Can the UAE Solve the GERD Dilemma?
The United Arab Emirates’ (UAE) presence in the Horn of Africa has dramatically increased over the last few years, mainly through diplomatic activity, economic investments, and military engagement. Now, the conflict between Ethiopia, Sudan, and Egypt concerning the Grand Ethiopian Renaissance Dam (GERD), poses a challenge to regional stability. As talks in the Democratic Republic of Congo over the last months continued to stall, Addis Ababa completed a second-year water filling for the dam’s reservoir in July. Sudan and Egypt have sought mediation, fearing that their respective water supplies coming from the Nile would be jeopardized, while Ethiopia has strongly opposed the involvement of other international arbiters, such as the UN Security Council or the Arab League, in what it considers a regional issue to be worked out exclusively under the auspices of the African Union (AU). Given the GCC’s high level of engagement with the region, channeled through investments and ties with the three countries, it is in their interest, particularly the UAE, that the crisis does not expand and take on any more serious – potentially military – dimensions. In order to ensure that it does not occur, the UAE benefits from a neutral and unique stance in the conflict which may help ease talks and restore ties among the three actors.
A Big Dam Achievement
As its grandiose name suggests, the GERD has been presented since 2011 by Abiy Ahmed Ali’s government as a crucial means to end poverty in the country, crowd-funded by Ethiopians themselves and therefore being a subject of national importance. Ethiopian Prime Minister Abiy Ahmed has staked much of his credibility on the dam’s opening; given the recent parliamentary elections and the ethnic conflict in Tigray, giving up major concessions over the GERD was not conceivable for Abiy. The dam’s completion is also a political statement against ethnic separatism in Ethiopia; it is intended as a nationalistic unifying achievement bringing Ethiopia’s major ethnic groups together.
Ethiopia’s maximalist approach seems to have paid off. While many factions originally supported mediation through the U.S. or international bodies such as the UN, they have since modified their stances. The humanitarian crisis is among the points included in the comprehensive approach other mediators such as the US, the UN, and Europe prefer when intervening in the GERD talks, which made these actors even less regarded by Abiy. Consequently, all three have recently supported mediation in the African Union (AU) forum, drifting towards the Ethiopian PM’s conditions. The GCC countries’ efforts in the mediation process encountered a similar ending. The Arab League, which includes all the Gulf countries, held talks in Doha on June 15th, calling for a UN intervention in the Dam dispute. The Security Council then simply supported the AU’s role in the mediation. However, the Emirates prove to be an actor benefiting from good historical relations with the three countries.
The UAE’s Unique Diplomatic Stance
Prime Minister Abiy’s government has long taken a unilateral stance in foreign relations, both with Ethiopia’s long-standing issues and with regard to the GERD and negotiations with Sudan and Egypt. A clear example of this was the resolution of the Ethiopia-Eritrea conflict: the UAE played an important role during the mediation phase, resulting in a successful peace deal ending the twenty-year conflict. This example of successful help in the mediation of a conflict, which resulted in a Nobel Peace Prize for the Ethiopian PM, certainly benefits the Emirates’ position in its current diplomatic efforts.
On the other hand, more recently, the UAE experienced a drawback. Abu Dhabi had been active in attempting to further negotiations between Ethiopia and Sudan, concerning a border dispute between the two countries which started in December 2020 and raised tensions between Khartoum and Addis Ababa. Although Sudan enthusiastically backed the UAE’s efforts, the mediation ended with the Emirates’ withdrawal from talks at the end of May following the rejection by the conflicting parties of several peace initiatives proposed by the UAE. Tensions over the border issue are clearly connected to the GERD, and, just like the dam conflict, are exacerbated by domestic dynamics in Ethiopia. The Amhara, one of the largest ethnic groups in Ethiopia, inhabited and farmed the disputed al-Fashaqa region, and the UAE’s withdrawal came a month before parliamentary elections in Ethiopia, which reiterated its requirement for AU’s mediation of the border conflict.
Such a requirement puts pressure on Abu Dhabi’s involvement in the GERD’s conflict mediation, as it is an external actor to the AU. In this view, however, the UAE distanced itself from the Arab League’s position, which Ethiopia has criticized for bias towards Egypt and Sudan, two Arab nations, over Ethiopia, a non-Arab one. Secretary-General Ahmed Aboul Gheit clearly endorsed Egypt’s and Sudan’s positions in the dispute, as did Saudi Arabia and other members. The Emirates, however, broke with the other Arab states and retained a position of neutrality. Although this decision may provoke irritation in Cairo and Khartoum, the absence of a clear-cut statement on the dispute would represent a means to soften the recent trend in relationships with Abiy’s government.
The neutral diplomatic stance of Abu Dhabi with respect to the GERD dispute has been made possible by the already distinguished ties the country enjoys with Egypt and Sudan, highlighting its positive overall diplomatic position in the African region. Cairo benefits from close economic bonds with the Emirates, and looks at its long-time, close ally involvement in the region as a way to expand its own limited influence over the Horn and other neighbors. The recent meeting between Egyptian President Abdel-Fattah El-Sisi and Emirati Crown Prince Mohammed bin Zayed in Egypt’s capital signaled this aspect. The UAE has also made a positive impression on Sudan’s new government; once appointed in 2019, Prime Minister Abdalla Hamdok managed to keep amicable ties with Abu Dhabi, which provided Sudan with economic support. Khartoum carried out several contacts with the Emirates concerning the Dam and the latter’s involvement in negotiations, formally backing mediation by Abu Dhabi, both for the GERD and the border conflict with Ethiopia.
