Sanctions Gap for Lukashenko Needs Immediate Closing: CEPA's Perspective

The United Arab Emirates (UAE) and Russia are forging a closer relationship, driven by mutual economic interests, strategic diversification, and geopolitical positioning amid ongoing Western sanctions against Russia. This growing partnership is set to double bilateral trade within five years, expand cooperation in trade, investment, energy, transport, and technology sectors, and strengthen diplomatic engagement on regional and global issues.

Economic diversification and growth are key factors behind this closer relationship. The UAE seeks to broaden its global economic partnerships beyond traditional Western markets, tapping into Russia’s large market and the Eurasian Economic Union (EAEU). Russia values the UAE as a gateway to the Middle East and North Africa (MENA) region and as an investment source, especially in advanced technology and infrastructure.

Energy and trade deals also play a significant role in this growing partnership. The two countries have enhanced cooperation in energy investments and signed agreements facilitating trade in goods and services. For instance, the Trade in Services and Investment Agreement (TISIA) covers sectors like fintech, healthcare, transport, and logistics, while customs duties on many goods have been reduced to boost trade flows.

Geopolitical and diplomatic considerations are another crucial factor. The UAE has played a mediating role in Russia-Ukraine relations and seeks to maintain balanced relations with global powers. Both nations exchange views on Middle East stability, international security, and support for diplomatic efforts in conflicts such as the Israeli-Palestinian one. Russia appreciates the UAE’s diplomatic mediation efforts and growing economic ties despite Western sanctions.

The deepening UAE-Russia ties provide Russia with economic lifelines circumventing some impacts of Western sanctions by opening alternative trade routes, investment, and access to Middle Eastern markets, reducing Russia’s international isolation. For the UAE and other regional actors, broadening ties with Russia offers greater geopolitical leverage and diversification of strategic partnerships, potentially complicating Western influence in the Middle East.

The UAE's approach exemplifies a pragmatic balance, maintaining ties with Western countries while engaging economically and diplomatically with Russia, thus reshaping regional geopolitical alignments and economic networks amid ongoing global tensions. However, this alliance has drawn criticism in the U.S., with some congressmen demanding to block deals until the UAE ceases "complicity in genocide."

The threat of secondary sanctions from the Trump administration poses a risk to the UAE-Russia alliance. Economic pressure on the UAE is seen as a strategy to deter Kremlin ambitions. The UAE spent $154 million on lobbying in Washington between 2016 and 2022 to mitigate such pressures.

Trade between the UAE and Russia nearly tripled from $4 billion in 2021 to $11.5 billion in 2024. Abu Dhabi is actively involved in the North-South International Transport Corridor, connecting Russia with Africa and India. Russian capital has flooded into the UAE, and the flow of gold and diamonds allows their origin to be concealed and access to global markets.

Experts suggest that to deter Kremlin ambitions, it's crucial to disrupt economic networks, including applying pressure on the UAE. Trade between the UAE and Belarus increased by 47 times during the same period, reaching $3.9 billion. The UAE's vast investment potential plays a significant role in its relations with the West and Moscow.

In conclusion, the UAE-Russia relationship is strengthening economically and politically for mutual benefit, partly as a strategic response to Western sanctions on Russia. This dynamic influences broader geopolitical balances by expanding Russia’s economic partnerships and offering the UAE enhanced regional influence and economic diversification opportunities.