Dubai_Skyline_mit_Burj_Khalifa_(18241030

Photo by: Tim Reckmann

Federalism in a Unitary Desert: Analyzing the Successes of Federal Political Structure in the United Arab Emirates

by Elad Raymond       
          July 8th, 2020

For much of its modern history, the Middle East has experienced widespread instability and

low-legitimacy governance. However, since its independence in 1971, the United Arab Emirates (UAE) has managed to circumvent many of the obstacles that face other regimes in the region. The Emirati federal system sets the UAE’s government apart from its neighbors and presents an interesting model for federalism in the Middle East. Yet, the UAE benefits from unique circumstances that allow its federalism to act as a stabilizing factor.

The story of the modern Middle East has been one of instability. Regimes have been frequently toppled, new conflicts and adversaries continue to emerge from the old, and large-scale humanitarian crises are ongoing. Many experts point to low-legitimacy governance across the region as a notable obstacle to stability. The authoritarian, unitary systems that characterize most Middle Eastern states present great challenges to establishing legitimacy over their mosaic-like societies. As a result, federal systems—which divide powers between distinct levels of government of equal status—have long been proposed as a potentially stabilizing alternative.

 

Since its founding in 1971, the United Arab Emirates (UAE) has been the champion of federalism in the Arab World. The UAE has experienced relative national stability compared to the rest of the region and was largely spared from the unrest of the Arab Spring. While the Emirati experience offers an interesting model for Middle Eastern federalism, the UAE benefits from unique circumstances that allow its federal system to remain functional and stable. The successes of the federal Emirati regime can be primarily attributed to its access to tremendous oil wealth, the nature of its population and population management tactics, and its integration into the international community. Other states in the region lack the confluence of factors that would allow federalism to act as a stabilizer.

 

The Emirati System

It is prudent to first understand the context and structure of the Emirati political system. The UAE is a monarchical, constitutional federation of seven distinct emirates: Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, Fujairah, and Ras al-Khaimah. The union was formed under the leadership of Sheikh Zayed bin Sultan al Nahyan of Abu Dhabi in response to the 1968 British “East of Suez” declaration. The resulting British abandonment of security commitments to what were then known as the Trucial States left the small individual emirates vulnerable to ambitious regional powers, such as Saudi Arabia and Iran. Shared security concerns and opportunities for economic cooperation made unification advantageous.

Map of the United Arab Emirates with Individual Emirates and Vicinity

Source: Onero Institute

The highest political and legislative authority in the UAE is the Federal Supreme Council, which consists of the seven absolute rulers, or sheikhs, of each emirate. It controls all federal and foreign policy, needing only a simple majority vote to pass a resolution. It also approves the national budget and high-level political appointments. The leadership exhibited at the time of independence by the two wealthiest emirates, Abu Dhabi and Dubai, is still reflected today. Their rulers are appointed as President and Prime Minister respectively, and have the power to veto resolutions. The Federal National Council is the unicameral parliament of the Emirati people. Half of the members are appointed by the rulers and half are elected, with seats being distributed under an electoral college system. It is largely advisory to the Federal Supreme Council, drafting some legislation and debating policies, such as the budget. The judiciary is independent and the legal system draws from both sharia law and other sources. The emirates are granted a great deal of autonomy. Larger emirates have their own Executive Councils and much of the country maintains forms of traditional political participation at the local level.

 

Access to Wealth and Actions with Wealth

The first pillar that stabilizes this system is the UAE’s vast energy economy and access to wealth. Despite its size, the UAE controls about 10% of known oil reserves in the world. It ranks among the top producers of crude oil, refined petroleum products, and natural gas. In 2018, petroleum accounted for nearly 40% of all Emirati exports. The magnitude of resource abundance in the UAE’s energy sector guarantees its government’s financial security. The federal government ensures this financial security by having each emirate contribute part of its revenues to the federal budget.

