Despite the nearby war and the oil-price dive, the petroleum-rich United Arab Emirates is faring well and with fewer crises than its equally rich neighbors on the Arabian Peninsula. Yet, Western observers say, distant storm clouds may be gathering. These include: the effects of the oil price slide, the intensification of the Iran-Iraq war, and the issue of effective leadership of the Emirates.
While the people of the UAE still enjoy one of the world's highest per capita incomes, revenues are increasingly depressed because of plummeting oil prices. However, unlike Kuwait, the seven tiny sheikhdoms of the UAE have not been subjected to extremist Shiite Muslim terrorist attacks. And no serious civil unrest has occurred, despite a potentially volatile population that includes many expatriate Palestinians and ethnic Iranian Shiites. Links with the increasingly effective regional Arab Gulf Cooperation Council serves to reinforce the UAE's defense capabilities.
The emirates of Dubai and Sharjah have close links with Iran. Iran finds the UAE's air and sea links essential for skirting Iraqi military forces to the north. And the emirate of Fujayrah is ideally located to observe shipping destined for Iraq.
In short, Iran finds a neutral UAE useful -- for now. But some Western diplomats express concern at the flourishing Iranian Islamic and educational activities permitted by the UAE authorities. They fear an infrastructure is being built for future activity of a more subversive nature.
Part of the UAE's accommodating stance toward Iran is to counter the sometimes heavy-handed influence of Saudi Arabia, with which it has lingering historical frictions. Some observers also find an anti-Saudi motivation in the establishment of diplomatic ties with the Soviets by both the UAE and Oman. Saudi Arabia opposes a Soviet presence on the peninsula.
It would overstate things to say the UAE is facing a leadership crisis. But likely successors to the aging Sheikh Zayid ibn Sultan Al Nuhayyan are either too old or lack charisma.
Dissolution of the federation is not imminent. But observers feel it would be unfortunate if a combination of depressed oil income, Iranian-inspired subversion, and lack of leadership undermined the nation-building progress accomplished thus far.
The writer was a US government official for two decades before becoming a consultant on international affairs.