• Saudi Arabia and the UAE share very similar priorities, with economic growth and diversification at the forefront of their ‘Vision 2030’ agendas.
• The dynamic relationship between MBS and MBZ has transformed from a protégé-mentor bond, to a close strategic alliance, to an economic rivalry.
• Saudi-UAE economic competition is aggravated by diverging geopolitical interests, with the two leaders having different threat perceptions.

Why are MBS and MBZ frenemies?

Answer: the significant overlap between the interests and  economic realities of MBS and MBZ creates as many opportunities for cooperation  as it does for competition.

Saudi Arabia and the United Arab Emirates have a lot in common. Geographically, both Middle Eastern powerhouses share the Arabian Peninsula, and access to the resource-rich Persian Gulf; economically, both are among the world’s largest oil exporters, and largely reliant on this source of revenue; politically, both are absolute monarchies, and their crown princes fulfil the role of de facto ruler. However, they are also set apart by some drastic differences, particularly regarding their demographics. Saudi Arabia, which is 26 times bigger than the UAE has a population that exceeds 34 million and is about 38% foreign-born, while the UAE’s population is just under 10 million, of which nearly 88% are immigrants.

This complex Venn diagram is also present in the strategic alignments of the states’ two leaders, Mohammed bin Salman (MBS) and Mohammed bin Zayed (MBZ). Both crown princes are ambitious in their common regional vision, assertive in their foreign policy, highly driven by national interest, and concerned with the survival of their families in power. Moreover, they are both portrayed as pioneers in liberalising a region that remains largely influenced by religious conservatism. For MBS, this is due to his recent domestic reforms, which include allowing women to drive and opening entertainment spaces for the first time in Saudi Arabia. For MBZ, this reputation comes as a result of over a decade’s efforts in modernising and globalising the Emirates, through political reform, economic development, and soft power diplomacy.

With this range of similarities, it would be natural to expect a harmonious partnership between two close allies. This is true—politically, MBS and MBZ see eye to eye on most regional issues, and enjoy a close personal relationship. On the other hand, such an overlap of national priorities and challenges can lead to conflicts of interest. This is also true—economically, Saudi Arabia and the UAE share diversification away from oil as a key priority, and are ultimately aiming to develop the same industries and to attract the same investors. The most glaring example of this is their parallel designs of a ‘Vision 2030’, a name that entitles both the Saudi Vision 2030 national strategy and the UAE’s Abu Dhabi Economic Vision 2030.

It is not common for Riyadh or Abu Dhabi to openly voice their disagreements or grievances against each other. However, their economic rivalry has grown to the point of becoming public. Thus, despite having gone through phases of strong camaraderie and even romance in the past, the relationship between MBS and MBZ is now one of frenemies, and likely to remain that way.

What does MBS want?

Answer: MBS wants to secure Saudi Arabia’s geopolitical position as the regional hegemon, and his own personal position as its all-powerful leader. 

MBS has big plans for Saudi Arabia. It is under his leadership that the Kingdom has made serious strides towards sustainable growth and development—or at least shaped its ‘Vision’ for the future around this concept. At the heart of the reforms agenda pushed by MBS is the idea that, in the long run, Saudi Arabia cannot strive for regional hegemony if it retains its current political-economic structure.

The state’s central challenge is over-reliance on oil production and its exports, with a series of deep structural faults in its fiscal policy and labour market also directly tied to this. Vision 2030 and its adjacent Vision Realization Programmes are designed to address the different aspects of transitioning to a non-oil economy, targeting sectors such as energy, tourism, financial services, logistics, and technology. Overarchingly, the aim is to increase the size and role of the private sector within the Saudi economy and to boost FDI. The framework was launched in 2016; however, the dual shock of COVID-19 and a global fall in oil prices throughout 2020 heightened the sense of urgency around diversification. 

Nonetheless, despite the Vision’s wide scope and innovative character, MBS is playing catch-up, while Saudi Arabia’s Gulf neighbours have been pursuing similar diversification strategies for years. In fact, the focus on transforming Riyadh into the region’s point of reference for business, finance, and logistics is clearly inspired by the successful Dubai or MBZ model. This “race to secure a reputation as the region’s main business hub” is a core aspect of the Saudi-UAE economic rivalry—pushing their leaders to become frenemies—and one that transcends into the ‘balance of power’ realm.

