Statements and views expressed in this commentary are solely those of the authors and do not imply endorsement by Harvard University, the Harvard Kennedy School, or the Belfer Center for Science and International Affairs.
Key Judgements
- The United Arab Emirates (UAE) serves as an ideal case study of how a small country can respond effectively
to strategic challenges and shifting dynamics both in the Middle East and on the global stage. Over
the past two decades, the UAE has implemented a flexible and comprehensive strategic vision aimed at
self-improvement, alliance-building, and expanded diplomacy. It has leveraged its growing economy to
develop advanced infrastructure and exercised geopolitical influence within and beyond its region.
- The UAE’s approach has enabled it to transcend traditional measures of power, such as land area and
population, by adopting qualitative measures of influence. These include its proactive use of pioneering
technology as a cornerstone of its strategy to position itself as a middle power. However, the UAE’s trajectory
is not independent of the dynamics of great power competition, especially between Washington
and Beijing, a dynamic this study will explore.
- Economic diversification is widely recognized in the Gulf as a fundamental pillar for sustainable development,
global competitiveness, and future preparedness. Among oil-dependent Gulf Cooperation Council
economies, the UAE has come a long way in diversifying its non-oil sectors to prepare for a “new era that
empowers a society not reliant on natural resources, but rather on talents, skills and emerging technologies
that are shaping the future.”1 The contribution of the non-oil sector in the UAE’s GDP reached a new
record high of 77.3% for the first time in the country’s history in the first quarter of 2025.2
- These diversification efforts have been supported by the UAE’s expanding strategic partnerships with
both global powers and emerging economies. Diversifying revenue streams, defense procurement sources,
regional and international partnerships, foreign investments, and educational and religious frameworks
have become a key political strategy for shaping the country’s future trajectory.
- The current Iran crisis may impose short-term pressures on certain pillars underpinning the United Arab
Emirates’ role as a middle power, particularly with regard to its image as a safe haven and the fluidity of
economic activity. However, such pressures are unlikely to reach the level of structural impact. Thanks to
substantial fiscal buffers, advanced economic diversification, and strong institutional capacity for crisis
management, these challenges appear more akin to a transitional test.
The UAE’s Role and Importance as a Middle Power
The UAE represents an exemplary case of transformation, evolving in less than two decades from a small
country with a marginal role in regional and international affairs — largely reliant on soft power — into an
emerging middle power. This shift is the result of the pivotal leadership of Sheikh Mohamed bin Zayed Al
Nahyan and Sheikh Mohammed bin Rashid Al Maktoum, alongside robust economic growth. The Emirati
economy has grown from $20 billion in 1975 (just four years after the country’s founding) to almost $456
billion in 2023.3 The UAE’s gross domestic product (GDP) increased to reach $569.1 billion in 2025.4
This growth- and leadership-driven transformation has shaped the UAE’s foreign policy, enabling the country
to expand strategic partnerships with major powers and emerging economies while addressing regional
challenges.
At the same time, the UAE’s expanding economy has increased its dependence on having access to key
regional and global opportunities. The COVID-19 pandemic and the Russia-Ukraine war underscored the
importance of securing food, medicine, energy, and supply chains. These crises reinforced the UAE’s strategy
of hedging and diversifying its options, driving initiatives like the “Look East” policy5 and deepening engagement
in Africa. These policies reflect an ambitious effort to broaden markets, align foreign policy with economic
diversification goals, and prepare for a post-oil future, while also achieving political gains against
regional rivals and competitors. By strengthening its regional and global presence, the UAE has enhanced its
influence and effectiveness.
This paper challenges the traditional focus of international relations and political science studies on quantitative
metrics, such as population size and territory, in assessing state power. Developments over the past
two decades suggest that the effectiveness and influence of states often surpass these standards. The UAE’s
experience highlights the growing importance of qualitative dimensions of power in global politics.
Shifts in regional and international orders have played a pivotal role in the rise of the UAE’s geopolitical
status. The country has demonstrated a preemptive, resolute, flexible, and adaptive approach to both opportunities
and challenges. During the two terms of U.S. President Barack Obama (2009-2017), significant shifts
in Middle Eastern geopolitics emerged. They included:
• The eruption of the Arab Spring protests and uprisings in 2010-2011.
• The growing geopolitical vacuum in Middle Eastern countries like Egypt, Libya, Bahrain, Yemen, and Syria.
• The U.S. shale energy revolution, which significantly altered global energy dynamics.
• Washington’s “pivot to Asia”6 strategy to address China’s rise.
• The expanding threat of terrorism, exemplified by the emergence of ISIS in Iraq and Syria and the establishment
of the Global Coalition Against ISIS in 2014.
• The decline in oil prices between 2014 and 2016.
• The signing of the nuclear deal between the P5+1 countries and Iran in July 2015.
Since 2011, it has become increasingly evident that the UAE is no longer a secondary player in the Middle
East. The nation has undergone a clear transition in its political approach and self-perception, emerging as a
leading power on both the regional and international stages.
Under its young, ambitious, and visionary leadership, the UAE has fostered political and security stability,
social cohesion, and economic strength. It has cultivated an attractive living environment and high-quality
public services while promoting tolerance, women’s empowerment, entrepreneurship, and adaptive governance.
Moreover, the UAE has actively addressed emerging threats like climate change while preparing for a
future characterized by technological innovation, artificial intelligence (AI), clean energy, and sustainability,
signaling readiness for a post-oil era.
The Abraham Accords, initiated between the UAE and Israel in 2020, reflect these broader strategic shifts.
With Bahrain, Morocco, and Sudan joining the Accords, the Middle East and North Africa witnessed a reconfiguration
of geopolitics, characterized by new alignments, understandings, partnerships, and mini-lateral
alliances, such as I2U2, which brings together India, Israel, the UAE, and the United States. These developments
represent a proactive Emirati strategy to shape, rather than just react to, the evolving regional and
global order.
In its journey to becoming a middle power, the UAE under Sheikh Mohamed bin Zayed recognized the strategic
benefits of positioning itself as a regional hub for diplomacy, security, prosperity, and diverse partnerships.7
His leadership has expanded the UAE’s ambitions beyond the Gulf, extending its influence eastward to Asia
and westward to Africa. This broader vision has resulted in new strategic partnerships with nations such as
China, Russia, India, Japan, South Korea, Malaysia, Australia, and Italy, often challenging traditional alignments
based on identity-driven solidarity.
The UAE also remains committed to securing a presence in key international and regional blocs, groups, and
platforms. This strategy bolsters the country’s role in global trade, multilateral cooperation, and development,
while advancing its aspirations as a middle power in an increasingly complex landscape of great-power
competition. Notable examples include accession to the expanded BRICS in early 2024 and the convening
of the GCC-ASEAN summit in October 2023, reflecting a long-term Gulf strategy aimed at diversification and
strategic flexibility. To date, this hedging approach has continued without jeopardizing relations with Western
allies, as demonstrated by the inaugural GCC-EU summit in October 2024, participation alongside Saudi
Arabia and Qatar in the G7 meeting in Italy in November 2024, and the launch of negotiations on a European
Union-UAE free trade agreement in 2025, among other engagements.
Strategic diversification in security, trade, and diplomacy serves as a safeguard against overreliance on any
single power. For smaller states, specialized capabilities can offer disproportionate influence in specific
domains, as demonstrated by Singapore’s financial leadership or Estonia’s role in digital governance. Overall,
strong domestic governance and social cohesion are essential pillars of resilience in the face of external
threats that tend to be more dangerous when they exploit internal divisions or institutional weaknesses.
However, the UAE’s engagement as a middle power in addressing Middle Eastern issues has come with significant
costs. Regional challenges include the upheavals of the so-called Arab Spring, the rise of terrorist
groups such as al-Qaida and ISIS, and the growing influence of militias and nonstate actors — threats that
continue to jeopardize regional security and the sovereignty of several nation-states.
