UAE’s Hedging Policy Towards Iran

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The key problem of the given memo can be identified as a long-standing hedging approach of the UAE towards Iran. The country alternated between soft balancing and hard balancing (El-Dessouki and Mansour 2020). Here, the main objectives revolve around making a clear and direct decision in regards to selecting an only option and adhering to it for long-term benefits. UAE’s position towards Iran always sought to reap some form of economic benefits but also comply with the strategic hostility of its foreign allies, such as the United States or Saudi Arabia. The general approach of hedging was based primarily on the balancing between the stated approaches.

However, the problem lies in the fact that UAE needs to pick a strong stance, which is either against, for, or neutral, in regards to Iran. Therefore, the issue is a non-adherence to the most resultative approach, which is long-term strategic hedging with Iran. Having such a long-term stance will ensure that UAE can be a reliable and strongly positioned nation in the Middle East, which can have longitudinal international relations with its key economic and strategic allies. The frequent changes between soft and hard balancing in recent decades have somewhat damaged the rigidness of the UAE’s position. The main reason for the UAE to beware of Iran lies in the military capability of the latter, which threatens the overall security of the Gulf Cooperation Council or GCC (El-Dessouki 2018). Therefore, the memo addresses the key policy options of the UAE regarding Iran with an emphasis on the economic impact.


UAE’s policy towards Iran since its earliest years and even its foundation in 1971 has gone through a series of gradual changes. The hedging approach was one of the first iterations of the foreign policy measures adopted by the UAE regarding its controversial neighbor. It is stated that in the initial stages of the nation’s development, the main emphasis was put on the concept of quiet diplomacy of soft balancing (BMI 2015). In other words, the UAE was economically and politically fragile, which meant that it needed to rely on various foreign aid programs to jump-start its economy.

However, the soft balancing was quickly replaced by the strategic hedging efforts, which meant that the UAE was able to properly mix its measures of cooperation and confrontation regarding Iran. Such an approach proved to be a highly useful technique, where the country was not fully neutral but was not engaged in open conflicts and was available to all parties as a source for cooperative measures (Koga 2018). Some experts argue that hedging is one of the key reasons for the UAE becoming a successful and well-established nation because this strategy is more useful than soft and hard balancing (El-Dessouki and Mansour 2020). In other words, hedging was an influential factor in the UAE’s relationship with Iran.

In recent decades, UAE shifted from hedging to hard balancing, which was driven by several factors. One of the key reasons lies in the fact that UAE’s huge oil reserves allowed it to significantly boost its military spending. From 2000 to 2010, the nation made major purchases for various missile defense systems, such as PAC-3, which were possible due to cooperative measures with its western allies (Katzman 2019). It was also followed by various agreements signed by the United States and UAE, which included certain measures against Iran (Ibish 2017). Therefore, the root cause can be found in the inconsistency of the nation in its stance regarding its neighbor, which might have improved its development up to this point, but can severely damage it in the long term. It is important for policymakers to properly weigh out the options and adhere to the choice in an unaltered and rigid manner.

Option 1

The first option is based on soft balancing, where UAE returned to its brief initial phase when quiet diplomacy was the only solution in such a politically tense environment. The given approach allowed to jump-start the UAE’s economy and political development, which was quickly replaced by hedging. It utilizes non-confrontational measures, such as instruments of diplomacy, and the economic tools revolve around blind neutrality, where Iran is treated as all other nations. The pros of soft balancing are that it does not lead to open confrontations with Iran and its foes, such as the US or Saudi Arabia. However, the main disadvantage is the lack of sustainability, where any major event involving the UAE will force it to abandon the strategy. In addition, it resembles a willful ignorance of military advancements of other parties, which also poses a security risk.

Option 2

The second option revolves around the hedging approach, which was actively used during the development of the UAE. It replaced soft balancing because it allows a strategic mix of confrontation and cooperation. It utilizes various instruments of power, such as powerful allies and internal military strength as well as diplomacy, and thus, economic tools are tariff and trade deals. The main advantage of the given measure is its high degree of flexibility, where the UAE can reap the benefits of economic and political cooperation with Iran but still preserve agreements with western allies. The disadvantage is manifested in the fact that it requires a strong strategic leveraging of allies, which can become unstable.

Option 3

The third option is centered around the idea of hard balancing, which is what the UAE is currently using. This approach assumes that the country will double down in its efforts to side with Saudi Arabia and the United States, and thus, become fully confrontational with Iran. The economic tools are sanctions and penalties as well as trade restrictions. The pros of such a selection are stronger ties with its western allies and Saudi Arabia as well as a strong regional presence. The disadvantage lies in the notion of a high need for military development and full engagement in the arms race. In other words, the UAE will have to be ready to be involved in confrontational actions, even if they occur between Iran and its allies without the country’s impact.


In conclusion, UAE’s foreign policy regarding Iran can take three main forms, which are soft balancing, strategic hedging, and hard balancing. Each of these approaches provides a wide range of benefits as well as ramifications. The former heavily relies on diplomacy and is unsustainable, whereas the second option requires strategic thinking, and the latter is highly confrontational, which makes UAE militantly aggressive. The most plausible option is hedging, which is why the UAE needs to revert from the contemporary hard balancing approach. With current economic and military strength, it will be easier to hedge than previously. It also provides sustainable neutrality, which is achieved by mixing both confrontation and cooperation-based approaches, and thus, it allows UAE to benefit from Iran and retain its allies in the West.


BMI. 2015. “Political Risk Analysis – The End of Soft Diplomacy.” BMIResearch. Web.

El-Dessouki, Ayman, and Ola Rafik Mansour. 2020. “Small States and Strategic Hedging: The United Arab Emirates’ Policy Towards Iran.” Review of Economics and Political Science 1: 1-14. Web.

El-Dessouki, Ayman. 2018. “The Internal and External Roles of Iraqi Popular Mobilization Forces.” African Journal of Political Science and International Relations 11 (10): 274-283. Web.

Ibish, Hussein. 2017. “The UAE’s Evolving National Security Strategy.” Web.

Katzman, Kenneth. 2019. “The United Arab Emirates (UAE): Issues for US policy.” Congressional Research Service. Web.

Koga, Kei. 2018. “The Concept of “Hedging” Revisited: The Case of Japan’s Foreign Policy Strategy in East Asia’s Power Shift.” International Studies Review 20 (3): 633-660. Web.

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DemoEssays. 2023. "UAE’s Hedging Policy Towards Iran." January 4, 2023.

1. DemoEssays. "UAE’s Hedging Policy Towards Iran." January 4, 2023.


DemoEssays. "UAE’s Hedging Policy Towards Iran." January 4, 2023.