What does the UAE stand to gain from joining the I2U2 and will its membership impact its relations with China?

Abdullah al-Wandawi is an MA candidate at KCL studying Politics and Economics of the Middle East. His interests lie in security studies and neoliberalism in the MENA region as well as the international relations of Gulf Cooperation Council member states.

Alliances and partnerships within the Middle East have continually been shaped and re-shaped since the Arab Spring uprisings beginning in late 2010. Over the past decade, Saudi Arabia and the UAE have forged much deeper ties with Egypt, the Gulf Cooperation Council (GCC) all but imploded as members; Saudi Arabia, the UAE, and Bahrain initiated a full-scale land, air, and sea blockade of Qatar (another GCC state) from June 2017 to January 2021. This caused Qatar to rethink its regional relations forging deeper military ties with Turkey and deeper economic and diplomatic ties with Iran. The Arab monarchies of Morocco, the UAE, Bahrain, and Saudi Arabia have all begun to develop increasingly warm relations with Israel; with the first three states establishing formal diplomatic relations with the once regionally isolated state in 2020. China and Russia have swooped in the region with Russia now effectively controlling Syrian airspace and China making enormous strides in its Belt and Road Initiative (BRI). 

Now, a new regional bloc has risen in the Middle East. Known as the I2U2, the group comprises Israel, India, the United Arab Emirates (UAE), and the United States. On the 14th of July 2022, the heads of each state convened for their first summit virtually, with President Biden and Israeli Prime Minister Yair Lipid attending together in Jerusalem and President Sheikh Mohammed bin Zayed al-Nahyan and Prime Minister Narandra Modi connecting virtually. Following this meeting, a joint statement from the I2U2 heads of state was released, emphasising the need for increased cooperation on economic fronts as well as on tackling food and water security. However, between the lines of economic cooperation, the underlying purpose of the I2U2 is to counter the growing economic and military presence of China in the Middle East, especially from the perspective of the United States – China’s biggest international rival with both states having vested interests in the region. India is also a fierce rival of China with both nations disputing almost their entire 2,000+ mile-long border, and in 2020 diplomatic relations soured to their lowest level in decades as cross-border clashes resulted in the deaths of 20 Indian soldiers.

Therefore, from the outside, it seems almost ironic that the UAE has joined the organisation as China is the UAE’s largest trading partner, with total trade being worth $60.2 billion USD as of 2020 which is a value higher than its total trade with the United States and India combined (OEC, 2020). The UAE was also the first Middle Eastern nation to see two Chinese warships dock at its shores in 2010, and in 2018 China established a comprehensive strategic partnership with the UAE, the highest level of diplomatic relations a nation can have with China. The UAE’s inclusion into the bloc seems even more striking given that both the United States and India are also part of the “Quadrilateral Security Dialogue” (Quad), a grouping which engages in military exercises and seeks to confront China’s foreign policy agenda in the Indo-Pacific.

However, the UAE is able to play its strategic cards to its advantage and link arms with two of China’s strongest rivals – the United States and India – to pursue its own interests. For one, the UAE’s free export hubs are essential to Chinese foreign and economic policy as they provide China with a gateway into the rest of the Middle East and beyond as “60% of China’s exports to the UAE are re-exported to Africa and Europe”. In essence, the UAE acts a catalyst for China to further project its economic power across the region making it no surprise that the UAE is China’s largest exporting destination in the Middle East (OEC, 2020). The UAE and much of the Gulf are also extremely important to China for energy, without which China’s economic rise could not be sustained as China’s domestic energy production lags far behind its energy consumption. Conversely, China benefits from the security umbrella of the United States as it has provided the conditions to promote stability and prosperity for the Arab Gulf monarchies in one of the world’s most volatile regions meaning that the presence of the United States in the Gulf has aided the economic rise of China by ensuring that energy flows through the Gulf uninterrupted. 

For the UAE, joining the I2U2 presents a clear and necessary opportunity to deepen its ties with the United States and Israel to contain perceived threats from Iran. Israel and the UAE also have common security concerns, especially after the Arab Spring, and both perceive the Muslim Brotherhood as an ideological threat needing to be silenced. In the recent joint statement by I2U2’s heads of government, utilising Israel as a regional innovation hub is expressed. Israeli innovation is vital for the UAE as Israeli expertise has helped to dramatically improve the standards of the UAE’s cyber security apparatus.

India, the UAE, and Israel are all at risk of water and food insecurity and each Middle East and North African (MENA) nation, including the UAE faces political, social, and economic constraints on meeting food security goals. For the UAE, membership into the I2U2 means tackling these issues with India and investing $2billion USD to create climate-smart food parks to reduce food waste and conserve fresh water. From 1960 to 2015, annual renewable water resources have fallen from 4,150 cubic meters per capita to 1,280 in the MENA. On the other hand, water demand has been continually rising and this is largely due to high population growth, rapid urbanisation, and expanding irrigation. These have all factors are visibly notable to the UAE’s story as a rising economic and regional power in the MENA. As such, the I2U2 provides a great opportunity for the UAE to further economically integrate with India – its second-largest trading partner and largest source of labour, with Indians making up a third of the UAE’s total population.

Therefore, while the UAE’s relationship with China is vitally important, so too is its relationship with the rest of the I2U2, and while China will engage with the United States and India more aggressively in the Indo-Pacific, it is in China’s interests for U.S security to be maintained in the Gulf. China can act as a free rider on U.S security which guarantees stability in the Gulf, allowing China to pursue its economic foreign policy agendas in the Middle East, thus enabling China to increase its economic footprint across the entire region through its exports and BRI. As such the I2U2 is unlikely to impact China’s strengthening of diplomatic and economic ties in the Gulf. Thus, the UAE’s membership in the group will do little to affect its strong relations with China.

Image credit: https://www.thenationalnews.com/mena/2022/07/14/president-sheikh-mohamed-at-i2u2-summit-with-india-israel-and-us-leaders-in-pictures/

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