Lessons from the ascent of the United Arab Emirates

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Lessons from the ascent of the United Arab Emirates

The Economist | November 23, 2023

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Over the next few weeks Dubai will be abuzz. Tens of thousands of diplomats, activists and business folk are due to fly in to join the UN’s annual climate pow-wow. The United Arab Emirates’ skill at wrangling countries and industries with vastly disparate interests, in the hope of making further progress on tackling climate change, will be on full display. But that is not the only reason to pay attention to the UAE. It also shows how to thrive in the multipolar age.

The country is home to just over 0.1% of the world’s people and produces only 0.5% of its gdp, but it contains nearly 10% of the world’s oil reserves, and this wealth helps it punch above its weight. Like many emerging countries today, it straddles political and economic divisions. It is a closed autocracy, yet one of the world’s most open economies. It is a close ally of America, but its biggest trading partner is China. Although its gdp per person exceeds that of Britain or France, it is often seen as part of the global south and is a hub for Indian and African businesses, making it the Singapore of the Middle East. And in 2020 it was one of the first Gulf countries to normalise relations with Israel.

As a consequence, the UAE is prospering even as war rages in the Middle East and superpower rivalry unravels the world. The non-oil economy is growing at nearly 6% a year, a rate that India is enjoying but that the West—and these days even China—can only dream of. Talent and wealth are flocking to the country, as Chinese traders, Indian tycoons, Russian billionaires and Western bankers alike seek stability and success. Last year it attracted more foreign investment for greenfield projects than anywhere except America, Britain and India.

Like Singapore, the UAE is a haven for its region. But whereas Singapore’s ascent coincided with a golden age of globalisation, the UAE is seizing opportunity in a time of chaos and disorder. It wants not just to thrive economically but, more dangerously, to exert its political influence abroad. Both its successes and its failures hold lessons for middling powers as they navigate a fragmenting world.

One lesson is to play to your economic strengths.  One of the consequence is access to lots of capital, computing power and data has helped artificial-intelligence researchers in Abu Dhabi train up Falcon, an open-source large language model that in some ways beats Meta’s.   Another lesson is to welcome foreign talent.  Yet some opportunities are turning out to be pitfalls.

3 key takeaways from the article

1. UAE is home to just over 0.1% of the world’s people and produces only 0.5% of its GDP, but it contains nearly 10% of the world’s oil reserves, and this wealth helps it punch above its weight.
2. Like Singapore, the UAE is a haven for its region. But whereas Singapore’s ascent coincided with a golden age of globalisation, the UAE is seizing opportunity in a time of chaos and disorder. It wants not just to thrive economically but, more dangerously, to exert its political influence abroad. 
3. Both its successes and its failures hold lessons for middling powers as they navigate a fragmenting world.  Playing to its economic strengths and welcoming the foreign talent are the two key lessons those contributed to UAE ascent.  Yet some opportunities are turning out to be pitfalls.

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Topics:  Economic Development, UAE, Politics