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UAE Economic Statecraft Policy Tool Evaluation


Most countries in the developed world apply a variety of approaches to acquire foreign knowledge about budgetary, military, and/or diplomatic tactics. Economic statecraft policy refers to the application such knowledge in an attempt to control international laws. Various tools that are monitored during the evaluation of economic statecraft policies include trade and foreign aid. These regulations control the global flow of capital among other functions. This essay provides an insight into the economic statecraft policy tool of the United Arab Emirates (UAE).

Forms of Economic Statecraft Tool Used in the United Arab Emirates

According to Alesina and Dollar, a number of components are considered during the evaluation of economic statecraft policies1. These factors include the instruments that are meant for implementation in the economy, area of their application, and scope of influential opinions that are primarily based on attitudes and beliefs2.

The development of economic statecraft policy tool in the UAE has been staggering because of financial challenges and division of various stakeholder parties. It also disagrees with the regimes that are concerned with lending and determination of wealth proportions in both public and private sectors. Currently, the country is using its financial capacity to influence foreign policies3. It is also examining various trade privileges and tariffs. This trend has been immensely boosted by the availability of oil deposits, centrality to regional flow of finances, and stable currency against the US dollar4. The success of the UAE’s economic stability has been realized due to increased growth of the financial sectors. This situation has enriched its command in the global economic statecraft. Although the country has a sovereignty deficit, dialogues among the ruling families and investors have significantly brought about an economic boost. The UAE’s financial growth has intensified not only to capture various neighboring nations in the Gulf Cooperation Council but also other countries in the international arena. This situation is evidenced by the steady intensification of banking systems in the country5.

Establishing Trade Policies and Agreements Especially on Tariffs

The UAE has remained in the forefront to establish policies that pertain to trade. For instance, the country together with the USA recently signed a non-free trade and investment agreement in a bid to negotiate various policies concerning the economy. Such dialogues are meant to improve the economic binding of the two nations6.

Presently, the UAE is one of the countries that discuss pacts concerning trade tariffs and eligibility of the World Trade Organization (WTO) members. This arrangement has significantly boosted its multilateral trade policy. As a result, its position to control economic decisions has strengthened. This situation has enabled it to counter the ever-rising global competition. Moreover, the country has a strong command in the global interface due to the state of its current economy. Therefore, it frequently engages various countries in free international trade to improve bilateral agreements between the GCC and various European nations. This situation has enabled the UAE to realize an increase of approximately 90-percent in exports and over 120-percent in imports7.

Control of Free Economy Trade Policy

Various countries such as the UAE among others have been negotiating favorable trade policies that fit their economies. The country has variously been discussing matters that pertain to free economy, openness, enhancement of trade exchange, and investments in an attempt to realize improved profits in the midst of competitors. This situation has compelled the country to encourage delivery of quality products. Free economy has also enabled the UAE to enter agreements with non-producing oil countries such as Germany among others. This move has seen it improve its trade exchange to about 9 billion dollars; hence, advancing its prominence globally8.

Application of Positive Sanctions

Many countries often offer economic rewards to other nations in an attempt to reach agreements that result in trade cohesiveness. For instance, the UAE has been providing incentives to investors to improve its foreign investment of the state through influence to enhance the economy. The foreign investors are majorly non-oil producing countries such as Germany and the USA among others. Another form of positive sanction is depicted in the direct purchase of goods, especially from the USA. As a result, the USA has regarded the UAE as one of its most important export destination countries9.

Statecraft Economic Policy of the UAE and International Politics

Politics play a critical role to determine the influence of a nation on global business level. Powerful nations strive to dictate various forms of business undertakings such as regulation of tariffs, improvement of influences by imposing both positive and negative sanctions on other nations10. Political influence also leads to formation of trading blocs that boost powers of weighing various trade agreements and common currencies among others11. The UAE exercises such powers through negotiations and formation of various trading blocs. It plays a critical role in the GCC to superintend trade dialogues. It has also influenced the oil trade industry immensely since it is one of the leading fuel producers in the world. Lastly, the UAE is a member of the WTO that negotiates the regulation of trade tariffs and treaties. As a result, it has the ability to control the policies of other nations due to its strong economic statecraft12.


An economic statecraft has been described as a means by which a nation controls pecuniary policies of foreign countries due to its financial stability in the international arena. The essay has assessed the economic statecraft policy tools that are used by the UAE to determine its power. The UAE is known for using various forms of economic statecraft policies such as engagement in the development of trade treaties, regulations of tariffs, control of foreign trade policies, and establishment of interchange blocs. This situation has enabled utilization of both economic and financial resources that influence other nations’ policies and trade negotiations. However, although such economic statecrafts are mostly implemented by the superpower nations, challenges of discrimination and unfair treatment that are brought about by various political forces control the global economy; hence, the less developed nations usually experience negative trade effects among others.


Alesina, Alberto, and David Dollar. “Who Gives Foreign Aid to Whom, and Why?” Journal of Economic Growth 5, no.1 (2000): 33-63.

Baldwin, David. Economic Statecraft. Princeton, US: Princeton University Press, 1985.

Hirschman, Albert. National power and the structure of foreign trade. California, University of Californian Press, 1980.

Katzman, Kenneth. United Arab Emirates (UAE): Issues for US Policy. Darby, PA: Diane Publishing, 2010.

Spero, Joan, and Jeffrey Hart. The politics of international economic relations. Boston, MA: Cengage Learning, 2009.

Whalley, John. “Recent regional agreements: why so many, why so much variance in form, why coming so fast, and where are they headed?” The world Economy 31, no. 4 (2008): 517-532.


  1. Alesina, Alberto, and David Dollar, “Who Gives Foreign Aid to Whom, and Why?” Journal of Economic Growth 5, no.1 (2000): 33.
  2. Alesina and Dollar, 35.
  3. Baldwin, David, Economic Statecraft (Princeton, US: Princeton University Press, 1985), 21.
  4. Baldwin, 22
  5. Ibid, 26
  6. Whalley, John, “Recent regional agreements: why so many, why so much variance in form, why coming so fast, and where are they headed?” The world Economy 31, no. 4 (2008): 517.
  7. Whalley, 518
  8. Spero, Joan, and Jeffrey Hart, The politics of international economic relations (Boston, MA: Cengage Learning, 2009), 45.
  9. Katzman, Kenneth, United Arab Emirates (UAE): Issues for US Policy (Darby, PA: Diane Publishing, 2010), 33.
  10. Hirschman, Albert, National power and the structure of foreign trade (California, University of Californian Press, 1980), 41.
  11. Katzman, 35
  12. Ibid, 36
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1. StudyKraken. "UAE Economic Statecraft Policy Tool Evaluation." October 26, 2021.


StudyKraken. "UAE Economic Statecraft Policy Tool Evaluation." October 26, 2021.


StudyKraken. 2021. "UAE Economic Statecraft Policy Tool Evaluation." October 26, 2021.


StudyKraken. (2021) 'UAE Economic Statecraft Policy Tool Evaluation'. 26 October.

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