What do artificial intelligence, national identity, family values, and ethno-cultural tolerance have to do with each other? They provide interlocking means toward the goal of having an adequate labor supply for a coherent nation in a globalized world. How this works is perhaps nowhere clearer than in the United Arab Emirates. This three-part series will discuss the UAE based on conversations there during a recent visit. The first part will look more at the emirates in domestic terms; the second will place them in geoeconomic context; the final post will assess the implications of the emirates for the wider re-networking of globalization. The implications for investors are considerable. Understanding the re-networking of globalization is key to investing in it successfully, and for a variety of reasons the nature of this re-networking is revealed with particular clarity in the UAE.
The usual narrative one hears about UAE history stresses that the emirates once thrived on the trade in pearls. When artificial pearls were invented, the emitates’ economy collapsed. When oil and gas were discovered in 1958, the emirates got a precious second chance at developing a modern economy. Sheikh Zayed bin Sultan al Nahyan, the emir of Abu Dhabi, sought to join the Organization of Petroleum Exporting Countries (OPEC) in 1967. Sheikh Zayed, in collaboration with Sheikh Rashid bin Saeed al Maktoum, emir of Dubai, formed a federation of six emirates in 1971, which immediately became a member of OPEC. A seventh emirate, Ras al Khaimah, joined the initial six the following year. The UAE took on its current form, dominated by Abu Dhabi and Dubai with the emirate of Sharjah as the third power in the federation.
The core purpose of OPEC was to resist control by the industrialized, and often formerly imperial, powers that had the technology, expertise, and capital to develop oil and gas resources. Britain had dominated the emirates before withdrawing east of Suez in 1968, and the formative impulse of emirati federation was anti-imperial and developmental. The distinctive dynamism of the emirates is rooted in the fact that Dubai, while powerful, has few natural resources: 94% of emirati oil is in Abu Dhabi, which became the capital of the UAE. As a trading economy, Dubai led in diversifying the UAE’s development away from dependence on oil and gas. The relationship between Abu Dhabi and Dubai is often compared to that between Washington and New York, while the most frequently cited model for the UAE as a whole is Singapore.
The crucial point is that the UAE’s core political and economic driver was to grow through negotiating power with and among major industrialized countries that needed its petroleum resources to fuel their own development. To do so, it needed not only luck and skill but a labor force well beyond the capacity of a country with a population of roughly 300,000 in the 1970s. So it imported what it needed, usually on a contract basis and particularly from India, with which the emirates had long-standing commercial ties. The working conditions of this imported working class were often harrowing.
The country grew. Today the UAE’s population is over 10 million. About 10 percent are emiratis, Another 3 million are of Indian descent, a further million from elsewhere in South Asia. Emiratis grow up on Bollywood films. Mumbai is a two-hour flight away; it takes twice that time to reach Beirut. The emirates are effectively multicultural, with a decided orientation toward South Asia. This makes them different from other Persian Gulf cultures, and is a key to their prosperity, along with a commercial language and institutions taken over from imperial Britain and extended through relations with yet another former British colonial nation built on imported labor, often under very harrowing conditions indeed, the United States.
As a minority in their own country, the emiratis kept tight control over their own political and economic power, led by a highly effective monarchical aristocracy accustomed to sharing out decision-making and commercial rewards. Intermarriage with non-emiratis was – as emiratis today tell the story – more common into the 1990s that it is now. The nature of emirati identity is a live issue, although not one that is easily aired in public discussion. Membership in emirati families brings privileges such as free land and healthcare. It also brings obligations of fealty to the monarchy, which can and does, for example, forbid travel by emiratis to states at variance with UAE policy. A variety of people can gain UAE residence permits and, increasingly, passports, but actual emirati-ness is recorded in a “family book” and conveys an identity and social power beyond citizenship.
To deal with the resulting tensions, the UAE has, among other measures, empowered emirati women and stressed productivity and discipline among emirati youth, particularly through subsidized education (including at top international institutions), military service, and sport. (Government ministries compete against each other in sports leagues.) Senior emirati ministers and other officials are strikingly young and very often female. The empowerment of women has the usual implications for overall fertility, and a notable aspect of government policy is a growing emphasis on pro-family measures. The three emphases of recent UAE strategic policy—AI, family, and national identity – represent an attempt to ensure and extend emiratis’ future as the core population of a country in which they are highly likely to remain a minority.
So, too, does the government’s emphasis on diversity, in several senses. Alongside a ministry for national identity is a ministry for tolerance. This only appears to be a paradox. To judge from numerous conversations with UAE officials and other emiratis as well as expatriates – an inadequate term for 90 percent of the population – the UAE leadership is keenly aware that the country can continue to thrive only through the tolerance of diverse religions and cultures. Managing a dynamic relationship between nationalism and internationalism might not be to every emirati’s taste but it is essential to survival, whether cultural, military, or economic. But especially, perhaps above all, economic: the UAE has enshrined in its basic strategy documents a commitment to private-sector-led development, and the government is trying every means to get young emiratis into private positions rather than having them follow the easier path of government service.
The next post will look at how the UAE is using this distinctive combination of national identity and market-driven economics to drive its political-economic growth.