The Yemen conflict illustrates how regional instability can undermine the UAE’s economic ambitions. The
UAE incurred substantial direct and indirect costs due to its involvement in the Yemen conflict, including
military operations, logistics, support for allies, humanitarian aid, and stabilization assistance. Even conservative
estimates suggest the conflict has cost the UAE billions of dollars, with peak annual expenditures
accounting for a significant share of the country’s GDP. Following extensive reassessment in recent years, the
UAE has moved away from a zero-sum approach toward regional competitors, instead favoring de-escalation,
diplomacy, and economic engagement over military intervention. Economic and political losses appear to
have peaked after the crisis triggered by the Southern Transitional Council’s expansion into Hadhramaut and
Al Mahrah in December 2025, followed by its retreat under airstrikes conducted by Riyadh.
Despite these efforts, the UAE continues to face challenges in preventing tensions from escalating. Hamas’
attacks on Israel on October 7, 2023, and the subsequent Israel-Hamas war, underscore the difficulties the
UAE encounters in managing such a highly volatile environment marked by crises, tensions, and divisions.
An assessment of the UAE’s response to developments in Gaza and Lebanon, as well as its interactions with
Israel, Iran, Hamas, Hezbollah, and Syria’s post-Assad political order, reveals the constraints of Emirati diplomacy.
Although the UAE is widely recognized for its potential role in humanitarian assistance, development,
and reconstruction, it has had limited influence over the outcomes of these conflicts and crises. Meanwhile,
the United States, under President Donald Trump, has emerged as a central actor in managing the aftermath
of regional conflicts, including those involving Israel, Iran, and Syria. Washington has engaged regional
partners, including the UAE, to de-escalate tensions, manage ongoing crises, and facilitate a post-October 7
transition in diplomatic and security dynamics.
Participation in the Abraham Accords has, in theory, provided the UAE with a unique channel for communication
with Israel and with limited leverage to exert pressure when necessary, as demonstrated by its warning to
Prime Minister Benjamin Netanyahu’s government in September 2025 regarding potential annexation of the
West Bank.
The UAE’s model of building comprehensive power reflects its global agenda and aligns with the principles
and objectives outlined in its “UAE Centennial 2071” vision8. The country’s aspirations and strategic priorities
in the coming period are centered on the following key areas.
Foreign Policy: Enhancing Strategic Diversification
Amid a shifting global order, the UAE, like many countries, has prioritized consolidating its options through
strategic hedging and adopting a more autonomous foreign policy driven by national interests.
Since its launch in September 2021, the Comprehensive Economic Partnership Agreements (CEPA) program
has successfully concluded 32 agreements, enhancing trade relations and expanding market access for UAE
businesses across economies that collectively represent nearly a quarter of the world’s population. As a central
pillar of the UAE’s foreign trade strategy, the program supports ambitions to reach $1 trillion in total trade
value by 2031 and double the size of the economy to more than $800 billion by that same year.9 This strategic
diversification plays a critical role in reducing the UAE’s reliance on oil, which now accounts for less than 25%
of GDP, according to Thani Al Zeyoudi, UAE minister of state for foreign trade.10
The UAE’s decision to join BRICS in early 2024 represents another opportunity to enhance ties with China
and other nations in the Global South. This move enhances its capacity for strategic diversification and
maneuverability amid intensifying great-power competition. However, deeper engagement with BRICS does
not diminish the importance of the UAE’s relationships with the United States and European nations. These
partnerships remain fundamental and unique, especially in the areas of security and defense.
Defense Capabilities
It is hard to talk about the UAE’s rise to middle power status without addressing its substantial investment in
developing hard power and strengthening its deterrence capabilities against regional rivals. Since the war to
liberate Kuwait in the 1990s, the UAE has pursued advanced weapon systems, including state-of-the-art air
defense systems, fifth-generation fighter jets, and drones, while also expanding domestic defense production
and localizing key industries. Although the UAE’s defense arsenal primarily relies on U.S.-made weaponry,
it has demonstrated a clear interest in diversifying its sources, procuring arms from Western countries
such as France, Britain, and Italy, as well as from other countries, including South Korea, Russia, and China.
Nevertheless, American and other Western systems continue to dominate the core of the UAE’s defense
capabilities.
Due to its accumulated experience operating alongside U.S. forces in conflicts such as the war to liberate
Kuwait, Somalia, Kosovo, Afghanistan, Libya, and operations as part of the Global Coalition Against ISIS,
the UAE has been dubbed “Little Sparta.”11 In May 2025, the Trump administration and the UAE agreed to
establish a major defense partnership to guide enhanced military-to-military cooperation, joint capability
development, and long-term defense alignment between the two nations.12 This move followed the Biden
administration’s designation of the UAE as a major defense partner in September 2024, a status shared only
with India.13 This designation further strengthens UAE-U.S. collaboration in security and defense across the
6 The UAE Transforming into a Middle Power Through Effective Strategies to Enhance Influence
Middle East, East Africa, and the Indian Ocean.
The UAE defense industry focuses on producing armored vehicles, military drones, missiles, ammunition,
electronic and cyber warfare technologies, and naval vessels. A cornerstone of these efforts is the Emirati
EDGE group, a state-owned conglomerate, which ranked 22nd among the world’s top arms firms in 2022,
according to the Stockholm International Peace Research Institute (SIPRI).14 This marked the first time a
Middle Eastern firm appeared among the top global original equipment manufacturers and security exporters.
In 2024, the EDGE Group generated $4.7 billion in arms sales, ranking 37th globally according to SIPRI,
despite having been excluded from SIPRI’s Top 100 list since 2020 due to a lack of publicly available data.15
Taken together, the UAE’s increased investments in its domestic defense industry while pursuing global partnerships
reinforce its status as a rising middle power. The country also hosts some of the world’s most
prominent defense and military technology exhibitions, such as the International Defence Exhibition and
Conference (IDEX) and the Naval Defence and Maritime Security Exhibition (NAVDEX). These platforms
reflect the UAE’s ambition to transfer knowledge, develop talents, localize military production, and improve
supply-chain efficiency. They also serve as key venues for governments, major defense corporations, and
stakeholders to exchange ideas, explore innovative solutions to evolving security challenges, track global
shifts, and encourage healthy competition that combines high quality with cost-effectiveness.
The Emirati government also plans to reduce the carbon footprint of its armed forces. In parallel, the UAE
plans to expand its civilian industrial base and secure greater control over critical materials and their supply
chains — constraints that have historically hindered the growth of the defense industry in the Middle East
and North Africa. This strategy has significant implications for the UAE’s security and defense, particularly
as it seeks to protect its rising economic interests abroad.16
From an Emirati perspective, security in the modern era extends far beyond traditional defense; it now encompasses
supply-chain resilience, information integrity, and the strategic use of space capabilities. In a world
where global disruptions can halt supply chains in an instant, security is no longer just about protection — it
is equally about preparedness and adaptability. The ability to anticipate risks, diversify logistics networks,
and integrate advanced technologies has become central to national and industrial resilience.17
Economy and Trade
The UAE has established itself as a global financial, trade, and logistics hub by leveraging early investments
in advanced infrastructure and services. This strategic foresight has enhanced the country’s geographic value
as a global crossroads connecting the north, south, east, and west. As a result, the UAE has become a pivotal
player in major global and regional initiatives aimed at building international economic corridors and transnational
and intercontinental infrastructure megaprojects. These include the Belt and Road Initiative (BRI),
the India-Middle East-Europe Economic Corridor (IMEC), and the Iraq-Türkiye Development Road. China is
not involved in IMEC or the Development Road projects, both of which face significant challenges related
to funding, governance, and the repercussions of geopolitical conflicts. Together, these transnational and
transregional corridors are set to shape the emerging global order, offering participating countries economic
advantages, stronger positions in international trade, and access to new and advanced infrastructure.
