As per three sources, Abu Dhabi has changed its policy to use the sovereign fund ADQ to make investments all across the region as part of an effort to forge regional alliances with Turkey, Israel, and Egypt through economic diplomacy.
After years in which Abu Dhabi, the wealthiest province in the United Arab Emirates federation, seemed to favour more tricky, even militarised, means to achieve dominance in the Middle East and North Africa, the change signals increased use of soft power.
The tiniest of Abu Dhabi’s three primary sovereign wealth funds, ADQ, started as a holding company for state assets in 2018.
But since then, it has grown internationally. From January 1 to October 1 of this year, ADQ, which Global SWF estimates to oversee $108 billion of assets, queued up 25 investments totalling around $6.6 billion, placing it among the Middle East’s most active dealmakers.
The area is of primary concern. Under the condition of anonymity, one of the three individuals told Reuters that they wanted to develop close political connections with these nations.
Requests for comment sent via email to ADQ as well as the UAE foreign ministry were not answered.
As it tried in recent years to curb Iran’s expanding influence in the region and oppose the rise of radical Islamist movements, Abu Dhabi had embraced an aggressive foreign policy.
However, the UAE’s military adventurism, which saw it join an Arab embargo of Qatar and get involved in crises from Yemen to Libya, provided little benefit and strained relations with Western partners.
In describing its foreign strategy, Emirati authorities have stated that the UAE is currently concentrating on creating economic bridges.
In 2020, Abu Dhabi established links with Israel while negotiating with Iran to ease tensions and attempting to patch things up with Qatar and Turkey after years of hostility over Islamism.
Among the most recent agreements, ADQ and Turkey’s wealth fund formed a $300 million technological fund in March to spend on venture capital investments and business possibilities within Turkey.
It has invested in Egypt, a country that supports the UAE, and other Arab nations like Syria, which is still subject to strict Western sanctions, and Iraq are on its financial radar, according to two sources. Additionally, it has agreements with Israel.
An Emirati political counselor named Abdulkhaleq Abdulla contended saying the UAE is currently employing its humongous financial and economic power to reach the same goal as it had accomplished with “physical power.” This ideal, as per Abdulla, is to move UAE national objectives while advancing the UAE’s notion of a relaxed and durable Middle East.
He claimed that ADQ was working similarly to Mubadala, another of the emirate’s sovereign institutions and that both had both a political and an investment wing.
They are the ones that advertise UAE economic diplomacy and its impact in the region and around the world, he claimed.
While Mubadala utilises a similar strategy and invests globally, including domestically and regionally, ADQ primarily concentrates on title winners and the area. Mubadala’s portfolio is biased toward the U.S. and Europe.
People familiar with the company said ADQ maintains that its purpose is purely commercial, even though its chairman, Sheikh Tahnoon bin Zayed al-Nahyan, is also the UAE’s national security adviser and a well-known businessman. He also served as his half-brother MbZ’s go-to man for foreign policy issues.
One who knows ADQ’s tactics stated Sheikh Tahnoon prefers to keep his positions distinct even though he often attends board meetings.
Tahnoon is a tactical realist. Or so is said about him by Andreas Krieg, an associate professor at the King’s College in London; he also added that he (Tahnoon) has incredibly strong external networks that are essential for Emirati statecraft.