Saudi Arabia and the UAE- are they close allies or competing neighbors?

By By John Solomou
Nicosia [Cyprus], January 17 : In one of his Umrah (Islamic pilgrimage) trips to Mecca years ago, Sheikh Zayed Al-Nahyan, founding father of the United Arab Emirates, described the relationship between his country and Saudi Arabia in this way: "The UAE is with Saudi Arabia through its heart and soul, and we believe that we have one destiny and that we have to act as one and stand by each other."
Such statements are made from time to time, emphasizing the historically close ties between the two neighbouring monarchies, but do not reflect the whole truth, as Saudi Arabia and the UAE are not fully aligned on regional issues, and because their economic models increasingly overlap, they are strong competitors.
One can say that these two states, both leading members of the Gulf Cooperation Council and the largest Arab economies in the Gulf, are simultaneously close allies and competing neighbours.
The de facto rulers of the two countries - Crown Prince Mohammed bin Salman in Saudi Arabia (MBS) and Crown Prince Mohammed bin Zayed (MBZ) in Abu Dhabi- have developed a close relationship and in fact, MBZ was a mentor of MBS. This close relation, however, does not prevent them from following opposite lines when the interests of their own countries differ.
Last July there was a bitter public rift between the UAE and Saudi Arabia over oil production quotas when the UAE rejected a proposal by Saudi Arabia and Russia to extend oil curbs for another 8 months.
Abu Dhabi has invested hundreds of millions to expand its production capacity and wanted to increase oil sales, as demand was picking up. Emirati objections did not allow OPEC to take a decision for many days.
Reacting to this, the Saudi Kingdom suspended flights to the UAE, citing concerns about the spread of the coronavirus. It also announced that imports from free zones or linked to Israel would be excluded, showing in this way MBS's displeasure for the normalization of relations between the UAE and Israel.
It should be noted that Saudi Arabia announced on February 16 that companies would soon risk losing access to government contracts if they do not relocate their regional headquarters to Saudi Arabia itself.
The Saudi crown prince also announced that he plans to spend about 147 billion USD to turn Saudi Arabia into the principal air and sea logistics hub for the region. MBS's plan includes the establishment of a high-speed railroad, expanded port services as well as a new airline.
This is a direct challenge to Dubai, which is currently the business hub of the region, and which does not rely on oil exports. Dubai has the largest man-made harbour in the world and is a hub for service industries like finance and IT, while its airport is the busiest in the world for international passengers.
Apparently, both countries have realized that they must move to a post-hydrocarbon future before the world moves to green energy. World demand for fossil fuels is diminishing and there is a growing pressure to replace fossil fuels with renewables.
So, both Saudi Arabia and the UAE have decided that they should channel their efforts to develop other sources of revenue, such as tourism- mainly luxury tourism and attracting foreign investments.
Saudi Arabia is trying to imitate Dubai's great success in tourism, so it started developing many resorts in the Red Sea, building luxurious hotels, dozens of shopping malls, and creating amusement parks and recreation facilities.
It is even building the 1,000-meter- tall Jeddah Tower, which will be higher than Dubai's iconic Burj Khalifa Tower by 72 meters. However, the completion of the Jeddah Tower, estimated to cost more than 1.4 billion USD, has been delayed due to labour issues with a contractor. When finished, the Tower will be the crown jewel of the Jeddah Economic City.
The Saudi Kingdom, in its effort to boost tourism, is building the Qiddiya, a mega-entertainment centre in Riyadh that will have golf courses, water parks, roller coasters, and other amenities.
It should be pointed out that Saudi Arabia benefits from hajj tourism, as millions of Muslims from all over the world every year visit the holy cities of Mecca and Medina. Now the government of the Kingdom is trying to attract also other types of tourists, but to be able to achieve that it must first relax is very strict religious and other rules and offer a better quality of life.
For its part, Dubai attracts millions of tourists every year. Dubai Expo has been the largest global event held since the outbreak of the pandemic. It was visited by more than eight million people in the period up to December 27, 2021.
Among Arab states, Dubai offers an unparalleled quality of life to the thousands of people who stay there for business, as it is a global investment hub. Furthermore, it is promoting initiatives to ease barriers to entry for business and leisure travellers.
Obviously, Saudi Arabia and the UAE, as they attempt to diversify their economy away from hydrocarbons, follow similar economic models and find themselves competing in the fields of tourism, global investments, and highly skilled labourers and executives.
The two states are close allies, who are cooperating on most issues, but on other questions, they have different approaches. For example, the UAE has withdrawn from the Saudi-led coalition fighting the Houthis in Yemen and has normalized relations with Israel.
Despite its far smaller size and wealth, the UAE has proven to be a valuable political and military asset for the United States. For this reason, it became the first Arab country to receive the F-35 aircraft -the US most advanced fighter jet- while the US Administration has suspended the sale of offensive arms to Saudi Arabia, citing concerns about human rights violations in the war in Yemen. Of course, this did not go down well in Riyadh.