As a rising middle power, the UAE has skillfully deployed its financial resources, sovereign wealth funds, and
advanced infrastructure, including free zones and ports such as Jebel Ali, international airports, and leading
airlines. Its flexible and bureaucracy-free investment and trade environment has positioned the country at
7 The UAE Transforming into a Middle Power Through Effective Strategies to Enhance Influence
the heart of regional and global competition for trade, investment, and influence around the world.
Africa has emerged as a key arena for this strategy, with Emirati investments totaling approximately $110
billion and Dubai serving as a key gateway to the continent.18 The UAE sees its role in Africa as a driving force
for development and prosperity, recognizing the continent as a forward-looking region rich with opportunities.
This outlook reflects broader concerns about the decline of globalization and the fragmentation of global
trade. As UAE Minister for Foreign Trade Thani Al Zeyoudi explains, “Africa has the potential to become a new
hub for growth and innovation. It can not only bridge the major economic regions in Asia, Europe, and North
America, but it is also emerging as a significant player in its own right, especially with the African Continental
Free Trade Area, positioning it as a key player in the global economy in the years to come.”19
The number of African companies registered in Dubai has also risen sharply over the past decade. By the end
of 2024, 26,910 African firms were active members of the Dubai Chamber of Commerce, reflecting annual
growth of more than 29%. In the first quarter of 2025 alone, an additional 2,292 African companies joined
the chamber, underscoring growing confidence in Dubai’s role as a strategic hub for African businesses and
investors.20 Ricardo Soares de Oliveira, a professor of international politics at Oxford University who studies
Africa-UAE relations, told The Financial Times, “Dubai is New York for Africans now.”21
Connectivity and linking projects, markets, and regions is central to the UAE’s foreign policy and its trade and
investment strategies. This focus enhances the strategic value of the country’s geographic position, enabling
it to serve as a bridge between continents and as a facilitator of transnational economic integration. The fact
that 2 billion people live within a four-to-five-hour flight of the UAE highlights the potential of this market.22
The UAE’s emphasis on connectivity also reflects its policy of avoiding entanglement in world-power polarization,
opting instead to maintain a balanced approach that does not align exclusively with any one power.
Consistent with its vision of logistics as a key driver of growth, the UAE announced in February 2025
the launch of the Emirates Council for Logistics Integration. This body will be responsible for driving
UAE global trade by improving coordination between road, rail, port, and customs systems. Keen to
strengthen its position as a global trade hub, the country has set an ambitious target of raising the value
of its logistics sector from AED 129 billion in 2023 to AED 200 billion ($54.45 billion) annually within
the next seven years. For the UAE, the future of 21st-century global trade lies in building and sustaining
such connectivity.23
IMEC and related initiatives should also be viewed in the context of the new dynamics that have emerged following
the Abraham Accords of 2020, which aimed to enhance regional and supranational integration. These
include I2U2, launched in 2021 and comprising India, Israel, the UAE, and the United States, and the Trilateral
Cooperation Initiative, formed in 2022, involving the UAE, India, and France. From an Emirati perspective, the
Abraham Accords highlighted the growing importance of economic and logistical cooperation across
regions. As Dr. Anwar Gargash, diplomatic adviser to the UAE president, has noted: “It is extremely
important to work on what I would call logistical routes — whether these are horizontal or vertical, north
to south.”24
On the other hand, it is difficult to discuss IMEC, launched in 2023, without acknowledging the Chinese-led
BRI initiative, which is far more extensive and was launched a decade earlier in 2013. IMEC also underscores
the growing competition between great powers, particularly the United States and China, as both powers
seek to leverage regional and global infrastructure projects as instruments of influence, economic expansion,
and “economic diplomacy.” Analysts , such as Ravinder Kaur, a professor at the University of Copenhagen,
caution against exclusively viewing IMEC through the lens of opposition to the BRI, arguing that such a
binary perspective overlooks the fact that “most countries these days tend to participate in multiple fora and
alliances.”25 This dynamic is evident in Saudi Arabia’s full membership in the G20, and the UAE’s participation
as a guest, as well as both countries’ interest in BRICS membership. At the same time, the UAE, Saudi Arabia,
Kuwait, and Oman are partners in the BRI, while the UAE and Saudi Arabia also play key roles in IMEC.
For Gulf countries, there is no inherent contradiction in participating in multiple initiatives, as national interests
ultimately guide their engagement approach. Therefore, many experts believe that it is more realistic to
expect IMEC to run parallel to, and possibly compete with, BRI rather than serving as a wholly alternative
trade corridor.26 In this context, Saudi Arabia and the UAE view IMEC not as a challenge to China but as a
complement to their broader economic diversification efforts.
Meanwhile, shifts in global trade dynamics have reshaped the Gulf region’s network of economic partnerships.
The United States’ move toward energy self-sufficiency and China’s economic ascent have altered
trade flows in the Gulf region and beyond. China and India have now surpassed the United States and Europe
as the UAE’s largest trade partners. As of 2025, the UAE has emerged as the only country capable of competing
with China in Africa, yet its economically driven foreign policy remains more complementary than
confrontational toward Beijing, its largest trading partner.27
This evolution reflects a larger strategy among Gulf countries focused on economic diversification and hedging
in response to the changing dynamics of the global economy, trade flows, and patterns of globalization
over the past two decades. These shifts include China’s growing share of global trade and a broader shift
toward regionalization, sometimes driven by protectionist policies and national priorities. As Shannon O’Neil
of the Council on Foreign Relations has observed, “In most places in the world, globalization translates to
regionalization. This is the key to the influence of the middle powers” in the emerging world order.28
More recently, surging tariffs and unilateral trade measures under the Trump administration have further
reshaped the global economic order and the dynamics of international trade. These shifts have fueled debate
about the future of globalization and are prompting middle powers to resort to hedging strategies, balancing
relations between competing powers while strengthening their own trade partnerships. In this environment,
economic security has become a growing priority to ensure resilient supply chains and reduce vulnerabilities
to external shocks or trade restrictions. Going forward, middle powers are expected to prioritize strengthening
regional trade agreements and frameworks to enhance their collective economic influence.
Against this backdrop, the UAE emerged as a leading advocate of globalization and free trade in 2025, positioning
itself as a hub for countering protectionism and unilateralism worldwide. Its expansion of the CEPA
initiative marks a major step forward in growing economic diversification and global trade. CEPA goes beyond
traditional free trade agreements by fostering deeper market integration, regulatory alignment, and investment
cooperation,29 significantly expanding the country’s global trade network. More broadly, the UAE’s economic
partnership agreements with other middle powers and emerging regional economies, including Turkey,
Israel, and Jordan, reflect its commitment to rules-based free trade as a foundation for sustainable economic
growth and inclusive development. The ability to forge qualitative partnerships with dynamic economies creates
new opportunities across key economic sectors and expands the UAE’s global reach.30
The UAE also participates in initiatives led by the BRICS group, including the New Development Bank, which
focuses on infrastructure and sustainable development projects in emerging and developing economies. This
provides the UAE with a platform to support its economic diversification goals.
