Rare public disagreement between the
United Arab Emirates and Saudi Arabia over
OPEC policy points to a growing economic rivalry between
the two largest Arab economies which only looks set to intensify, several
regional analysts said.
اضافة اعلان
The UAE's opposition this weekend to a proposed eight-month
extension to output curbs, favored by Saudi Arabia, was a rare display of
defiance by Abu Dhabi, whose Crown Prince Mohammed bin Zayed al-Nahyan has been
a staunch ally of Saudi Crown Prince Mohammed bin Salman.
The disagreement led the OPEC+ talks to be called off on
Monday.
"The current OPEC standoff signals a wider push by the
UAE to assert its economic and national self-interest vis-à-vis Saudi
Arabia," said Amir Khan, senior economist at Saudi National Bank.
The alliance between the young ambitious princes had
propelled a hawkish foreign policy that saw them launch a military campaign in
Yemen, lead an Arab boycott of Qatar and combat Islamist political groups in
the Middle East and beyond.
But as Saudi Arabia tries to wean its economy off oil, it is
vying with the UAE for foreign capital and talent, although economists say it
will take time to truly challenge the region's business, trade, and tourism
hub.
"There is this creeping economic competition in the
relationship between the two biggest Arab economies and the competition is
bound to intensify," said Emirati political analyst Abdulkhaleq Abdulla.
"The UAE is speaking its mind. ... but the relationship
is strong and the leadership know how to resolve issues," he said.
The UAE foreign ministry and the Saudi government
communications office did not immediately respond to Reuters requests for
comment on their economic and political relations.
While common perceived threats from Iran and Islamist groups
in the region are likely to keep a lid on political differences, analysts say,
the two states are seen as likely to increasingly butt heads on matters of economic
sovereignty.
Riyadh has warned foreign firms they could lose out on state
contracts if they do not set up regional headquarters in the kingdom by 2024
and in another challenge to the UAE's status as the region's trade and business
hub, it this week amended rules for imports from Gulf states to exclude goods
made in free zones, a major driver of Dubai's economy.
Several diplomats in the region have said the UAE-Saudi
alliance has gone as far as it can as national economic interests take
precedence, especially in the wake of the COVID-19 pandemic.
Common concerns
The first indication of a parting of ways came in 2019 when
the UAE withdrew its military presence in Yemen, leaving Riyadh mired in a
costly war that directly threatens its security. Abu Dhabi still maintains sway
via Yemeni forces, some of whom have challenged Yemen's Saudi-backed
government.
The UAE has also dragged its feet on a deal announced by
Saudi Arabia in January to restore political ties with Qatar as Riyadh moved to
ease friction with US President Joe Biden over its human rights record and Yemen
While the UAE last year forged ties with Israel in a move
that enjoyed bipartisan support in Washington, Riyadh has by contrast made
tentative moves to improve its relationship with Turkey.
But the UAE and Saudi remain bound by concern over Iran's
expanding influence via regional proxies and security threats that pose a risk
to their economic ambitions.
The UAE started engaging with Iran in 2019 to ease tensions
after attacks on tankers in Gulf waters and on Saudi oil plants that Riyadh
blamed on Tehran, a charge it denies.
The kingdom followed suit this year, launching direct talks
with Tehran over Yemen where they are locked in a proxy conflict.
The move came
as Biden sought to revive a nuclear deal between global powers and Iran that
Riyadh opposed for not tackling Iran's missile capabilities and regional
activities.
"The potential US-Iran detente, the energy transition,
and competition in non-oil diversification makes for a particularly challenging
period of divergence this time round," Hasnain Malik, head of equity
strategy at Tellimer, said of Saudi-UAE relations.
Saudi National Bank's Khan said the UAE, which has invested
heavily to boost oil output capacity, wants to move quickly to monetize
reserves given a global push away from fossil fuels.
Saudi Arabia is in greater need of price stability to
deliver on domestic mega projects that are largely being driven by its
sovereign wealth fund.
"Now you can see head-to-head confrontation and the UAE
is punching above its weight," one foreign diplomat in Riyadh said of the
OPEC disagreement. "This is the first time the two countries exchange
public and strongly worded accusations."
While economic issues could see further public disagreement,
Riyadh and Abu Dhabi are expected to continue to deal more discreetly with
political matters to preserve an image of unity, said British academic and Gulf
expert Christopher Davidson.
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