Bad relations between Saudi Arabia and the UAE due to competing development models: Another crisis in the Gulf region

Although the possibility of direct conflict between Saudi Arabia and the United Arab Emirates is low, this emerging competitive relationship is reshaping the Middle East landscape.

After 2015, both countries underwent profound internal transformations. Saudi Arabia launched its "Vision 2030," an ambitious plan aimed at reducing its economic dependence on oil, attracting foreign investment, and positioning Riyadh as a global business hub. At the same time, the UAE deepened its long-standing model as a highly interconnected trade and service hub, centered around Dubai and Abu Dhabi. Initially, these two development paths seemed complementary. However, by 2020, conflicts between the two visions began to emerge. Both countries sought to monopolize regional headquarters of multinational corporations, become major hubs for global air traffic, and serve as logistics corridors connecting Europe, Asia, and Africa. Although both still rely on oil to some extent, they are seeking to diversify their energy sectors. As both countries strive to build globally competitive economies, their developmental trajectories shifted from convergence to structural competition. The economic sphere has become the main battlefield of competition.

The most notable point of economic conflict erupted during 2021-22, when Saudi Arabia announced that government contracts would be awarded only to foreign companies that relocated their regional headquarters within Saudi Arabia. This was widely interpreted as a direct challenge to Dubai, which had long been the undisputed regional center for multinational companies in the Middle East. The UAE generally viewed this policy as weakening its competitive advantage in the financial, logistics, and business services sectors. Saudi Arabia explicitly stated its intention to surpass the UAE and become the central financial hub in the Gulf region.

Additionally, Saudi Arabia established Riyadh Air and invested billions of dollars to expand its airports, with the clear aim of competing with Emirates Airlines, Etihad Airways, and Dubai Air. Saudi Arabia's goal is clearly to turn Riyadh and Jeddah into aviation super-hubs connecting Asia, Europe, and Africa—roles previously played by Dubai. Similarly, new large-scale tourism projects—NEOM, The Line, Red Sea Project, and Oula Development—show that Saudi Arabia is striving to position itself as a global tourist destination, directly challenging the UAE's dominance in the tourism sector, especially in high-end tourism.

Despite the escalating tensions and increasingly fierce economic and political competition, neither country seems willing to push bilateral relations to the brink of collapse, due to economic interdependence and shared security concerns. The latter includes combating Islamic movements, particularly the Muslim Brotherhood, which poses a significant challenge to the legitimacy of both regimes. Furthermore, given that both countries are monarchies, they are committed to maintaining the stability of authoritarian regimes. Both rely on U.S. security guarantees, a strategic glue that prevents open rifts between Saudi Arabia and the UAE.

Moreover, unlike the Saudi-Iran relationship, there is no ideological polarization factor in the competitive relationship between Saudi Arabia and the UAE. The conflict of interests between the two countries is based on material factors, making the competition more manageable. Nevertheless, the risk of a crisis, especially in the context of the Yemeni civil war, cannot be ignored. Once a crisis erupts, it will further exacerbate the already complex and turbulent situation in the Gulf region and throughout the Middle East.

Source: The National Interest

Author: Muhammad Ayyub

Time: Washington Time February 14

Original: toutiao.com/article/1857382249040900/

Statement: This article represents the views of the author alone.