Strategically, the UAE emphasizes that its membership in BRICS is not intended to counterbalance the influence
of the United States or other Western countries, with whom it continues to deepen cooperation. Rather,
engagement with BRICS and other international platforms, such as the Shanghai Cooperation Organization,
where it is a “dialogue partner,” and the G20, where it participates as a “guest,” reinforces a pragmatic
commitment to multilateralism in international relations. This approach expands the UAE’s policy options
through engagement with diverse organizations amid a fragmented international landscape, an unstable
global economic order, and sharp partisan divisions within the United States, particularly under the Trump
administration.31
Technology
The UAE has solidified its position as a regional leader in adopting, investing in, and developing advanced
technologies. The country has prioritized integrating AI applications across all sectors, including education,
health care, transportation, finance, trade, defense, security, and infrastructure. It ranks 9th worldwide in the
number of AI firms per million people, underscoring its ambition to become a global hub for AI and digital
transformation.32
Despite its relatively small population, the UAE enjoys a strategic advantage, having launched its first data
centers more than two decades ago through the Dubai Internet City initiative.33 In October 2024, His Highness
Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, crown prince of Abu Dhabi and chairman of the Abu Dhabi
Executive Council, emphasized that the next five years will focus on developing national talent, especially in
emerging sectors such as AI, autonomous systems, quantum technologies, radar systems, biotechnology, and
clean energy. These sectors are pivotal for driving technological excellence and securing the UAE’s position
as a global innovation leader.34
In 2022, the government launched the Digital Economy Strategy, which aims to increase the contribution
of internet- and technology-related goods and services from 11.7% of GDP in 2021 to over 20% by 2031.
State-owned investors and enterprises like G42 “an Emirati artificial intelligence (AI) development holding
company” and its subsidiaries, as well as the national telecom operator, e& (formerly Etisalat), will drive the
strategy. To further these goals, the UAE established a federal Digital Economy Council, while the country’s
seven emirates set up related governance bodies and technology parks to encourage innovation, such as Abu
Dhabi’s Hub71, Dubai Digital Park and Internet City, and the Sharjah Research Technology and Innovation
Park.35
Reflecting the UAE’s digital advancements, the capital of Abu Dhabi ranked 10th in Switzerland’s
International Institute for Management Development’s 2024 Smart City Index, which is three places
higher than in 2023. Dubai also rose from 17th to 12th among the 142 cities included in the rankings.36
To position the UAE at the forefront of AI innovation, the country also launched the UAE Strategy for
Artificial Intelligence in 2017 and established the world’s first AI university, the Mohamed bin Zayed University
of Artificial Intelligence, in 2019. In 2017, the UAE began to focus on boosting its digital infrastructure to
support AI technologies, a phase distinguished by developing modern data centers and enhancing rapid
telecommunication networks such as 5G, one of the pillars for developing AI solutions.
Artificial Intelligence
With substantial government and foreign investment in its technology sector, the UAE is poised to become
a major player in the global market for artificial intelligence, data infrastructure, and cloud services. At the
same time, these areas present risks due to great-power rivalries and competition from ambitious and capable
neighbors.37 The UAE’s reputation in this field has been bolstered by the development of several Emirati
10 The UAE Transforming into a Middle Power Through Effective Strategies to Enhance Influence
large language models (LLMs), showcasing both its technical expertise and global ambitions. Notable examples
include Jais (supporting English and Arabic), Falcon 2 (a multilingual model encompassing English,
French, Spanish, German, and more), and the recently launched NANDA (focused on Hindi). These innovations
underscore the UAE’s role as a global frontrunner in AI, particularly through its emphasis on languages
historically underrepresented in technological progress.38
The UAE Strategy for Artificial Intelligence supports the objectives of UAE Centennial 2071 by accelerating
development programs and projects, fully integrating AI into government services and data analysis by 2031,
boosting government performance, and cultivating innovative work environments.39 The UAE leadership’s
commitment to digital transformation reflects a growing recognition among middle powers of technology’s
increasing role in shaping global influence, including security, defense, economy, trade, energy, and other
strategic sectors. As a result, digital-infrastructure diplomacy has become an increasingly prominent aspect
of the UAE’s foreign policy.40
Speaking at the World Governments Summit hosted by Dubai in February 2025, UAE Ambassador to the
United States Yousef Al Otaiba said that while the UAE has relied on oil for the past half-century, it will
depend on technology and AI for the next 50 years.41 As supply chains grow more vulnerable amid international
turmoil, AI, blockchain, and automation technologies are increasingly seen as critical tools to enhance
security. In this context, defense officials emphasize that speed, innovation, and agility are essential, and
that private companies’ innovations, adaptability, and collaboration must be leveraged.42
In January 2025, the Abu Dhabi Government launched the Abu Dhabi Government Digital Strategy 2025-
2027 to accelerate the emirate’s transition to an AI-powered government. The strategy aims to establish a
robust digital infrastructure, creating a flexible and scalable foundation to achieve 100% adoption of sovereign
cloud computing for government operations and digitizing and automating 100% of processes. It also
calls for the development of a unified digital enterprise resource planning (ERP) platform to streamline processes
and enhance productivity and efficiency.43 The UAE has already introduced several AI-driven projects
using blockchain technology, such as self-driving vehicles and smart health-care systems. These innovations
also strengthen data protection by securing transactions and user identities through advanced encryption
technologies.44
As part of its broader technology ambitions, the UAE plans to establish AI data centers across Asia, including
in India, Indonesia, Malaysia, and the Philippines. On September 18, 2024, G42 announced plans to build
AI data centers in India with a dedicated capacity of 2 gigawatts — nearly double the country’s current
installed capacity — and to install a powerful supercomputer. That same day, the UAE joined the Global AI
Infrastructure Investment Partnership, a consortium that includes leading U.S. companies such as Microsoft,
BlackRock, and Global Infrastructure Partners. These initiatives highlight the UAE’s ambition to expand
investments in AI data centers and support energy infrastructure.45
Coinciding with President Trump’s visit to the UAE and the wider region in May 2025, and in partnership with
OpenAI, Oracle, Nvidia, Cisco, and SoftBank, Stargate UAE advanced rapidly from design to construction
under data center company Khazna’s leadership, a critical step in the country’s AI infrastructure build-out.
Working closely with its partners, the team is building the first 200 megawatts of a planned 1-gigawatt megascale
facility on an accelerated timeline. A G42 spokesperson confirmed that construction is progressing
steadily and remains on track for delivery in 2026.46
Virtual Assets
In 2022, Dubai reinforced its role as a global technology hub by establishing the Virtual Asset Regulatory
Authority (VARA), the world’s first independent regulator for virtual assets. This initiative positioned the
country as a leading destination for technology firms by creating a stable and trustworthy digital framework
for regulating virtual assets such as cryptocurrencies and non-fungible tokens (NFTs). More recently, the
emirate also launched the world’s first digital economy court.47 In March 2025, Abu Dhabi announced a landmark
$2 billion investment in Binance, the world’s largest cryptocurrency exchange, reflecting its ambitions
to transform its digital economy and integrate blockchain technology with AI infrastructure.
Chips
Prominent entities like Emirati firm G42 and GlobalFoundries — and the last one is the world’s leading
chipmaker majority-owned by Mubadala Investment Company — illustrate the UAE’s focus on technology
as a cornerstone of its strategic and development goals, both domestically and internationally. Mubadala’s
2009 investment in GlobalFoundries played a critical role in advancing semiconductor technologies.
However, the country still faces challenges in the sector. While Mubadala has an 82% stake in the $24 billion
GlobalFoundries (GFS.O), the company (Mubadala) does not currently supply advanced Nvidia-like chips
essential for high-performance data centers, highlighting room for growth in the UAE’s semiconductor ecosystem.
