There is still time for Saudi Arabia to accomplish many of Vision 2030’s foreign investment objectives, but the window of opportunity is closing quickly.
The United Arab Emirates, especially the emirates of Abu Dhabi and Dubai, has thrived largely due to its well-established reputation as a business hub, tourist destination, and safe environment. However, while Emirati leaders have honed an effective strategy to make the country an important destination for global commerce and investment, the same conditions that have enabled steady economic growth also provide legislative loopholes and opportunities for criminal and illicit activities.
Thanks to the growing professionalization of their police forces and the widespread use of high-tech surveillance systems, Abu Dhabi and Dubai traditionally rank at the top of international security rankings. As violent and property offenses have gradually decreased over the decades, the UAE’s main concerns have shifted toward the prevention of particular types of crimes – such as drug trafficking, money laundering, terrorism financing, and cybercrimes – perceived as greater risks to the country’s economic development and international reputation. With Expo 2020 Dubai expected to welcome millions of visitors and the UAE government announcing new economic initiatives to attract foreign investments, the pressure to counter these crimes is bound to increase. In the eyes of officials in the UAE, ensuring an attractive business environment is a fundamental priority to boost the country’s economic recovery after the coronavirus pandemic.
The UAE’s interest in conveying that it is taking these crimes more seriously is apparent in the Mutual Evaluation Report released by the Financial Action Task Force, a global illicit financial flows monitor, and its counterpart in the Middle East and North Africa region, the MENAFATF, in April 2020. The watchdog agencies recognized that the UAE has put major improvements in place to fight money laundering and terrorism financing through the introduction of new laws and regulations and the establishment of specific committees to strengthen national cooperation. The joint reports particularly highlighted the financial intelligence unit’s effectiveness in detecting and preventing terrorist networks from abusing the UAE financial system to carry out illegal activities.
The UAE’s push in this direction is reinforced by its moves to join forces with China as well as the United Kingdom to counter illicit financial flows. In August, the UAE and Chinese financial intelligence task forces teamed up to enhance information exchange on financial transactions allegedly connected to money laundering and terrorist financing activities. A similar agreement followed between the UAE and U.K. on September 17, launching the “Partnership To Tackle Illicit Financial Flows.”
Beyond the Indexes: Measuring Safety
Stability and safety are a lifeline for an economy hungry for investment and increased capital inflow. Thus, establishing both has been integral to the Emirati economic model, and Abu Dhabi and Dubai record good performances in terms of urban safety. From 2015 to 2019, the UAE’s cities frequently obtained high rankings, oscillating between the 25th and 28th spots, in the Safe Cities Index, the Economist’s benchmark analyzing indicators covering digital, health, infrastructure, and personal security in 60 cities. However, this good track record experienced a dip in 2021, as the newly introduced indicator on environmental security lowered the ratings of Abu Dhabi and Dubai, which were ranked 31st and 35th, respectively. Regarding health security, specifically, the two Emirati cities better positioned themselves by ranking 12th and 13th, respectively.
While there is a lack of statistics at the federal level, data from the Dubai Police on major crimes – ranging from violence against individuals, such as willful murder and aggravated assault, to victimless offenses, such as theft and drug abuse – showed a decline in the total number of crimes per hundred thousand people in the emirate from 58.6 in 2013 to 35.5 in 2019. Other big cities, such as New York City, experienced a similar trend with a decline of 8.8% in reported violent and property crimes between 2013 and 2020, according to the Division of Criminal Justice Services.
Further, in the UAE, media coverage of crimes is partial and mostly limited to events publicly disclosed by the authorities or epic heists that capture the headlines. UAE journalism is also regulated by the National Media Council. These factors have led to a media atmosphere that tends to reinforce the narrative of the UAE as a crime-free environment.
The UAE’s national branding strategy has developed parallel to the growing professionalization of the UAE’s police forces. Besides the traditional policing toolkit, Abu Dhabi incorporates “soft policing” methods, which help to promote a positive image of the police among its citizens and residents. While growing digitalization is the common thread linking police reforms across the UAE, Dubai is at the forefront of artificial intelligence capabilities. In 2017, Dubai inaugurated the first totally automated smart police station in the world, and currently there are 11 smart stations in the emirate. The Dubai Police offer various digital services, including smart patrols, memory or brain fingerprinting, and automated registration by radars.
