OPINION: United Arab Emirates – Friend or Foe?

Abu Dhabi’s indifference to the war in Ukraine is not driven by the financial windfall it reaps from Kremlin-linked fugitives flocking there en masse so much as peddling the myth of authoritarian stability

Russia’s New Backdoor

It is no secret that Russia and the UAE have been bolstering bilateral ties well before the invasion of Ukraine took place. Apart from the usual rigmarole about promoting trade, space cooperation and tourism, it is the absolutist manner in which both jurisdictions are ruled that renders them natural-born allies.

While the Emiratis still rely heavily on the United States and other Western partners as guarantors of regional peace, they share an infinitely greater ideological affinity with Moscow. It is Vladimir Putin’s strongman persona which really hits home with the tiny sheikhdom.

Gulf monarchs are notorious for running their nations like mini-fiefdoms and treating citizens as employees who stand to be disposed off on a whim. The UAE is, by no means, an exception to this phenomenon yet enjoys an especially cosy relationship with Russia relative to all the other GCC member states.

More Russian tourists and businessmen head to Dubai than anywhere else in the region whereas UAE was the first Arab nation whose passport holders were granted visa-free access to Russia back in 2019. While much of the world remains fully behind Ukraine, the Emiratis feel somewhat empowered by the extent to which a fellow dictatorship is making its presence felt on and off the battlefield.

Besides the relatability factor, Abu Dhabi’s deafening silence is partially attributable to its ongoing military campaign in Yemen alongside Saudi Arabia. It would be rich on their part to speak out against the tragic events unfolding in Ukraine while bearing responsibility for what has been described by the UN as the world’s worst humanitarian catastrophe.

The UAE is as beholden to Saudi Arabia as Belarus is to Russia, having become a quasi-protectorate of its larger neighbour. That said, the Emiratis are far more business-oriented and therefore determined to capitalise full throttle on the economic fallout between Russia and the West.

Debt-laden Dubai is at the forefront of laying out the red carpet for high-profile Russians who have either been booted out of the European Union and the United Kingdom or are no longer welcome there. The city-state has reopened its sanctions relief playbook, previously used to position itself as a conduit between Iran and third countries amid the US-led maximum pressure campaign.

As the ruling Al Maktoum family went out of their way to cushion the blow of crippling sanctions on the Islamic Republic, Abu Dhabi’s animosity towards the Ayatollahs was conducive to keeping some checks and balances in place.

When it comes to Russia, however, Dubai has the blessings of the nation’s commander-in-chief Mohamed Bin Zayed (MBZ) to go the distance in providing a sanctuary for Moscow’s rich and famous. From Chechen Tyrant Ramzan Kadyrov to former Miss Russia and 2018 FIFA World Cup ambassador Victoria Lopyreva and VKontakte founder Pavel Durov, the upper echelons of Russian society seem to invariably end up in Dubai or at least spend a considerable amount of time there.

Worse still, the de facto financial hub of the Middle East is issuing freelance work permits to social media influencers – the bulk of whom happen to be Russian socialites and fashionistas making a killing from online endorsements.

Dubai-based real estate brokerage houses and immigration agencies are in cahoots with each other, having already tailored their respective business models to target the influx of Russians snapping up properties galore and subsequently qualifying for much-vaunted UAE golden visas. Meanwhile, CIS nationals have never been more sought-after than at present in the local labour market given the unprecedented demand from private sector firms for fluent Russian speakers.

Unless Dubai is duly nipped in the bud at this embryonic stage of becoming the go-to haven for war profiteers and loyalists of the Putin regime, Western sanctions will have little to no meaningful impact on Russia.

No Friend of the West

Seeing as the war is being fought in the name of defending democracy, it is fairly apparent where the interests of a family dictatorship like the UAE would lie. Make no mistake, Abu Dhabi has a penchant for punching above its weight on the international arena despite being a mere blimp on the map whose economy is wholly expat-driven.

Sitting on the fence as millions of ordinary Ukrainians are either displaced or murdered by the aggressor is part of a wider anti-establishment stance the Emiratis are taking. The fact that diplomatic relations with the likes of Syria and Iran were recently revitalised is a clear giveaway of UAE’s tilt towards the new “axis of pariahs”.

With oil prices going through the roof, there is no real incentive for an OPEC member to alter its geopolitical leanings vis-à-vis Ukraine. Other than state coffers being replenished to the hilt, there is a lucrative logistical role in the offing for Dubai.

Credible reports have surfaced alleging that Russian fuel is being stored in the emirate of Fujairah and subsequently passed off as crude shipments originating from the UAE. Among the buyers of this re-exported oil are Asian heavyweights China and India, who are both accused of keeping Russia’s energy-reliant economy afloat.

Knowing full well that Europe is in dire need of adequate and affordable heating this winter, the Emiratis are using the strong hand they have been dealt to brazenly deviate from the Western fold.

Many young Ukrainians are sold on the craftily manicured image of Dubai as a Westernised euphoria where anyone can effortlessly make it big and live happily ever after. Only upon relocating there does it occur to them how much worse off they are, not just in real terms but also with respect to quality of life. Those with limited command of English settle for unskilled work far beneath their academic attainment and have a particularly hard time making ends meet.