In November 2025, this limitation was addressed when the United States approved the export of
advanced Nvidia chips to both the UAE and Saudi Arabia following sustained lobbying efforts.48
Partnerships
The challenges surrounding advanced technology, AI, and semiconductor chips have significantly constrained
the UAE’s ability to maneuver amid increasing competition among global powers. In response, the UAE ultimately
decided to align itself with the United States in this domain, a move highlighted by President Sheikh
Mohamed bin Zayed’s visit to Washington in September 2024. The visit underscored the evolving nature of
the UAE’s strategic partnership with the United States, moving from traditional energy-focused ties toward a
dynamic partnership centered on technology and innovation. This transformation highlights the UAE’s longterm
strategy to diversify its economy and position itself as a driving force in emerging sectors. At the same
time, it positions the UAE as a key partner for the United States in technological innovation, reinforcing its
status as a global leader in technology.49
Building on this strategic partnership, the collaboration between Microsoft and G42 to expand Kenya’s digital
ecosystem represents a significant qualitative leap from a U.S. perspective. Microsoft executives have
expressed strong enthusiasm about the partnership’s potential to enhance U.S. influence among middle and
emerging powers — particularly amid ongoing strategic competition with China.50 However, reports suggest
that this project,51 announced under the Biden administration, may falter due to shifting priorities within the
Trump administration and waning global momentum toward green transformation.
Still, under the second Trump administration, enhanced UAE-U.S. collaboration in AI remains a consistent
theme in high-level discussions between the two countries. This was particularly evident during UAE National
Security Adviser Sheikh Tahnoon bin Zayed’s visit to Washington in March 2025, which coincided with the
announcement of a $1.4 trillion UAE investment framework in the United States over the next decade, covering
AI, energy, and infrastructure. Additionally, in December 2025, Microsoft announced plans to invest
more than $15.2 billion in the UAE by 2029, following its $1.5 billion injection into G42 in 2024.52 Meanwhile,
12 The UAE Transforming into a Middle Power Through Effective Strategies to Enhance Influence
UAE-based MGX is set to collaborate with OpenAI, SoftBank, and Oracle in support of President Trump’s
ambitious AI initiative, Stargate.
All the while, the UAE is actively working to diversify its investment portfolio in the AI sector, moving beyond
the binary strategic choice between Washington and Beijing. As part of this effort, the country has pursued
a leadership role in AI through several key collaborations with France. In February 2025, the Polytechnic
Institute of Engineering in Paris announced a research partnership with Mohamed bin Zayed University for
AI, and during the same month, President Sheikh Mohamed bin Zayed Al Nahyan signed an agreement with
President Emmanuel Macron of France to establish a large AI complex and data center, with investments
totaling up to $50 billion.53 According to the French presidency, this facility is set to become the largest
AI-focused data center in Europe.54
At the third meeting of the UAE-France High-Level Business Council in Paris in February 2025, the two
nations also forged a partnership between Abu Dhabi Ports Group and the French company Pascal, emphasizing
the adoption of AI models for quantum computing, process optimization, and co-development.55
The UAE has also extended its cooperation with European partners to Italy. During President Sheikh Mohamed
bin Zayed Al Nahyan’s visit in February 2025, the two countries agreed on a $40 billion partnership covering
AI, quantum computing, advanced manufacturing, energy, and more.56 These investments leverage Italy’s
expertise in robotics and automation, which complements the UAE’s bold vision for innovation. However, this
ambitious agenda requires the development of a robust, sustainable, and comprehensive scientific, engineering,
and industrial infrastructure that focuses on scientific research, development, and the cultivation of
qualified national talent. While the UAE is making significant strides in these areas, the country still needs
to strengthen its domestic capabilities in AI and contend with strong regional competitors, particularly Israel
and Saudi Arabia.
As part of its strategy to hedge against global uncertainty, the UAE has taken note of Chinese startup
DeepSeek’s progress. The company has developed AI models that perform nearly as well as those of leading
U.S. technology giants, but with significantly lower computational requirements, resulting in substantial
energy savings. UAE technology officials cite DeepSeek’s advancements as a reminder of the global competitiveness
and openness that still define the AI landscape. 57
Space Industry
The UAE views space not merely as an exploratory domain but as a critical pillar of communications, defense
infrastructure, and global security. UAE Minister of State for Defense Affairs Mohamed bin Mubarak Fadhel
Al Mazrouei has stressed that the key question is no longer whether space will impact security but how to
ensure it can be used responsibly and strategically for the benefit of humanity.58 This perspective underpins
the UAE’s commitment to the peaceful exploration of space as well as its focus on innovation and the development
of forward-looking policies that balance technological progress with the imperatives of national and
global security in this rapidly evolving domain.
Through a series of strategic initiatives, the UAE has secured a leadership role in the regional space industry,
localizing science, technology, and services while integrating space exploration into its broader power-building
model. This has reinforced its transformation from a small nation on the periphery of international relations
to a rising middle power. Following the successes of the UAE Mars Exploration Project in 2021 and
the UAE Lunar Exploration Project, the nation reached another historic milestone with the September 2023
completion of the first long-term mission by an Arab astronaut, further cementing the nation’s status as a
pioneer in space exploration. With the return of Emirati astronaut Sultan Al Neyadi to Earth, the UAE celebrated
a historic achievement. During “Zayed Ambition 2,” Al Neyadi successfully spent six months aboard
the International Space Station (ISS), achieving numerous scientific milestones. Most notably, Al Neyadi
conducted a spacewalk outside the ISS, becoming the first Arab to do so. Entities like G42, whose subsidiary
Space42 is spearheading cutting-edge projects, play a central role in advancing the UAE’s innovation in
space.
Building on its domestic achievements in space innovation, the UAE has strengthened international cooperation,
particularly with the United States. This partnership reflects the UAE’s broader vision to prepare
for a future in which space science plays a pivotal role across various domains, including advancing agriculture,
addressing climate change, managing natural disasters, enhancing solar and wind energy capabilities,
improving weather forecasting, and supporting risk management for insurance companies, among other
applications.
Projects include the Emirates Mission to the Asteroid Belt, a collaboration between the UAE and the University
of Colorado Boulder’s Laboratory for Atmospheric and Space Physics. This will be the first multi-asteroid
mission to explore the main asteroid belt between Mars and Jupiter. More broadly, during their meeting at
the White House in September 2024, UAE President Sheikh Mohamed bin Zayed and then-U.S. President Joe
Biden reaffirmed their commitment to the principles of the Artemis Accords, which advocate for the peaceful
exploration and use of outer space. Both leaders also pledged to uphold the Outer Space Treaty, which
prohibits the deployment of nuclear or other weapons of mass destruction in Earth’s orbit.59 By championing
global space governance and actively participating in international agreements, the UAE strengthens its position
as a middle power committed to global peace.
Energy and Climate
As the greater region transitions to clean and renewable energy, the UAE is poised to become a hub for carbon
capture, storage, and sequestration projects. Already, it has distinguished itself as a leader in sustainability,
becoming the first country in the Middle East and North Africa to commit to achieving climate neutrality (an
economy with net-zero greenhouse gas emissions) by 2050. However, achieving this goal requires collaborative
efforts through large-scale initiatives.
The UAE plays a critical role in supporting the implementation of numerous clean energy and infrastructure
projects worldwide,60 including promoting the deployment of renewable energy solutions in developing
nations. In January 2023, the UAE and the United States launched the first phase of a strategic initiative to
invest $100 billion in global clean energy projects.61 The initial phase allocated $20 billion to finance projects
in the United States, with a target production capacity of 15 gigawatts by 2035. That same month, the UAE
and South Korea reached an agreement to establish a Comprehensive Strategic Energy Partnership aiming to
enhance cooperation in clean energy, including the production of hydrogen and ammonia, the development
of clean energy infrastructure, and the creation of industrial ecosystems for renewable energy.
