United Arab Emirates (UAE): Issues for U.S. Policy [March 10, 2011]   [open pdf - 255KB]

"The UAE's [United Arab Emirates] relatively open borders, economy, and society have won praise from advocates of expanded freedoms in the Middle East while producing financial excesses, social ills such as prostitution and human trafficking, and relatively lax controls on sensitive technologies acquired from the West. The UAE government is authoritarian, although it allows substantial informal citizen participation and consensus-building. The openness of its society and its economic wealth have allowed the UAE to largely avoid the popular unrest in the Middle East thus far. [...] Partly because of substantial UAE federal government financial intervention and ample financial reserves, the political and social climate remained calm through the 2008-2009 global financial crisis and recession. The downturn hit Dubai emirate particularly hard and called into question its strategy of rapid, investment-fueled development, especially of luxury projects. Many expatriate workers left UAE after widespread layoffs, particularly in the financial and real estate sectors, and the decline affected property investors and the economies of several neighboring countries, including Afghanistan. The downturn also touched Afghanistan in the form of major losses among large shareholders of Kabul Bank, Afghanistan's largest private banking institution. At the outset of 2011, however, some economists were becoming more optimistic that Dubai emirate was poised for a rebound. For the Obama Administration and many in Congress, there are concerns about the UAE oversight and management of a complex and technically advanced initiative such as a nuclear power program. This was underscored by dissatisfaction among some members of Congress with a U.S.-UAE civilian nuclear cooperation agreement. The agreement was signed on May 21, 2009, and submitted to Congress that day. It entered into force on December 17, 2009. However, U.S. concerns about potential leakage of U.S. and other advanced technologies through the UAE to Iran, in particular, are far from alleviated."

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CRS Report for Congress, RS21852
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