Career prospects or lack thereof aside, adjusting to life in the UAE is no easy feat either. Despite enacting a series of reforms lately, the country still has a medieval, two-tier justice system inspired by Shariah law.

Public displays of affection, using profanity online or even the consumption of alcohol in non-designated areas can land civilians in prison. Moreover, women continue to live under male guardianship with no discretion over the attire they wear, their professional occupation and travel abroad. Recreation wise, this is not much on offer beyond shopping malls and public beaches.

Hailing from a country with a rich history, four seasons, an abundance of nature, organically sourced food and most importantly, freedom of expression makes it all the more difficult for newcomers from Ukraine to feel at home in a place like Dubai which is devoid of all the aforementioned idiosyncrasies.

The UAE’s values are incongruous with those of the West that Ukrainian soldiers are shedding blood, sweat and tears to uphold. Besides the media being tightly controlled and inhabitants’ every move subject to state surveillance, the country has an abysmal human rights record.  Anyone who openly voices an opinion which runs counter to governmental discourse is either handed a life sentence behind bars or forcibly disappeared – an intimidatory tactic not dissimilar to the kind used by Russian police.

It is about time Western powers saw through the façade the Emiratis tacitly endeavour to project and held them to account.

Reinstating UAE on the Financial Action Task Force (FATF) Grey List clearly has not proven far-reaching enough to bring about a change in behaviour. Private banks registered in the Dubai International Financial Centre (DIFC) and onshore alike are awash with individual as well as corporate accounts linked to Politically Exposed Persons (PEPs). Meanwhile, shell companies can be set up virtually in minutes without ever having to disclose the patron’s identity or their source of funds.

Dubai has also abandoned its signature cloak-and-dagger wheeling and dealing to let high-net-worth Russians know, in no uncertain terms, that it remains open for business.

Ukraine’s Righteous Cause

Neither the number of troops killed, nor territorial gains are a yardstick of which side emerges triumphant. Rather, it is the way of life that prevails not just in post-war Ukraine but the rest of Europe that will demonstrate who ultimately comes out on top. Although their weaponry and manpower pale in comparison to that of the Russian army, the Ukrainians know exactly what they are fighting for and thereby, have the psychological edge enabling them to hold out much longer than most observers had predicted.

That said, unsavoury actors like the UAE have prolonged the conflict by helping Russia sustain its well-oiled war machine.

A blessing in disguise that has manifested over the past seven months is the newfound respect world leaders have for Ukraine and its people. Ukrainian President Volodymyr Zelensky has done a stellar job at shoring up international support for his country while staying the course despite receiving asylum offers from partner governments.

While the 44-year-old head-of-state has used his burgeoning political clout to good effect in calling out jurisdictions that have not downgraded relations with Moscow, the UAE somehow seems to pass him by when addressing Western audiences.

It is worth recalling that shortly after the war broke out, Abu Dhabi cancelled the 30-day visa waiver for Ukrainians. Granted, this decision was overturned shortly thereafter, and stranded citizens were given temporary residence in the UAE. Nevertheless, such a gesture amounts to chicken feed when compared with the lifeline thrown to high-profile Russians whose assets in the West were at risk of imminent seizure.

Amid the commotion over instituting a visa ban for Russian tourists, the European Union ought to consider piloting similar restrictions on Emirati nationals while boycotting all sporting events and business conferences held in the UAE.

At the same time, it is equally incumbent on the United Kingdom and the United States to step up to the plate. Being the two most popular destinations for university enrolment among Emirati students as well as major arms suppliers to the Gulf, there is considerable leverage at their disposal which London and Washington have not yet exercised.

Admittedly, Abu Dhabi holds a great deal of sway given how profusely its sovereign wealth fund has invested in both countries as part of a longer-term diversification strategy away from hydrocarbons.

Nonetheless, if ever there was an opportune moment to remind the free world that morals take precedence over mercantilism, it is right here, right now. Making an example out of the UAE would not just put a spoke in the wheel of Moscow’s reckless adventurism but serve as a wake-up call to other duplicitous players such as Turkey and Serbia which still operate direct flights to Russia and welcome inbound arrivals with open arms.

Ukraine, for its part, ought to actively discourage people-to-people exchange with a country that is the complete antithesis of a liberal democracy.

While Kyiv is understandably in dire need of all the foreign capital it can muster to rebuild the country, accepting Abu Dhabi’s blood-ridden petrodollars would be a recipe for disaster that risks undoing its 21st century success story. Allowing nefarious forces to cement a foothold in the old continent could see kings and tsars making an unwanted comeback.

In essence, the Emirates have unknowingly become Putin’s hired gun to execute his yearning for the reemergence of an iron curtain. As such, it should be at the top of Europe’s agenda to form a united front in cutting the UAE back down to size.

Saahil Menon is an independent wealth advisor based in Dubai with an academic background in business, economics, and finance.

The views expressed in this article are the author’s and not necessarily those of the Kyiv Post.