The widespread diffusion of advanced technological solutions and surveillance systems seemingly increase residents’ perception of safety. In a survey conducted by the Institute for Management Development and the Singapore University of Technology and Development for their Smart City Index, over 86% of respondents from Abu Dhabi and nearly 85% from Dubai agreed with the statement that “CCTV cameras made residents feel safer.” In addition to CCTV cameras, security guards are ubiquitous in the UAE, both in public and private buildings and facilities. The guards are meant to convey a sense of safety, deter potential crime, and report suspicious activity.
However, as technological advancement has dramatically increased in the UAE, reaching 99% internet penetration in 2019, so have voices questioning the actual security of a hyper-surveillance society and emphasizing the risk of communication technology turning into a tool of repression. As the 2020 Freedom House report “Freedom on the Net” pointed out, the online environment suffers from considerable restrictions related to content and access to a number of websites. Additionally, the UAE government’s use of surveillance systems – including the Israeli firm NSO Group’s Pegasus spyware, targeting especially exiled dissidents – stirs concern among the Western public.
Drug Trafficking in the UAE: Supply and Demand Problems Resistant to Solution
While most crimes have declined over recent years, according to the Dubai Police, transgressions related to drugs have remained almost unchanged, despite a zero-tolerance policy that was passed over 25 years ago. There are both supply and demand reasons that the UAE government has not been able to reduce drug-related crimes.
The growth of Dubai, particularly, as a business hub and tourist destination with multiple entry points has made it attractive to drug traffickers. The Dubai International Airport managed 86.4 million passengers, and the city of Dubai hosted more than 16.7 million overnight visitors in 2019. In 2020, despite the coronavirus pandemic, the Dubai-based DP World, one of the world’s largest port terminal operators, handled over 71 million 20-foot equivalent units of cargo. Authorities face a serious challenge inspecting shipping containers, cargo aircraft, and travelers for narcotics. “Traffickers use the modern and accessible facilities in the emirate, such as the airports and ports, trying to move narcotics from their home countries to their destinations,” Maj. Gen. Abdul Jalil Mahdi said in 2010, when he was director of the Dubai Police’s anti-narcotics department.
Further, Dubai authorities are concerned over growing drug use among nationals. However, the use of hard drugs, notably heroin but also over-the-counter prescription medication, has dramatically increased among young Emirati citizens since the 1980s. According to Philip Robins, a professor at St Antony’s College in Oxford, this rise is linked to several factors, including the influence of expatriates on local culture and the rapid increase in wealth among Emiratis in the wake of the oil boom.
Emirati authorities have taken significant actions to curb drug use, as well as to address supply and demand issues. The UAE adopted a zero-tolerance policy for recreational drug use, and punishments for drug smuggling under the 1995 Federal Law No. 14 include fines of several thousand dollars, long-term jail sentences, and even capital punishment in extreme cases. The legislation, however, offers plenty of room for discretion and has led to a two-tier system of justice whereby expatriates and tourists generally receive more severe sentences than nationals.
On the demand side, the UAE was slower in dealing with drug addiction. Though the 1995 law encouraged substance abusers to volunteer for treatment by declaring that “no criminal proceedings shall be instituted against any abuser of narcotic drugs or psychotropic substances who voluntarily presents himself … to the Addiction Treatment Unit,” it took seven more years for the country to establish its first facility specializing in treating substance abuse, Abu Dhabi’s National Rehabilitation Center. Since its inauguration, the center has helped 4,805 patients and made considerable advances in research, human capacity building, policy and legislative development, and advocacy. Nonetheless, there are few independent rehabilitation facilities in the UAE, so many of those in need seek help from overseas luxury rehabilitation resorts.