Top Exports and Destinations of Exports from the United Arab Emirates in 2018

Data Source: The Observatory of Economic Complexity

The financial well-being of the government is an important source of legitimacy for the regime. Ensuring that each emirate is financially prosperous secures confidence in the union among the sheikhs. Financial security builds legitimacy by reinforcing the public perception of the UAE as a wealthy country and creating a higher standard of living for Emiratis. The government is aided in both areas by its ability to easily distribute wealth to its public. It has also taken up broad initiatives to employ Emiratis in the public and private sectors. As a result, the UAE managed to limit its unemployment rate to only 2.2% in 2018, in contrast to the regional average of 10.1%.

 

The standard of living, and therefore legitimacy, is further raised by the UAE’s economic diversification efforts. Even before the 1980s oil crash, the UAE had the foresight to use its oil wealth to develop other industries, thereby reducing its sensitivity to oil prices. Dubai has developed a strong tourism industry by investing in large development projects, including the Burj Khalifa. Meanwhile, Abu Dhabi has begun to incorporate food processing and cement production. Even within the energy sector, the UAE has begun to invest in a nuclear power program with the aim of constructing four reactors by 2020. These new industries, along with more secure financial regulatory systems and free-trade policies, attract foreign direct investment to the country, further contributing to diversification. In Dubai, licensed firms pay no taxes on profits, and face no restrictions on foreign ownership or repatriation of capital. The UAE and its individual emirates are able to afford such policies because of the very oil wealth they are trying to reduce their reliance on. An Arab state without access to great wealth would struggle to maintain a stable federal structure because of its inability to keep internal and external political actors content with the power sharing status-quo, as the UAE does.

 

Population and Population Management Style

The second stabilizing factor for the UAE’s federalism is its population and population management style. The population of the UAE in 2019 was estimated at 9,771,000, 87.9% of which were immigrants. This is due to the large number of non-voting migrant laborers that come to the UAE from South Asia. Therefore, the native-born, mostly Sunni Muslim Emirati population is only slightly over one million. With such a small voting public and such limited diversity, the UAE government very closely resembles its people. The result is a shared identity between the rulers and the ruled that adds to legitimacy and stability. A growing sense of Emirati identity builds on the cooperative tendencies and relative trust between the emirates that carries on from the pre-independence Trucial States Council.

Population Breakdown of the United Arab Emirates in 2015

Data Source: The Central Intelligence Agency

The shared identity between the government and population is further aided by the representation and autonomy given to the individual emirates. While the native Emirati population is quite homogenous when it comes to religion and sect, tribal affiliation is the most salient divider. These tribes largely correspond to particular emirates. For example the Sharqiyin provide the ruling family of Fujairah, while the Al Ali control Umm al-Quwain. Therefore, sheikhs and the representatives in the Federal National Council often share a closer identity with their direct public, creating an added sense of trust. The constitutional guarantees for emirate autonomy include the ability to exercise any power not given to the Union, maintain certain legal jurisdiction, and participate in limited international diplomacy. One reason the federal system includes autonomy for the emirates is because the people’s closer ties to their local leadership keeps confidence in the status-quo. Authority can become even more localized, and become based in the strong legitimacy of kinship when a sheikh gives appointed power to community leaders. In such cases, traditional councils, or majlis, serve as platforms for political engagement, raising confidence in the system.

On top of being small, the Emirati population is non-mobilized. Most associational life, like political parties and trade unions, are banned. This is partly due to the fear of Islamism’s popular appeal and destabilizing effects. Like some other Arab monarchies, the UAE has taken a strong stance against the Muslim Brotherhood, categorizing it and its perceived allies as terror organizations. The UAE has balanced benevolent and harsh responses to popular demands related to the Arab Spring. The government responded first with some concessions; these included a significant expansion of its very limited electorate, investment in poorer emirates, and higher salaries in the public sector. However, these concessions were paired with imprisonment and revocation of citizenship for some activists, the dissolution of professional association boards, and a strengthening of regime security forces through foreign firms. The combination of benign and repressive responses to potential threats against the regime were relatively successful in neutralizing domestic unrest. 

