FACTBOX-Political risks to watch in the United Arab Emirates

Reuters Middle East

DUBAI, Dec 6 (Reuters) - The United Arab Emirates, the Arab

world's second largest economy after Saudi Arabia, has escaped

the serious unrest that has shaken the Arab world but is still

vulnerable to any fallout from tension over Iran's nuclear


Its security services have moved swiftly to stem any sign of

political dissent after last year's Arab Spring protests.

Below are some of the risks facing the UAE:


Chances of protests in the UAE are widely considered lower

than in other Arab states due to the small indigenous population

and huge oil wealth, especially in Dubai and Abu Dhabi. But

Emirati activists have used social media to demand a greater say

in government, legislative powers for the 40-member Federal

National Council (FNC) and less censorship.

The UAE is concerned the rise of the Muslim Brotherhood to

power in Egypt has emboldened its own Islamists. Authorities

have rounded up about 60 men belonging to local Islamist group

Al Islah this year.

What to watch:

- Whether the government will grant the FNC more powers

- Widespread arrests that could trigger local protests

- More moves against Islamist activists


The economy is expected to grow by about 3.5 percent in

2012, according to the economy minister, down from last year but

higher than the 1.4 percent in 2010. In a sign of recovery,

Dubai's ruler announced in November a plan to build a massive

complex that would include 100 hotels, the world's largest

shopping mall and a park larger than London's Hyde Park.

But Dubai is still restructuring billions of dollars of

debts following the 2009 property crash, and its entities are

expected to face nearly $50 billion of liabilities maturing

between 2014 and 2016.

What to watch:

- Will Dubai's government-linked firms be able to make their

debt repayments?

- Will Dubai be able to finance new massive projects?


The UAE has been spared any attack by al Qaeda. But Dubai, a

business and tourism hub that attracts many Westerners, could

make an attractive target for Islamist militants.

In 2009, al Qaeda's Yemeni and Saudi branches merged into a

regional arm. Al Qaeda in the Arabian Peninsula (AQAP) said it

was behind a plot in October 2010 to send two parcel bombs to

the United States. The bombs were intercepted in Britain and


What to watch:

- Any expansion of al Qaeda attacks in the region could put

other Gulf countries, including the UAE, at risk.


The strategic Gulf Arab region could be affected if the

standoff between Iran and Western powers over Tehran's disputed

nuclear programme escalates into an armed conflict.

Dubai has strong trade links with Iran, but the UAE is under

increasing pressure to limit such commercial dealings. The UAE's

extensive purchases of U.S. arms, and facilities it offers to

the U.S. military, could make it a potential target for revenge

if the standoff boils over into war.

What to watch:

- Any signs the Iran nuclear dispute could turn into a

military conflict.

- More sanctions on Iran, a major Dubai trade partner, could

affect a recovering UAE economy.

(Compiled by Mahmoud Habboush; Editing by Pravin Char)

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