1996 Loosely Structured Alliance – Oman-Qatar Axis – Qatar Coup – Employment Imbalances–TourismGrowth The seven emirates that make up the United Arab Emirates (UAE) have contin- ued to withstand the pressures of more straightened times better than many of their neighbours, thanks mainly to Abu Dhabi’s considerable enduring oil stocks and to Dubai’s imaginative investment programme in alternative eco- nomic strategies. There remain, however, enough ghosts of the past and pre-sentiments of the future within the Gulf region to ensure that the country willnotgetcomplacentagain. AStable StatusQuo The UAE has always been a loosely structured alliance between the ruling fami- lies of each emirate, with the major players being Abu Dhabi and Dubai, fol- lowed by Sharjah. Executive positions are granted a five year tenure and are, theoretically, up for renewal in 1996, but any significant changes from the cur- rent status quo are unlikely. Sheikh Zayed bin Sultan al-Nahyan of Abu Dhabi is likely to remain President and Sheikh Maktoum bin Rashid al-Maktoum Prime Minister. Sheikh Maktoum’s brother, Sheikh Mohammed, the UAE’s minister of defence, was appointed crown prince of Dubai in January 1995, an indicator of his eventual succession and a recognition of the greater role he is playing in day-to-daypoliticalaffairs. The GulfPerspective Relations with Iraq and Iran and the continuing peace process in Israel con- tinue to dominate Gulf affairs. In a speech in Dubai, Sheikh Mohammed indi- cated what many observers took to be a shift in the UAE’s position on Iraq. He drew comparison with the slow progress being made on the Israeli question and the continuing sanctions enforced against Iraq. Leaning away from the US line, he spoke of the need for building bridges and of the necessity of re-inte- gratingIraqwithinastrong pan-Arabgrouping. Within the context of the Gulf Co-operation Council (GCC), this was taken as a further indication of the UAE’s alignment with the Oman/Qatar axis and a shift away from Saudi Arabia, Kuwait and Bahrain, where distrust of Baghdad remains dominant. A similar trend could be noted when Mr Ahmed Humaid © koninklijke brill nv, leiden, ���9 | doi:�0.��63/9789004408�65 _0�� 1996 295 al-Tayer, the minister of state for financial and industrial affairs, attacked pro- posals for a Middle East development bank and a Middle East common market. In an interview with the government-run al-Ittihad newspaper, Mr al-Tayer said that such overtures were unacceptable while the current Israeli peace talks remain log-jammed. He suggested that such proposals may even be against Islamic law while Israel occupied Arab lands. There remains within the GCC a clinging suspicion that Israel continues to benefit from the peace process attheexpenseofArabaspirations. While reconciliation with Iraq remains to be fully achieved, the seemingly interminable wrangle with Iran over the islands of Abu Musa and the Greater and Lesser Tunbs continues. The temperature rose somewhat when US defense secretary William Perry, during a tour of Gulf states, described these as ‘occu- pied’ and went on to accuse Iran of stockpiling chemical weapons there. On the wilder shores of this issue there were reports in the foreign press of Iranian na- tionals being landed on UAE shores. UAE officials did not seem unduly worried and commendably chose not to be drawn into a talking war. The UAE seeks to have the dispute resolved by the International Court of Justice or perhaps through the United Nations Security Council. Meanwhile, Mr Ali Mohammad Besharati, Iran’s interior minister, called for further friendly bilateral talks on theissue. With both Iraq and Iran potentially unstable in the region, defence remains a key priority for the UAE and other GCC states. Moves for a GCC defence force re- main to be cohesively formulated. On the one hand, substantial cost benefits would be achieved, on the other there are misgivings of a Saudi dominated he- gemony. However, critics of the status quo suggest that over-reliance on the fu- tureaidof US andotherwesternalliestoprotectoilsourcesisshortsighted. Again, indicators are that UAE, Qatar and Oman will resist any immediate pressures on the independence of their forces. Since each Emirate operates its own defence procurement, further rationalisation would be difficult to achieve. Indications from IDEX 95 (military equipment exhibition) held in March in Abu Dhabi were that future arms contracts would have strong offset venture components linked with them. Trade at IDEX was sluggish, although an up-coming US$4 billion deal for 80 attack aircraft is keenly anticipated by US, EuropeanandRussiansuppliers. Internally, the UAE has remained resistant to the forces of unrest that neigh- bouring states have suffered. This was partly due to economic buoyancy and partly to a delicate balancing act between acceptable social change and main- taining traditional Islamic virtues. The UAE has a significant Shi’ite minority which could be influenced by fundamentalist pressures, but there appear at present to be no vehicles for such pressures to emerge. The decision to try a.