Drug abuse remains a serious cause of concern for Emirati authorities. Saif bin Zayed al-Nahyan, deputy prime minister and minister of interior, cited government statistics that showed 6.1 out of every million people died from drug abuse in the UAE in 2015, an increase of 35% in just two years, although still a relatively low number compared to similar statistics for Western countries. The European Monitoring Centre for Drugs and Drug Addiction, the European Union agency tracking illicit drugs, revealed that drug overdoses caused the deaths of 61.8 out of every million people in 2018, with the U.K. and Germany with the most victims. A 2012-15 study conducted by the Emirati National Rehabilitation Center pointed out that the cost of drug addiction – a combination of medical treatment plus the socioeconomic costs of the loss of individuals’ participation in society while undergoing treatment – amounted to $1.5 billion per year.
Fortunately, encouraging signs are on the horizon. According to data revealed by the Arab Youth Survey 2019, only about one in three Gulf youth thought that drug use was on the rise, compared to the majority of youth in North Africa and the Levant who felt there was an increase. The social stigma around rehabilitation centers is also waning; in a study of 100 UAE citizens and residents about their attitudes toward drug addiction centers, only 14% of the respondents voiced disapproval of such facilities.
Nothing is Free, Including Free Trade Zones
The key to this complex network of illicit financial flows lies in the special status enjoyed by the free trade zones. The UAE has established more than 30 of these business hubs, which have their own commercial regulations and legal jurisdictions and are exempt from both federal and local law. During the last decade, the Emirati leadership has become more aware of the inherent risks associated with financial opacity and lack of adherence to international standards; the more the country is known as a safe haven for questionable activity, the more damage is done to its reputation as a destination for legitimate investment.
Dubai’s economic model requires constant injections of money, so the emirate takes seriously the risk of losing such investment. In 2018, building on the standards and guidelines of the 40 FATF Recommendations, the UAE authorities introduced a new anti-money laundering and counterterrorism finance law. Though the law applied stricter regulations and recognized the growing risk posed by Designated Non-Financial Businesses and Professions by extending compliance with the legislative framework to these categories, it fell short with regard to free trade zones. The risk of criminal networks concealing the ultimate beneficiary of a particular business establishment via hidden complex structures and the use of strawmen remain high, according to the findings of the report. Preserving a veil of secrecy that in effect obscures many illicit financial affairs committed in the country seems inconsistent with the hard-line approach the country has used to punish other offenses such as cybercrime.
Policing 2.0: The Rise of Cybercrime
Though computer-related misconduct is still an emerging phenomenon, the authorities are taking it very seriously as it poses a threat to the UAE’s goal of becoming a smarter, more technology-dependent, globally connected, and digitalized country. The Abu Dhabi police investigated 774 cybercrimes in 2017, and a year later UAE President Khalifa bin Zayed al-Nahyan announced stiff penalties for cyber offenders, including jail terms of up to 25 years and fines of up to $1 million. According to provisions in federal statutes, “Emirati citizens found guilty of crimes committed through electronic means against the security, reputation, and prestige of the state, the ruling system, and national unity may incur the deprivation of their nationality.” This specific category of offenses carries the stiffest penalties in the penal code, an indication that rulers consider them highly concerning.
Reining in Crime
The UAE’s introduction of stricter regulations and the growing professionalization of its police forces represent progress in ensuring a more assertive fight against criminal activity. However, increasing globalization, which is contributing to the economic growth of Abu Dhabi and Dubai, at the same time is likely to increase the occurrence of illicit activities. International coverage of notorious international criminals hiding out in Dubai for many years before being apprehended may also harm the image of the country.
The UAE seems to be focused on addressing these challenges. In November 2020 Abu Dhabi instituted a specialized court exclusively dedicated to fighting money laundering and other financial crime; Dubai followed suit in August. Such confidence-building measures can reassure the private sector and signal that the Emirati leadership has the political will necessary to ensure a more regulated and transparent commercial climate.
is a senior fellow at TRENDS Research & Advisory in Abu Dhabi, where he is the director of the International Security & Terrorism Program. He is also an advisor at Gulf State Analytics, a Washington-based geopolitical risk consultancy.
is a visiting researcher at Trends Research & Advisory in Abu Dhabi and a research assistant at Gulf States Analytics.
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