stratEGIC Monthly (01/2023)
Trade, Nuks & COP28: Diplomacy in Action
By Piercamillo Falasca, Veronica Stigliani and Ashleigh White
This, the 12th edition of our stratEGIC Monthly, features analyses of key issues that defined the Euro-Gulf space in January 2023 and focuses on how the UAE is expanding its international relations to face new geopolitical realities and Saudi Arabia's growing power.
UAE’s Al Jaber Appointed President of the UN’s COP28 Climate Summit
By Piercamillo Falasca
On 12 January, the United Arab Emirates (UAE) appointed Sultan Al Jaber — the CEO of the Abu Dhabi National Oil Company — to preside over the United Nation’s (UN) COP28 Climate Summit, which will take place from 30 November in Dubai. Leaders from more than 190 countries will meet to discuss how to reach the Paris Climate Agreement goal of limiting temperature rises to 1.5 degrees Celsius above pre-industrial levels. Announcing Al Jaber’s appointment, the UAE praised his climate credentials, including his role as founder of the renewable energy company Masdar and as a vocal supporter of a rapid energy transition. As Al Jaber noted statement, “We will bring a pragmatic, realistic and solutions-oriented approach that delivers transformative progress for climate and for low-carbon economic growth.” The UAE, a major oil producer, has pledged to reach net-zero emissions by 2050, meaning it would remove from the atmosphere at least as much planet-warming pollution as it emits.
The UAE Expands Its International Relations
By Veronica Stigliani
The UAE commenced 2023 on a proactive stepping with members of the government embarking on a series of official visits and international events, in line with the country’s ambition to consolidate its role as a central player in the Gulf region and beyond. This goal has been made explicit by the document presented by the Council of Minister at the beginning of the month—the expansion of international partnerships among the five government priorities. In addition to hosting the Abu Dhabi Sustainability Week, the UAE developed its ties with countries across the world, from the Americas to Europe, Asia to Africa. Abu Dhabi confirmed its support to Ukraine by dispatching household electricity generators and discussing the situation with Ukraine’s President Volodymyr Zelensky. During a visit to the Gulf of UK Secretary of State for the Department of Business, Energy, and Industrial Strategy, Grant Shapps, the country strengthened its energy collaboration with the UK. The UAE Foreign Minister, Abdulla bin Zayed Al-Nahyan, travelled to Belgrade to meet with Serbia’s President, Aleksandar Vucic, and later discussed relations with Italy in a phone call with his counterpart, Antonio Tajani. The UAE President, Mohamed bin Zayed Al-Nahyan, received South Korean President, Yoon Suk Yeol, Kazakhstan’s President, Kassym-Jomart Tokayev, and Pakistan’s Chief of Army Staff, Lieutenant General Asim Munir. He personally travelled to Islamabad to discuss cooperation with Pakistan’s Prime Minister Shehbaz Sharif. As for Africa, the UAE President held two separate meetings with the President of the Democratic Republic of Congo, Felix Tshisekedi, and with the Special Envoy of Algeria’s President, Salah Boucha. At the regional level, Abu Dhabi hosted a summit on security, trade and development, which gathered representatives from Bahrain, Egypt, Jordan, Oman and Qatar. The UAE’s proactivity confirms a trend that has been underway in the past years which is likely to continue: Abu Dhabi is determined to develop global engagement and emerge as a pivotal node.
Saudi Arabia Announces its Intent to Use Uranium to Strengthen the Nuclear Power Industry
By Ashleigh White
On 11 January, Saudi Arabia’s Energy Minister, Abdulaziz bin Salman al Saud announced plans to use domestically sourced uranium to strengthen its nuclear power industry. As the world’s top oil exporter, Riyadh announced that a recent exploration showed a diverse portfolio of uranium in the state’s natural resources. Saudi Arabia expressed plans to follow its international commitments and allow full transparency as they further develop their energy industry. Saudi Arabia has a budding nuclear programme which would be developed further with the addition of uranium enrichment. However, this announcement sparked questions as uranium enrichment can be used for peaceful means but also to create nuclear explosives for military purposes. The announcement has further implications due to Crown Prince Mohammed bin Salman’s statement in 2018 that Saudi Arabia would develop nuclear weapons if Iran did so. Since Iran-Saudi relations deteriorated even further in the latter half of 2022, Saudi nuclear ambitions in remains unknown. Saudi Arabia is not the only Gulf Cooperation Council (GCC) state with a developing nuclear programme as the UAE, became the first to operate a nuclear energy plant. However, the UAE has committed to not enriching domestic uranium. At the same time recent UN reports have been published stating that Iran is enriching uranium to 60% purity while the 2015 deal between Tehran and western powers capped enrichment at 3.67%. Although many countries expressed concern with the UN’s recent findings, Iran’s regional rival Saudi Arabia feels this most acutely. Many view Saudi Arabia’s recent announcement as a reaction to Iran’s nuclearisation. Moving forward, it is likely that there will be further steps taken by Saudi Arabia into the nuclear sphere if the international community does not take decisive action to reduce Iran’s nuclear ambitions.
Saudi Aramco Announced a New Era of Investments
By Piercamillo Falasca
On 30 January, during the 7th edition of the In-Kingdom Total Value Add Forum in Dhahran, Saudi Aramco signed 100 deals valued at about $7.2 billion to help advance a diverse, sustainable and globally competitive industrial ecosystem in Saudi Arabia. The company also launched Aramco Digital Co to accelerate its digital transformation effort. During the event, Aramco signed a strategic partnership agreement with Zoom, as well as struck a deal with Taulia to implement supplier financing solutions. Additionally, the company entered into a definitive agreement with DHL to form a joint venture and offer procurement and supply chain services and partnered with Saudi Arabia’s Ministry of investment to develop and promote investment opportunities. Another agreement signed by Aramco during the event was with Accenture to accelerate system integration and digital solution services. It also reached a deal with Achilles to develop and localise environmental, social, and governance rating services. The initiative encourages international companies to establish regional headquarters in Saudi Arabia. President and CEO of Saudi Aramco, Amin Nasser, said that “We are planning to invest $1.9 billion over the next three years, making it the biggest Aramco investment in digital to date, while adding value to the Kingdom’s digital ecosystem.” He stressed that Saudi Arabia will be “truly a Kingdom of opportunities for all.”