A different state with a larger, more diverse local population would struggle to effectively apply federalism, even with considerable wealth. The tendency of security states—as most Middle East regimes are—as well as other armed players within security states to act primarily with force, would also amplify the dysfunctionality of a federal structure. The instability of Iraqi federalism, the only other Arab federal state, is a clear example.

 

An Integrated International Player

The third stabilizer of the UAE’s federal system is its integration into the international system. Since the Trucial State agreements with Britain, the emirates have relied on external security guarantors. As the United States eventually replaced Britain as the foreign protector of the Gulf, the UAE forged a strong relationship with Washington that still stands today. There are a number of factors that make the UAE an important security partner for the United States and other Western powers. The UAE has an extremely strategic location near the Strait of Hormuz, which connects Persian Gulf oil to the global market. It is located just south of Iran and shares Western concerns over Iran’s aggressive behavior. In contrast to nearby Qatar, the UAE has also shown itself to be a partner in counterterrorism. These strategic factors give foreign players an interest in helping the current federal regime maintain unchallenged power.

The energy market remains the UAE’s greatest link to the global economy. The flow of affordable oil from the Persian Gulf is a high priority in the relationship between Western countries and the UAE. However, in addition to improving the well-being of Emiratis, the UAE’s economic diversification efforts aim to strengthen its integration into the international market. As an example, the UAE tied its international security and economic diversification efforts by establishing Offsets Groups, which require foreign firms that win defense contracts to invest in local ventures. This reflects the UAE’s recognition that its security and stability is critical to its objective of achieving an open economy and attracting non-oil foreign investment. The UAE also continues to become an international hub of tourism and business. The World Bank Group ranked the UAE the 26th best country to do business in 2017. The more the UAE ties its stability to benefits for international commerce, the more the international business community will be interested in ensuring the regime’s survival in its current form.

Dubai Skyline in 2010

Photo by: Jan Michael Pfeiffer

Having built strategic and economic influence, the UAE has long been aware of its soft power potential. Soft power refers to the ability for a country to achieve preferable outcomes by creating a positive perception of itself through the appeal of culture, ideology, or institutions. The UAE has made its intentions of building up soft power quite clear. It recently established a Soft Power Council, and took up a number of future focused initiatives like Centennial Plan 2071 and Vision 2021 to make the UAE “one of the best countries in the world.” 

The government has also taken many tangible steps towards developing its soft power arsenal by embracing, whether only symbolically or actually, internationally accepted values. The UAE is a vocal supporter of intergovernmental organizations and is among the largest senders of foreign humanitarian and development aid. The UAE recently achieved gender parity in its parliament after a declaration by its current president, Khalifa bin Zayed al Nahyan. The Federal Cabinet has added ministries devoted to youth, happiness, possibilities, and artificial intelligence, among others. 

Despite receiving poor marks from human rights organizations for its treatment of activists, migrants, and other vulnerable groups, the UAE has been rather successful at creating a positive reputation for itself. The UAE has consistently been ranked the top country where young Arabs would want to live. It has partially done so by managing the added scrutiny of international attention better than its neighbors. For example, the UAE has largely avoided high profile displays of violence and repression, like the murder of Jamal Khashoggi, which hurt Saudi Arabia’s credibility and global standing. The positive perception of the UAE by foreign countries, at least relative to similar states in the region, goes a long way towards legitimizing its leadership’s control.

 

Conclusion and Prospects:

Overall, the UAE’s success as a federation has come from a combination of its fortune and instincts. The country has emerged as an anomaly of autocratic stability in the region and is an increasingly formidable player on the global stage. Thus far, the regime has taken the necessary steps to ensure its safety for the foreseeable future. Still, it is not immune to the dynamic nature of the Middle East and must continue to tread carefully if it is to maintain a functioning federal system. There is no singular formula for an effective application of federalism and there are prospects for other Arab states to modify such a system to their own national nuances. However, any such venture should consider the UAE’s path and remain conscious of underlying circumstances.

About the Author:  Elad Raymond is a third-year student in the Elliott School of International Affairs at the George Washington University majoring in International Affairs with a concentration in Conflict Resolution. He is from New York and has an interest in geography, peace studies, and the Middle East.

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