Despite the Western sanctions on Moscow related to the Ukraine conflict, economic cooperation between Russia and the United Arab Emirates (UAE) has been thriving. According to a report by Bloomberg, the flow of Russian oil and precious metals into the emirates has significantly increased, while Moscow has been receiving supplies of microchips and civilian drones from the UAE.
One of the reasons for the growing economic cooperation between the two countries is the UAE’s advantageous position as a geopolitical swing state. Goldman Sachs’ Jared Cohen noted that the UAE is benefiting from this position, which has contributed to its growing economic ties with Russia.
Apart from the increase in exports, the UAE has also become an attractive financial haven for wealthy Russians. With more than 4,000 Russian companies operating in the Gulf state, discussions are underway for a free-trade agreement between the UAE and the Russia-led Eurasian Economic Union.
A recent report published by Henley & Partners suggests that the UAE is set to attract the largest share of private wealth this year as Russian capital seeks new investment opportunities. Russian Deputy Foreign Minister Mikhail Bogdanov has also acknowledged the rapid growth of trade and cooperation between the UAE and Russia, stating that the UAE is on track to become one of Russia’s top 20 economic partners.
In particular, the UAE has emerged as a significant destination for Russian gold. As Western governments closed their markets to Russian gold as part of the sanctions, the UAE stepped in and became a key buyer of the precious metal.
Interestingly, while the UAE has remained largely neutral in the Ukraine conflict, it has maintained close ties with its Western partners while refraining from imposing sanctions on Russia. This has put the UAE in a delicate position, as the US and its allies have exerted pressure on Abu Dhabi to limit its trade with Moscow in an effort to isolate Russia.
The increasing economic cooperation between Russia and the UAE speaks to the resilience and adaptability of both countries in the face of Western sanctions. Despite the challenging geopolitical climate, they have managed to find common ground and expand trade and investment ties.
These developments also signify the evolving dynamics in global economic relations, wherein countries like the UAE are carving out their roles as key players in international trade and finance. As the UAE continues to attract Russian capital and deepen its economic partnership with Moscow, it is likely to become an even more significant player on the global economic stage.
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