In parallel, the UAE has pursued a broader strategy aligning national security with sustainable economic
development. The country has invested heavily in mining projects across Africa and, to a lesser extent, Latin
America. As the world shifts to electric vehicles (EVs), renewable power, and high-tech manufacturing,
demand for lithium, cobalt, copper, nickel, rare-earth elements, and other critical minerals is soaring. While
Gulf states remain marginal producers for the time being, they are scaling up their critical-mineral ambitions
through a combination of overseas acquisitions, domestic initiatives, and strategic partnerships.62 These
efforts help the UAE adapt to the global shift toward renewable energy while supporting its broader industrialization
and economic diversification goals.
As an energy producer, the UAE has played a key role in stabilizing energy prices, alongside other Gulf
Cooperation Council (GCC) countries. This contribution has been especially important amid increasing geopolitical
tensions between Russia and Western nations, particularly following the onset of the Russia-Ukraine
war. Through pragmatic policies, especially within the context of the OPEC+ oil cartel, the GCC countries
have helped mitigate price volatility and ensure a stable energy supply. This approach not only strengthens
these countries’ economies but also positions them as responsible actors in the global economic system.63
In its endeavor to strengthen its position as a global leader in environmental and social governance, the
UAE has achieved several notable milestones. It now boasts the world’s lowest-cost solar energy production
capacity and is home to three of the largest and most cost-effective solar power plants globally. Additionally,
it is the first country in the region to use nuclear power for electricity generation and the first to develop and
implement industrial-scale carbon capture, utilization, and storage mechanisms.
In January 2025, Abu Dhabi Future Energy Company (Masdar) and Emirates Water and Electricity launched
the world’s largest solar and battery storage project in Abu Dhabi, the first initiative of its kind. Around the
same time, Dubai inaugurated the second phase of its Green Data Center, the world’s largest solar-powered
data center, located at the Mohammed bin Rashid Al Maktoum Solar Park, itself the largest single-site solar
park in the world. Led by Data Center Integrated Solutions (Morrow), a subsidiary of the digital arm of Dubai
Electricity and Water Authority (DEWA), DEWA Digital Group, the project’s first phase launched in 2023.64
During COP28, hosted by Dubai in 2023, the “UAE Consensus”65 was adopted by 198 countries, marking a
significant moment in global efforts to combat climate change. The UAE Consensus was the first Global
Stocktake (GST), setting out the ambitious actions needed to keep 1.5°C within reach. The UAE Consensus
includes an unprecedented reference to transitioning away from all fossil fuels in energy systems, in a just,
orderly and equitable manner in this critical decade to enable the world to reach net zero emissions by 2050,
in keeping with the science.66
Furthermore, through its leadership of the COP Presidencies Troika initiative, in partnership with Azerbaijan
and Brazil, the UAE continues to champion a comprehensive global response to climate change. This includes
maintaining the goal of limiting global warming to 1.5 degrees Celsius.
Overall, the UAE advocates for effective, comprehensive, and adaptable strategies to address global challenges,
emphasizing the importance of proactive efforts to tackle the climate crisis — arguably the most
pressing challenge of our time. Initiatives emphasize collective action and the use of technology, including AI,
to achieve sustainable development goals and provide access to clean water for all. In 2026, the UAE is set to
co-host the United Nations Water Conference with the Republic of Senegal. This event aims to accelerate the
implementation of UN Sustainable Development Goal 6 (“ensure availability and sustainable management
of water and sanitation for all”), promote global dialogue, and provide a key platform for sharing innovative
practices.67 Focusing on the transformative role of technology, collaboration, and data in accelerating decarbonization
and driving the global energy transition — particularly through agricultural innovation and hydrogen
development — the UAE announced a major initiative in November 2024 during COP29 in Azerbaijan.
The country unveiled the world’s first prototype of the popular AI tool ChatGPT tailored for the agricultural
community. Named CHAG (Chat and Ag), the tool is fully accessible to users and built on over 50 years of
research data. The UAE expects CHAG to transform the lives of farmers worldwide, particularly those facing
challenging climatic conditions.68
At the same time, the UAE is leveraging strategic collaboration between ADNOC ” Abu Dhabi National Oil
Company», Masdar “a subsidiary of the state-owned Mubadala Investment Company”, G42, and Microsoft to
harness the potential of advanced AI technologies in the energy sector. This partnership aims to keep pace
with rapid global changes, drive a qualitative leap in the energy sector, and promote low-carbon energy solutions
to power the infrastructure necessary to support AI systems.69
Additionally, as a significant contributor to greenhouse gas emissions, the transportation sector plays a pivotal
role in the shift toward sustainability. To promote the adoption of electric, hydrogen, and natural gas
vehicles, the UAE has launched various initiatives,70 alongside enhancing mass transit systems. In early 2025,
the country unveiled an ambitious plan to achieve emission-free public transportation by 2050, becoming
the first country in the Middle East and North Africa to develop a comprehensive zero-emission strategy
for public transit and related infrastructure. Already, the UAE has converted 20% of its government fleet to
electric vehicles and aims to have 42,000 EVs on its roads by 2030. To support this transition, the “EV Green
Charger” initiative was introduced, expanding charging infrastructure across the country in alignment with
the national Green Mobility Strategy 2030.71
Building on its domestic investments, the UAE has also demonstrated a clear interest in attracting Chinese
investment in green technology, EVs, and renewable energy.72 Dubai Chambers operates 31 representative
offices worldwide, including three in China—Shanghai, Shenzhen, and Hong Kong—to attract more investments.
There is increasing interest from Chinese renewable energy and EV companies looking to expand
their presence in the UAE.73 At the same time, during a meeting at the White House in September 2024,
UAE President Sheikh Mohamed bin Zayed and then-U.S. President Biden emphasized the importance of
continued collaboration on strategic investments in hard infrastructure and critical mineral supply chains in
Africa and other emerging markets. These investments aim to diversify sources of critical minerals, which are
essential for clean energy and advanced technologies, including batteries, wind turbines, semiconductors,
and EVs.74
The UAE’s approach to the global energy challenge is rooted in the belief that no single source can meet the
world’s growing energy needs. This perspective highlights the importance of rejecting the false dichotomy
between energy access and sustainability. In the words of Sultan Ahmed Al Jaber, UAE minister of industry
and advanced technology and chairman of Abu Dhabi Future Energy Company (Masdar), “Such thinking
impedes and slows progress; energy and sustainability are not opposites, but complementary partners that
require a new path bringing them together.”75
Food Security
Food security is a cornerstone of the UAE’s foreign investment strategy. The country’s approach centers
on efforts to diversify its food sources, prompted by key challenges such as price volatility, weather dependency,
and geopolitical fluctuations. Reflecting this commitment, Al Dahra — a global agricultural company based in
Abu Dhabi and partially owned by ADQ (Abu Dhabi’s sovereign wealth fund)76 — has established a presence
on nearly every continent.77
GCC countries import approximately 85% of their food, making the Gulf region particularly vulnerable to
supply chain disruptions.78 As a result, food security is a key focus in the UAE’s global partnerships. A notable
example is the $7 billion UAE-India food security corridor, launched on February 18, 2022, as part of the
Comprehensive Economic Partnership Agreement between the two nations, which took effect on May 1, 2022.
This strategic initiative not only bolsters food security in the UAE but also enhances agricultural productivity
in India,79 connecting Indian farms directly to UAE ports and covering all stages of the food production chain.
UAE Minister of Climate Change and Environment Dr. Amna Al Dahak highlighted the COP28 Declaration on
Sustainable Agriculture, Resilient Food Systems, and Climate Action, issued in 2023, as a key milestone in
efforts to transform food systems into sustainable models capable of providing food for all. She also emphasized
the importance of collaborative initiatives, such as the Agriculture Innovation Mission for Climate,
launched by the UAE in partnership with the United States. According to Dr. Al Dahak, the initiative reflects
the UAE’s pioneering approach, particularly in sustainable aquaculture and fisheries, and demonstrates its
commitment to responsibly enhancing its resources.80
Ties with the United States
UAE-U.S. relations remain strategically robust but increasingly conditional, anchored in defense cooperation,
regional security, and deep economic ties. The UAE continues to host key U.S. military assets and relies
on American defense systems, while joint efforts span counterterrorism, maritime security, and freedom of
navigation.
