPEC+ to prolong production cuts, with the UAE rejecting the proposition.
Although an apparent resolution to this tension was quickly achieved, subsequent rumors circulated regarding Abu Dhabi’s objection to Riyadh’s dominance within OPEC+ and the potential consideration of withdrawal from OPEC.
Saudi Arabia has fallen behind in terms of politics, economy, and society due to the political folly that marked MBS’s policies. When MBS attempted to change course, he spent billions of dollars on theaters, sports, and entertainment in hopes of luring in foreign capital without first understanding the principles and history of investment.