The ambitious economic strategy promoted by MBS is deeply linked to the leader’s personal and political goals. His campaign to consolidate power at home—pursued by cracking down on possible challengers, ranging from political and religious opponents to senior royals—needs a foundation of economic prosperity and a strong social contract to succeed. Moreover, Saudi Arabia’s pursuit of regional hegemony against Iran, which informs much of MBS’ foreign policy, is also a factor in his economic power projection. The chosen location for NEOM—a stone’s throw away from Jordan, Egypt, and Israel—is testament to the leader’s strategic geopolitical thinking.

What does MBZ want?

Answer: MBZ wants to eliminate any threat to his nation’s stability and prosperity, from the influence of political Islam to economic hurdles.

Although MBZ, as an individual, has not received as much press as his Saudi counterpart, the consensus among regional experts is that the Emirati leader is the more powerful and influential of the two. In fact, MBS largely owes his current position to MBZ, who is 24 years his senior, and has served as a long-time mentor and role model for the young Saudi prince. When it comes to their relationship, in both its personal and political dimensions, MBZ has so far been very much “in the driver’s seat.”

This context is essential to understanding the dynamics of the Riyadh-Abu Dhabi strategic alliance.  The alliance was born in the aftermath of the 2011 Arab Spring uprisings, “rooted in a shared interest in ensuring domestic stability and regime survival,” two factors which are top concerns for both the House of Saud and the Nahyan family in Abu Dhabi. Namely, both leaders sought to undermine the threats of political Islam (i.e. the Muslim Brotherhood, MBZ’s main antagonist) and disruptive forces (i.e. Iran, MBS’ archenemy). Since then, defining episodes in the alliance have included their coalition in Yemen since 2015—officially described as “Saudi-led”—as well as their joint blockade on Qatar in 2017.

However, even these high points reveal that the MBS-MBZ bond is more of a marriage of convenience than a true romance. In 2019, the UAE started withdrawing its troops from the conflict in Yemen, which has become a seemingly-interminable war and the world’s worst humanitarian crisis. Having fought off most violent extremist groups in the vicinity of their border, it was in the Emirates’ best interest to switch to indirect engagement, rather than continuing to directly support Saudi Arabia in its proxy war with Iran. In early 2021, Saudi Arabia ended the embargo on Qatar by signing the Al-Ula Statement, intended to reunite the GCC politically and economically. The UAE, whose threat perception is centred in the Islamist groups that Qatar supports, reluctantly signed it too out of pressure.

What is MBZ doing?

Answer: MBZ is maintaining the UAE in its position as a global economic power, expanding its FDI opportunities (e.g. with Israel), and pursuing a more assertive foreign policy.

As MBS has progressively become a frenemy to MBZ, the latter has realised that Riyadh-Abu Dhabi ties may be too close for comfort, and acted accordingly. Going back to the economic front—the main source of rivalry—targeted reforms have been adopted to keep the UAE competitive against a rapidly-changing Saudi Arabia, especially regarding FDI attractiveness. These include new revised laws around divorce, inheritance, and child custody, providing a more “flexible and advanced judicial mechanism” for the UAE’s non-Muslim residents, and the unprecedented opening of a path to citizenship for foreigners, which comprise over ⅘ of the country’s population. In foreign policy, the same trend applies; MBZ’s normalisation of relations with Israel shows the leader’s eagerness to diversify the UAE’s portfolio of potential investors.

MBZ has also been pushing the UAE to a more assertive position on the global stage. This rose to the world’s attention after the clash at a July 2021 OPEC+ meeting, where Abu Dhabi’s discontent with Riyadh’s proposed boost to oil output held off the discussion for over two weeks, pressuring the latter to meet in the middle by agreeing to a higher baseline for the UAE’s benefit. 

Who is winning and what about you?

Answer: MBZ is currently two steps ahead of MBS, but the playing field is bound to change.

The bottom line is that, for both Saudi Arabia and the UAE, the way forward is through economic transformation, and their plans in this respect are based on very similar blueprints. What this tells us is that, regarding this rivalry alone, there is a possibility for both sides to win by boosting the Gulf’s economy as a whole. Cooperation for development, healthy competition, and an overall attraction of foreign investment to the region would be conducive to the economic interests of both MBS and MBZ: growth and diversification.

However, the important role of strategic geopolitical interests—power for MBS, prosperous stability for MBZ—overshadows this scenario, and a prognosis of cooperation would be mere wishful thinking. All things considered, MBZ remains the more experienced, level-headed, and well-connected of the two Gulf princes. With an upper hand in the relationship and two steps ahead in globalising his country, the Emirati prince is winning. What is more, the UAE made it to 15th place in the 2021 Kearney FDI Confidence Index (+4 from 2020) as the only MENA economy to feature in the global top 25; Saudi Arabia did not share the honour.