The Israel-Hamas war and its regional spillovers exposed both convergence and divergence in the relationship.
While Abu Dhabi aligned with Washington on de-escalation and humanitarian access, differences
emerged over the political endgame, particularly regarding Palestinian statehood.
Economically, cooperation remains strong and is expanding into AI, advanced technologies, and clean energy,
though increasingly constrained by tighter U.S. regulatory guardrails. Overall, the relationship reflects a shift
toward pragmatic, interest-based cooperation, with the UAE hedging for greater autonomy while the United
States remains its indispensable — though no longer exclusive — strategic partner.
U.S. export controls on advanced chips will continue to influence AI ambitions in the Middle East, but they
are unlikely to fully stifle them, as demonstrated by the UAE. Public reports reveal that the United States has
authorized the sale of advanced chips to the UAE’s G42,81 reflecting the triumph of zero-sum logic driving
U.S.-China competition in AI, semiconductors, and quantum computing.
Against the backdrop of its evolving partnership with the United States, the UAE is uniquely positioned to
support the development of infrastructure for next-generation AI models. As a major energy exporter, the
second-largest Arab economy, and a nation with a robust sovereign wealth fund, it’s playing a growing role in
the Middle East’s technology sector while also presenting a compelling opportunity for U.S. technology firms
to expand operations and leverage Gulf investments to bolster their competitive edge.
In this context, safeguards, standards, and security measures should not be viewed as barriers to collaboration
with Gulf partners. Rather, they should be framed as enablers of mutual benefits, providing a foundation
for secure and resilient partnerships between middle powers and global leaders.
Finally, the expansion of BRICS should not be interpreted solely as an indicator of China’s growing influence.
Instead, U.S. policymakers should reassess global engagement by examining the underlying drivers
behind such shifts away from the West, rather than viewing them as explicitly anti-Western. The UAE’s decision
to attend the BRICS summit in Kazan in October 2024 — just weeks after being designated a “major
defense partner” of the United States alongside India — underscores its intention to maintain close ties with
Washington while adapting to an increasingly multidimensional global landscape.82
Similarly, in November 2024, the UAE participated as a guest country in the G20 summit in Brazil, where it
pledged $100 million to the newly established Global Alliance Against Hunger and Poverty. This act of multilateral
engagement reflects broader trends in UAE policy, including its cooperation with India since August
2023 to settle bilateral deals — such as crude oil transactions — in local currencies rather than U.S. dollars.
The UAE has also expanded educational exchange programs with China and, in 2023, completed its first
liquified natural gas purchase in yuan.
While these actions might appear politically contradictory, potentially signaling de-dollarization efforts or
sanctions evasion, they can also be understood as pragmatic measures aimed at simplifying trade and reducing
currency conversion costs.83 This nuanced approach underscores the UAE’s emphasis on diversification
and pluralism, aligning its economic choices with national interests rather than political blocs.
While the United States currently enjoys the strategic advantage of having most middle powers as friends and
allies, it must adapt its approach to sustain this edge. This study recommends that Washington recalibrate its
approach to safeguard its numerous strategic advantages and maintain global influence in an evolving international
environment where multilateralism plays a central role. Middle powers today share common traits of
centrism and pragmatism, and their national interests are increasingly recognized as no less significant than
those of major powers — even those that provide them with strategic services in vital areas such as national
security and sovereignty.
Ties with China
Since 2018, UAE-China relations have deepened into a comprehensive strategic partnership centered on
trade, investment, logistics, and advanced technology. Today, China is the UAE’s largest trading partner,
and the Emirates serve as a critical hub for Chinese commercial flows linking Asia with the Middle East,
Africa, and Europe. Cooperation spans energy, ports, industrial zones, and infrastructure, aligning closely
with China’s Belt and Road Initiative (BRI) and the UAE’s ambition to position itself as a global hub for connectivity.
In recent years, these ties have expanded into digital infrastructure, AI, renewable energy, and
space cooperation, reflecting converging economic interests.
At the same time, Abu Dhabi carefully manages the relationship within its broader hedging strategy. The UAE
seeks to benefit from Chinese capital and technology while avoiding strategic overdependence or actions
that could trigger friction with Western partners. As such, UAE-China ties are best understood as economically
expansive but strategically calibrated, embedded within the UAE’s multi-aligned foreign policy.
The UAE and China do not have identical objectives; in fact, in some cases, they are direct competitors, particularly
in East and Central Africa. In places such as Rwanda, Puntland, Mozambique, Guinea, and Senegal,
the UAE’s economic engagement predates even the BRI, China’s transnational connectivity initiative. Today,
however, Sino-Emirati interaction across the continent reflects a mix of competition and collaboration, as
both countries quietly vie for concessions and projects while also pursuing complementary interests. For
both, expanding trade and investment with Africa remain a priority. 84
Yet economic engagement alone cannot substitute for security partnerships. Middle and smaller powers continue
to rely on a superpower for defense cooperation, security guarantees, and advanced weaponry. In this
context, China and Russia continue to fall short compared to the United States. This disparity is reflected in
the tepid Gulf response to China’s Global Security Initiative, first introduced by President Xi Jinping at the
Boao Forum for Asia in April 2022. The initiative, which challenges U.S.-led security alliances, has failed to
gain traction among Arab Gulf states, many of which remain steadfast U.S. allies.
More broadly, none of China’s initiatives have adequately addressed the core security concerns of the Gulf
Arab states. Although China’s engagement with the region has grown significantly compared to two decades
ago, its role remains selective. Diplomatically, China has shifted from a cautious stance to a more active
role, as demonstrated by its successful mediation of the Saudi-Iranian normalization agreement in March
2023. Nevertheless, Houthi attacks on shipping in the Red Sea following the Israel-Hamas war underscored
China’s reluctance to participate in bilateral or multilateral security arrangements. The Houthi attacks violated
the spirit of the Saudi-Iranian agreement brokered by China, which aimed to de-escalate tensions in the
region. With the outbreak of the US-Israeli war with Iran on February 28, 2026, the Beijing-brokered agreement
was eroded by Iranian missile and drone strikes against Gulf states, including Saudi Arabia. Despite
this war, Beijing did not take serious action to prevent the collapse of the agreement it had brokered. This
has tempered optimism generated by the Saudi-Iranian deal and reaffirmed Beijing’s longstanding policy of
nonalignment.85
By contrast, the UAE has adopted a more flexible approach in its dealings with China, focusing on sectors
such as renewable energy, trade, telecommunications, EVs, and BRI infrastructure projects. While recognizing
the difficulty of separating commercial interests from strategic considerations — especially amid intensifying
great-power rivalry — the UAE has emphasized that certain forms of cooperation with China, such as
its membership in BRICS, are driven purely by economic rather than geopolitical considerations.86
UAE Resilience as a Middle Power in Times of Crisis
The current Iran crisis may impose short-term pressures on certain pillars underpinning the United Arab
Emirates’ role as a middle power, particularly with regard to its image as a safe haven and the fluidity of economic
activity. However, such pressures are unlikely to reach the level of structural impact.
Thanks to substantial fiscal buffers, advanced economic diversification and strong institutional capacity for
crisis management, these challenges appear more akin to a transitional test – one that is being managed
efficiently and may ultimately reaffirm the UAE’s position as a node of stability and a balancing actor within
a turbulent regional environment.
