Minilateral groups: United Arab Emirates and their role in the geopolitical landscape

Great power competition between the United States and China continues to undermine multilateralism and the rules-based order. Still, the system is not dead yet. Autocratic states increasingly seek to interact with international institutions in ways that violate institutional rules and norms, as well as the broader global rules-based order.

The motivations for doing so are mixed. For some countries, there is likely to be a broad agenda to undermine or disrupt multilateral partnerships and the rules-based order. It is therefore not surprising that minilateral or minimultilateral groupings are formed to face specific economic or geopolitical challenges. To be successful, these groups must focus on specific issues, build consensus, and coordinate the complementary strengths and resources of their members to achieve common goals.

To avoid further fractures in the international arena, Australia, the United States and like-minded countries must find new and effective ways of working with international actors.

While the media, commentators and social media continue to focus on high-profile partnerships such as AUKUS, smaller, more focused and more flexible minilateral groupings are an emerging trend in international relations. AUKUS aims to deliver massive projects over decades, while minilateral agreements enable more direct development in defence, energy and the economy.

The UAE, through its strategic investments and partnerships, exemplifies this modern minilateral moment, particularly in clean energy and critical minerals.

A striking example is the UAE’s Partnership for Accelerating Clean Energy (PACE) with the United States. Launched in November 2022, the PACE initiative will commit $100 billion to developing 100 gigawatts of clean energy generating capacity globally by 2035. While it is a bilateral partnership, PACE’s goals are clearly minilateral: investing in clean energy in emerging economies.

This initiative is a testament to both nations’ commitment to diversifying their energy portfolios and combating climate change. In January 2023, they announced their first wave of investment, committing $20 billion to generate 15 gigawatts of clean energy projects in the United States. While PACE is a bilateral partnership, it is part of the UAE’s broader strategy to expand its renewable energy capacity while maintaining its status as a leading oil producer.

State oil company Abu Dhabi National Oil Company (ADNOC) plans to increase its oil production capacity to 5 million barrels per day by 2030 from 4.85 million barrels per day. This is a practical, dual approach to energy security and economic diversification. Further investment in hydrocarbons is essential to meet global demand and avoid major supply shocks, said Sultan Al Jaber, CEO of ADNOC.

In addition to bilateral agreements such as PACE, the UAE has actively engaged in minilateral groupings such as the I2U2 group. Established in 2022, the group includes the United States, United Arab Emirates, India and Israel and focuses on infrastructure and food security. The I2U2 project aims to leverage private sector capital and expertise to modernize infrastructure, support low-carbon development, and improve public health and food security. Notable projects include the United Arab Emirates’ $2 billion investment in developing integrated food parks in India and a renewable energy project in the state of Gujarat.

The I2U2 group is emblematic of the UAE’s broader strategy to forge diverse partnerships beyond traditional regional alliances such as the Gulf Cooperation Council. This strategy is partly driven by competition with Saudi Arabia for regional economic dominance, although the Israel-Gaza war may have cooled the UAE’s cooperation with Israel.

Despite its strategic investments, the UAE faces several challenges in pursuing minilateral cooperation, including aligning the diverse goals of partner countries, ensuring transparency and accountability, and managing public perception. For example, the UAE’s relationship with the US has been strained due to divergent foreign policy priorities and human rights situations. However, the UAE and its partners can navigate these complexities by focusing on geoeconomic initiatives and shared interests, such as under I2U2.

Moreover, the UAE’s simultaneous investment in renewable and hydrocarbon energy sources highlights the UAE’s differentiated approach to balancing immediate energy needs with long-term sustainable development goals. This approach, which recognizes the variability of the global energy landscape, requires a pragmatic strategy to ensure energy security while supporting a clean energy agenda.

The UAE’s active engagement with minilateral groupings reflects a broader trend in international relations where countries are forming flexible, focused alliances to address specific challenges. This approach allows for more effective cooperation in key areas such as energy transformation, infrastructure development and food security.

Australia is also increasingly engaging in minilateralism while continuing to support the rules-based order and multilateralism. Australia has established a network of 26 minilateral and bilateral agreements on critical minerals to establish new supply chains. As commonly stated in these agreements, supply chains must be diversified, secure, as well as economically, environmentally and socially sustainable.

However, the rapid proliferation of agreements and their tendency to be competitive make this goal difficult to achieve. The motivation appears to be political ambition to secure agreements rather than a focus on implementation.

As international competition intensifies, including in the clean energy transition, such minilateral groupings are likely to become increasingly important in supporting international cooperation and achieving the Sustainable Development Goals. If Australia is to reap greater benefits from minilateralism, it must now focus on targeted cooperation on global, regional and national challenges. This collaboration must focus on building consensus and coordinating complementary strengths and resources to achieve common goals.