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UAE economic diplomacy undeterred in times of conflict
Despite regional tensions and the more than 2,000 Iranian missiles and drones targeting the Emirates, the government has demonstrated its ability to maintain full institutional stability
- PUBLISHED: Mon 6 Apr 2026, 5:08 PM
- By:
- Damyana Bakardzhieva
The UAE’s economic diplomacy is characterised by trade openness, a favourable business environment that attracts foreign investment, sovereign wealth funds diversifying investments domestically and abroad, untied humanitarian aid, and an ever-expanding network of Comprehensive Economic Partnership Agreements. While the ongoing war in the Gulf region could have justified postponing such efforts, the UAE authorities continue to pursue this track of Emirati foreign policy as assiduously as before.
On March 1, just a day after Israel and the United States launched attacks on Iran, followed by Iranian retaliation targeting Gulf countries, Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, announced strategic deals worth $3 billion during his official visit to Ecuador.
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Undeterred by the war unfolding in the UAE’s immediate neighbourhood, Sheikh Khaled oversaw the successful conclusion of cooperation negotiations between the UAE Ministry of Investment and the Ecuadorian Ministry of Production, Foreign Trade, Investments and Fisheries, as well as between EDGE group and the Ministry of Defence in Quito. He then formally announced, alongside President Daniel Noboa, the Comprehensive Economic Partnership Agreement between the two countries. This marks the fourth Cepa between the UAE and a Latin American economy, following agreements with Colombia, Costa Rica and Chile. The UAE is a key trading partner for Ecuador in the Arab region and Africa, with non-oil trade between the two nations reaching approximately $373.6 million in 2025. The Cepa is expected to further accelerate trade growth and deepen bilateral collaboration in mining, logistics, advanced technology, agriculture and renewable energy.
Just a few days later, on March 5, Dr Sultan bin Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Special Envoy to Japan, and Dr Thani bin Ahmed Al Zeyoudi, Minister of Foreign Trade, met with Japan’s Minister of Foreign Affairs, Toshimitsu Motegi, to formalise the conclusion of another Cepa negotiation, bringing the total number to over 30. The UAE is Japan’s primary trading partner across the Middle East and Africa, with $20.3 billion in non-oil trade in 2025 accounting for nearly 40 per cent of Japan’s total trade volume with those two regions.
The UAE sovereign wealth funds also remained remarkably bullish, continuing to announce outward investments. On 8 March, Mubadala announced that it is coinvesting nearly $4 billion in European savings and retirement company Athora Holding. Throughout March, Adia committed to a partnership with the Hong Kong-based investment company Dignari Capital Partners, committed $220 million together with Visa and the Qatar Investment Authority for the initial public offering of Japan’s PayPay Corportation, and agreed to launch a new fund with Christofferson Robb & Company, a New York-based private credit manager.
On March 8, the UAE celebrated Zayed Humanitarian Day with major initiatives during Ramadan, including the “11.5” campaign aimed at saving five million children from hunger. The Ramadan programmes organised by the Emirates Red Crescent are estimated to have benefitted over 1.5 million people within the UAE and across 44 countries. The UAE also remains the largest donor to Gaza for the third consecutive year, contributing nearly half of total international aid. Its contributions exceed US$4.2 billion, with $1.2 billion pledged this February. A further $500 million has recently been committed to addressing urgent humanitarian needs in Sudan.
Despite regional tensions and the more than 2,000 Iranian missiles and drones targeting the Emirates, the government has demonstrated its ability to maintain full institutional stability. This remains a crucial element of the country’s investment appeal. All free zone authorities, along with Dubai’s Departments of Economy and Tourism and Abu Dhabi’s Department of Economic Development, reported uninterrupted digital processing of new business licenses. The Dubai Land Department recorded 3,570 property sales worth Dh11.93 billion during the week of 2 to 9 March, followed by a 51 per cent increase in transaction value and a 58 per cent rise in deal numbers the following week.
The banking sector has continued full operations without restrictions on cross-border transfers. Temporary technical disruptions in online banking across several financial institutions were reported on March 2 following a fire at an Amazon Web Services (AWS) data centre in the UAE. However, a similar AWS outage in October 2025 caused comparable issues, indicating that such incidents are not exclusively related to the current conflict. Financial stability was further reinforced on 16 March, when the Central Bank of the UAE implemented a proactive five-pillar Financial Institution Resilience Package backed by its Dh1 trillion in assets.
The resilience of the UAE economy to external shocks is not only a statement by the Minister of Economy and Tourism, Abdulla Bin Touq Al Marri, but is also reflected in independent assessments. On 6 March, S&P Global reaffirmed the UAE’s sovereign credit rating at AA/A-1+ with a stable outlook. The country’s substantial fiscal buffers and policy flexibility underpin both its long-term and short-term debt in foreign and local currency, offering a strong signal of confidence to international investors.
Tourism, travel and logistics have inevitably faced disruption. This is not unprecedented, as similar challenges arose during the Covid-19 pandemic. At that time, the UAE demonstrated that it possesses the tools, policies and experience to manage such temporary setbacks effectively. The UAE will do so again, rebounding with renewed strength while continuing to rely on its economic diplomacy to advance a strategy of sustained global openness and engagement.
The writer is Senior Research Fellow at Anwar Gargash Diplomatic Academy.