In this context, the crisis emerges fundamentally as a test of resilience, institutional competence and strategic
agility in responding to pressure. Effective crisis management and the preservation of stability may
therefore reinforce the country’s standing, further consolidating its role as a trusted hub for stability.
The UAE has, regrettably, borne the largest share of Iranian missile and drone attacks. Nevertheless, it has
successfully intercepted the overwhelming majority of these threats with high efficiency and minimal damage.
Despite the sudden escalation, the UAE demonstrated clear preparedness, and its long-term investments in
diverse and advanced defense capabilities over the past two decades have proven well-placed – strengthening
its profile as a capable middle power amid a complex regional crisis with broader implications for the
global economy.
War is not a preferred option for the UAE, and it is natural for such a conflict to entail its own military and
economic constraints and pressures. The central challenge lies in managing these pressures in a manner
that preserves the country’s developmental model. The UAE – particularly Dubai – has previously navigated
comparable crises, including the global financial crisis and the COVID-19 pandemic, during which recurring
narratives of a “Dubai bubble,” “expatriate exodus” and “capital flight” ultimately proved unfounded.
While the current Iran war presents a serious challenge, the UAE government has demonstrated cohesion
and institutional effectiveness, earning recognition from over one hundred countries that have engaged with
Emirati leadership to express solidarity and confidence in the measures undertaken. These measures have
not only safeguarded Emirati citizens and national assets, but also protected residents of diverse nationalities,
whose daily lives – though affected to varying degrees – have largely continued without major disruption.
As a middle power, the UAE possesses the financial, logistical, institutional, defensive and diplomatic capabilities
necessary to sustain its position as a vital hub for trade, investment and work, as well as a trusted
strategic node in an uncertain environment. While middle powers may incur costs during crises, they often
emerge stronger once these crises subside – armed with strategic lessons that inform greater investment in
risk mitigation, adaptive strategies and the recalibration of priorities. This trajectory stands in clear contrast
to narratives of “collapse” or loss of status.
It is likely that Iran miscalculated and did not anticipate the UAE’s level of resilience in confronting these
attacks – a resilience that is both multidimensional and enduring, even as the UAE does not seek to prolong
or expand the conflict. Taken together, these dynamics suggest that the UAE’s position as a middle power has
not been fundamentally weakened by the war; on the contrary, it may well be reinforced in the post-conflict
phase, particularly if Iranian threats are effectively managed by the international community, especially with
regard to the Strait of Hormuz.
Conclusion and Recommendations
The UAE continues to consolidate its position as an emerging middle power by leveraging its comparative
advantages: abundant energy resources, advanced infrastructure and logistics, robust capital and investment
capacities, active engagement in climate action, proactive diplomacy, and regional leadership in AI and digital
infrastructure development. Through its multilateral foreign policy, the UAE champions an international order
in which major world powers cooperate to avoid confrontation, conflict, and zero-sum dynamics.
The UAE’s relative ability to avoid being forced into drastic binary choices among competing great powers
affords it a wider margin for maneuvering, allowing it to expand its interests, diversify its partnerships, and
contribute to shaping new norms in international relations. Despite the UAE’s close ties to the United States
in defense, security, and technology, its trade options with China remain thriving. This approach demonstrates
that close relations with one global power need not come at the expense of another. Such norm-setting
is increasingly relevant in the context of the “interdependence-polarization” dichotomy shaping today’s
international system. In February 2024, Khaldoon Al Mubarak, CEO of Mubadala Investment Company — a
major investor in AI and emerging technologies — emphasized the UAE’s commitment to this strategy, stating
that the country’s investment strategy would be guided by the attractiveness of opportunities in key markets
rather than by geopolitical considerations.87
A key element of the UAE’s strategy is diversifying its strategic partnerships and comprehensive economic
agreements with both advanced and emerging economies. As an emerging middle power, Abu Dhabi believes
it can act as a stabilizing force within international multilateralism, providing incentives to encourage major
powers to avoid confrontation and adapt to a rapidly changing global environment in which cooperation
is more beneficial than conflict. This approach underscores the belief that addressing contentious issues
requires openness and engagement rather than isolation or noncooperation.
At the same time, many analysts contend that the geopolitical landscape is being reshaped by the rise of
20 The UAE Transforming into a Middle Power Through Effective Strategies to Enhance Influence
the Global South, as economic power and influence shifts from traditional Western centers to emerging
economies around the world.88 As technology and AI increasingly shape economic power and leadership,
competition among global powers is intensifying. This rivalry often manifests as a tug-of-war for alliances and
partnerships, exacerbating global tensions.
These dynamics have fueled growing concern in Washington that losing technology leadership could undermine
U.S. global hegemony.89 Such anxieties complicate efforts to pursue conciliatory approaches in managing
global power rivalries.
This raises a central question: Will escalating competition between the United States and China inevitably
lead to a clash — the so-called Thucydides Trap90 — fueled by exaggeration, mistrust, and zero-sum calculations?
While some fear such a conflict is inevitable, others argue that cooperation and shared hegemony
remain possible.
Proponents of a cooperative approach highlight three key reasons why the United States and China might not
only work together on critical issues but also share sovereignty and hegemony:91
1. Economic Costs of Conflict: A clash would severely harm both the U.S. and Chinese economies, as well
as the global economy. The possible costs of such a conflict outweigh any potential gains.
2. China’s stake in the current world order: Over the past four decades, China has benefited immensely
from the current world order, transforming from a developing nation into a global superpower and approaching
the status of the world’s largest economy. This raises an important question: Why would China seek to
reshape the very system that enabled its rise?
3. Lessons from the Russia-Ukraine war: The ongoing Russia-Ukraine war has illustrated the devastating
global economic costs of great-power conflict, including disruptions to food security, supply chains, energy
markets, and inflation. These repercussions serve as a cautionary example of the potential consequences of
a U.S.-China clash, reinforcing the case for shared hegemony as a more viable path. In Trump’s second term,
Washington’s approach to these issues will be tested, shaping the patterns of great-power interactions for at
least the remainder of the decade.
Whatever happens, across advanced technology and artificial intelligence, climate action and decarbonization,
and international trade and tariffs, the UAE — alongside other like-minded middle powers — is probably
positioned to play a pivotal role in promoting international cooperation rather than division. Hosting COP28
in 2023 showcased the UAE’s significant negotiation and diplomatic capabilities as it effectively reconciled
conflicting views on the energy transition. The conference highlighted the country’s ability to help shape an
inclusive global agenda supportive of climate action.
Going forward, middle powers, including the UAE, also have an opportunity to demonstrate that initiatives
like the BRI and IMEC can be complementary rather than contradictory. In doing so, they can help bridge gaps
and foster economic and strategic integration across competing initiatives.
Countries such as the UAE, Saudi Arabia, Egypt, Turkey, Oman, and Qatar are likewise well positioned to
revitalize de-escalation and pacification in global conflict resolution. Their ability to engage across divides
could enable them to support efforts to mediate reconciliation between Russia and Ukraine, facilitate dialogue
between Israel and Iran, and support political transitions in Sudan, Libya, Syria, Lebanon, and Yemen.
By leveraging their strategic interests and capacity to work with diverse regional and international stakeholders,
these middle powers can play a crucial role in narrowing divisions among competing global powers and
fostering stability in an increasingly polarized world.
Despite occasional controversy, criticism, and skepticism — particularly in Western circles — the UAE continues
to position itself as an emerging middle power within a dynamic international system. Its ability to balance
competing interests reflects a broader strategy of fostering opportunities and strengthening its global
influence.
Looking ahead, a critical question remains: Will emerging middle powers like the UAE serve as mediators and
compromise-builders in the face of global power rivalries? Or will they eventually be compelled to align with a
specific bloc, thus deepening global divisions — especially if competition escalates into open confrontation?
