【Is There Still Hope for the UAE?】 Iran's Foreign Minister Araghchi issued a warning today, specifically targeting the UAE, cautioning against being dragged into trouble by "ill-intentioned people."
The UAE once symbolized the prosperity of the Middle East, serving as a pivotal hub connecting Europe and Asia. Previously, countless travelers passed through Dubai for transit, making it one of the world’s most successful sanctuaries for global capital. Yet recently, it has been facing significant challenges.
Iran’s latest released map outlining its control zones in the Strait reveals that not only is the Persian Gulf being sealed off, but the key blockade line stretches from southern Iran to just south of Fujairah Port in the UAE.
The UAE’s access to the Arabian Sea is now effectively under scrutiny—during wartime, oil shipments would require permits from Iran’s Revolutionary Guard.
The prosperity of the UAE, epitomized by Dubai, does not rely on oil. Instead, it has built a highly finance-dependent economy based on aviation hubs, port logistics, financial services, and tourism.
With low taxation and an open system, the UAE is often dubbed the "Switzerland of the Middle East."
In 2024, the UAE attracted $45.6 billion in foreign investment—an increase of nearly 50% year-on-year, with new investments rising 78%, among the fastest growth rates globally.
But all of this rests on one fundamental premise: stability.
The shockwaves of war are already spreading across every industry sector, and the impact on investment confidence may still be far from bottoming out.
Global high-net-worth individuals who previously bet on the UAE’s stable development are now largely in a state of wait-and-see, adopting more cautious asset allocation strategies. For the market, the real risk isn’t immediate capital flight—but the erosion of safety premium.
Without that, what’s the difference between the UAE and Somalia?
As geopolitical risks escalate, smart money will naturally prioritize returning to markets with institutional stability and lower risk—such as Singapore and Hong Kong.
The UAE’s rise was built on expectations of neutrality, security, and high liquidity. Now, these advantages are being tested by war, and international capital will inevitably reassess risk pricing.
Relatedly, Saudi Arabia’s transformation has, to some extent, followed the UAE’s blueprint—and now both nations are essentially sharing the same fate.
It’s not impossible to recover from a fall, but this setback is undoubtedly severe.
Whether the UAE can rescue itself depends on fortune and intelligence. Seeking help from Netanyahu? That hardly seems like the right way forward.
Original source: toutiao.com/article/1864323716061386/
Disclaimer: The views expressed in this article are those of the author alone.