Economic Collaborations at Stake
Abu Dhabi’s active diplomacy in the Horn of Africa and in the GERD dispute, in particular, is not purely altruistic. The country aims to protect its investments and influence in the three countries, since any escalation would eventually be costly for Abu Dhabi as well.
The UAE has recently dismantled its base in Assab, Djibouti, and reduced its military presence in the Horn. Such military disengagement over the last years was replaced with economic influence and investments in the region trying to increase their soft power.
In recent years, the UAE has expanded its economic footprint in all three countries involved, indicating the importance of the region for Abu Dhabi. The diversification strategy that the UAE embraced, as developed by the country’s Vision 2030, led the opportunity-rich Horn of Africa to become a significant destination for the funds coming from the Emirates. On the Gulf of Aden and the Red Sea coasts, Dubai Ports (DP) has invested heavily in several locations to further maritime trade, one of the pillars of the country’s diversification strategy, including the key Berbera Port in Somaliland. In order to both exert its influence and profit from the countries’ economies, Abu Dhabi also funded the governments of Egypt, Sudan, and Ethiopia, in need of liquidity to be invested in new infrastructure projects. After the UAE-supported Egyptian coup d’état which ousted President Mohamed Morsi in 2013, Abu Dhabi transferred billions of dollars of cash to the new government, and Cairo still entertains the largest trade with the monarchy with respect to any other Middle Eastern country. A few months after Prime Minister Abiy took office in 2018, the Ethiopian Central Bank received a $1 billion deposit in aid from the Emirates, in order to ease a shortage of foreign currency.
Since 2013, the UAE has cultivated an increasing role in the three countries through credit lines, grants, investments, and loans. Yet, the flows of currency also underline the stakes at risk, should a military conflict in the region arise. Along with the aforementioned $1 billion in aid, Abu Dhabi also carried out investments in Ethiopia worth an additional $2 billion, given the economic importance of Ethiopia as an investment destination for the oil-rich UAE. The funds towards Sudan and Ethiopia, other than the means of State Owned Enterprises (SOEs) such as DP, are channeled through the Emirati Development Bank, the Abu Dhabi Fund for Development, or private foundations as the Khalifa Fund.
However, the most affected investments by the GERD negotiations are agricultural ones. One of the main pillars of the economic diversification plans of the Emirates is food security, representing a difficult domestic policy issue for all of the GCC states, which import 80 percent of their food. Hence, the UAE is looking at innovation trends to bolster the domestic sector. However, if Abu Dhabi manages to be among the most food secure countries in the world, it will be because of its significant investments made on more fertile grounds, still maintaining control on supplies. Unsurprisingly, these grounds are found along the Nile, as Abu Dhabi expanded its reach into the soil of all three GERD’s dispute countries. In Sudan, UAE-controlled farms are scattered over Khartoum, Jazeera, and the Nile itself, accounting for an area of over 2800 km2, making it the largest GCC state investor in the country’s farmland. Any impact on these farms because of the drop of water levels in the Nile in Sudan will also hamper the UAE’s investments in the country’s agriculture sector.
Large new investments in this sector made by the Emirates towards Sudan take place both through government funding as well as private ones, with an injection of $225 million by Emirati private investors for agricultural-related projects. Given that the same dynamics are found for the soils of Ethiopia and Egypt, Abu Dhabi’s stakes in the GERD are evident, as access to water is a key resource for farms throughout the Nile. The central position that farms’ investments in the area holds in the Emirates’ plans was already shown during the failed mediation over the border dispute between Sudan and Ethiopia, when Abu Dhabi proposed a tripartite division of the contended al-Fashaqa land. The initiative, rejected by the other two parties, included the allocation of 25 percent of the land to Sudanese farmers, 25 percent to Ethiopian farmers, and the remaining 50 percent to be leased to an Emirati agricultural company for 99 years.
The major economic investments in Ethiopia, Sudan, and Egypt explain why the UAE is trying to reach a satisfying outcome for the conflict involving these three countries. However, Abiy’s rigid stance over the AU’s sole involvement in the GERD talks is the major obstacle to the Emirates successful diplomatic activity. Should the conflict escalate to a military one, the UAE’s investments across the Nile countries will suffer great damages, and the monarchy’s ties in the region will become problematic. Because the stakes in the GERD are high for the UAE as well, Abu Dhabi will look to use its unique neutral position among the conflicting countries to balance the ties and overcome the conflict. Moreover, the UAE certainly recognizes the benefits, in terms of influence, that a successful mediation would bring to its position in the Horn of Africa, with respect to other GCC countries.
Luciano Hultberg is a Research Assistant Intern at the Gulf International Forum. Luciano is an MSc Candidate at Bocconi University in Economics and Management of Government and International Organizations, in a Double Degree Program with Institut d’études politiques de Paris (Sciences Po) in International Development. His research interests include GCC and African regional geopolitics and affairs, and international relations and mediation.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.