Tensions Between the UAE and Saudi Arabia: A Growing Concern for Businesses
In recent weeks, executives in the United Arab Emirates are increasingly anxious about the implications of rising tensions with Saudi Arabia. Reports indicate that several businesses have faced issues with visa applications to the kingdom, causing disruptions to operations and raising concerns within the business community.
Strained Relations and Visa Rejections
The friction between these neighboring nations became evident in December when Saudi Arabia accused the UAE of supporting a Yemeni separatist faction that posed a direct threat to Saudi-led forces. Since then, employees across various sectors—including banking, law, and oil services—have reported difficulties in obtaining Saudi visas while based in the UAE. Six different sources, all representing affected companies, confirmed that their visa requests have been declined without clear explanations from Saudi authorities.
“The situation definitely raises concerns,” stated a marine services executive whose team recently had several visit visa applications turned down. “However, the business community has shown resilience and adaptability in navigating these challenges.”
Creative Workarounds in Business Operations
Faced with restrictions, some companies have found alternative solutions to maintain their operations. For instance, certain firms have begun submitting visa applications through branches located in neighboring Gulf nations like Qatar and Bahrain. This strategic move has helped them bypass the current limitations, although not all businesses enjoy the same flexibility.
While one executive expressed hope that the situation would resolve soon, considering the deep-rooted economic ties between the two countries, the ongoing diplomatic tensions continue to loom over cross-border operations.
Insights from Saudi Officials
Despite the rising concerns, a Saudi official responded by asserting that there have been “zero changes” in the visa application process. Meanwhile, conciliatory remarks from Saudi Foreign Minister Prince Faisal bin Farhan suggested an intention to ease tensions between the two countries. He emphasized the critical importance of the UAE in fostering regional stability, stating that maintaining strong ties is paramount for both nations.
Interestingly, reports indicate that the visa situation may have begun to improve recently, offering a glimmer of hope for business continuity.
The Broader Context: Yemen and Regional Dynamics
The depth of the rift becomes clearer when considering the geopolitical context. Saudi Arabia has taken military action against vehicles and weaponry allegedly sent by the UAE to the Yemeni separatists, reinforcing its stance on national security. This military engagement underscores the complexity of the relationship between the two Gulf powerhouses, especially regarding their differing interests in the ongoing Yemeni civil war.
Since both countries intervened in Yemen in 2015, they have often backed competing factions, leading to prolonged conflict and deepening divisions. While tensions have spiraled, experts do not anticipate a repeat of the 2017 Qatar crisis, which saw a bloc of nations led by Saudi Arabia and the UAE impose an economic embargo on Doha.
Trade and Economic Interdependence
A critical factor in this situation is the extensive economic relationship between Saudi Arabia and the UAE, valued at over $20 billion in bilateral trade. Many companies utilize Dubai as a strategic hub for operations within Saudi Arabia, which boasts the largest population in the Gulf region. Despite current tensions, most analysts believe that the close trade ties will mitigate the impacts of the ongoing diplomatic spat.
For instance, a UAE-based banker noted that as their institution prepared for a roadshow in Saudi Arabia, staff members have faced challenges with visa applications. “Other banks are encountering similar difficulties; this isn’t an isolated incident,” he remarked.
Navigating Visa Complexities
To cope with the visa issues, some companies are opting for standard visit visas purchased upon arrival at airports, as this allows executives to meet clients without extensive delays. However, concerns remain about the legality of such actions, leaving businesses in a precarious position as they seek to balance operational needs with regulations.
Additionally, nationals from various countries—including Jordan, Egypt, and India—have reported difficulties in obtaining multiple-entry business visas for Saudi Arabia from the UAE. While these issues have been ongoing for some time, they have reportedly intensified in the last few months, particularly during periods of heightened diplomatic tensions.
Future Implications and Business Sentiments
Saudi Arabia has recently intensified efforts to encourage UAE companies with substantial operations in the kingdom to relocate their staff to Riyadh, which some see as a long-term strategy. Since early 2024, multinationals must establish their regional headquarters there to be eligible for government contracts, prompting firms to reconsider their operational bases.
Despite existing tensions, business leaders remain cautiously optimistic that the recent rifts will not have lasting impacts. Many companies continue to view the mutual benefits of economic collaboration as outweighing the current diplomatic fallout. As the UAE strives for de-escalation, Emirati social media influencers have reportedly been advised to refrain from engaging in negative discourse about Saudi Arabia, underscoring a shared interest in maintaining stability and partnership in the region.
