Automated: The Arab World in 2030

Artificial intelligence is changing the way countries interact. By 2030, AI technology is forecasted to contribute more money to the global economy than the current output of China and India combined, and nearly $230 billion will flow directly into the economy of the Middle East. At the helm of these developments are Saudi Arabia and the United Arab Emirates, two of the richest nations in the region and the guardians of vast but gradually depleting oil fields. Although AI is predicted to revitalize the Saudi and Emirati economies, contributing 14 and 12.4 percent to GDP, respectively, and may offer a viable approach to a post-petroleum world, both powers remain in recovery from the plummet of crude oil prices from their June 2014 peak. The Arab world will inexorably benefit from the proliferation of AI technologies in healthcare, manufacturing, and transportation; however, with billions of dollars devoted to combatting Islamist extremism, mitigating tensions with Iran, and fighting over Yemen, it is worth exploring how such an asymmetrical shift in the MENA economy will shape regional politics. With Saudi Arabia and the United Arab Emirates expected to reap most of the profits, three issue areas deserve special attention: Yemen, Qatar, and Iran.

The Saudi Shakedown

Since 2010, the Saudi defense budget has occupied a growing share of government expenditures, a side effect of sweeping austerity measures undertaken after the crash to counter the deficit. Following the 2017 release of Crown Prince Mohammad bin Salman’s “Vision 2030”, an ambitious plan for an economic overhaul, the Saudi government implemented policies supporting budgetary expansion and diversification from oil. The Kingdom’s $2 trillion Public Investment Fund attempts to address concerns over long-term growth, leaning on a diversified portfolio and strategic investments in robotics and automation for a variety of objectives. Last October, Saudi Arabia became the first country to grant citizenship to a robot, Hanson Robotics’ “Sophia” android, at a tech conference in Riyadh.

To be sure, military operations are only one component of Saudi investments in AI. Nonetheless, expanded ownership of robotic and remotely-operated combat machinery, to which the bulk of revenues will undoubtedly flow, may prove incendiary to the Kingdom’s discontented neighbors. The Gulf kingdom acquired its first drone fleet from China in 2014, with several similar purchases in later years, and has expressed high interest in autonomous weapons systems. In 2015, Saudi Arabia replaced India as the world’s largest arms importer and spent the most on defense as a percentage of its GDP.

The Emirati Emergence

Meanwhile, cushioned by sizable oil reserves and a more diversified economy, the UAE fared slightly better in the oil market slump than its ally to the west. Defense and security expenditures have remained high in recent years, though funds for social programs have been swallowed in part by those for security measures. Expanding its political and technological reach, the nation recently negotiated several trade and military agreements with the United States, Russia, Spain, and South Korea, and in late 2017 it formally announced a new defense alliance with Saudi Arabia, a move over which several other Gulf Cooperation Council (GCC) members have sounded the alarm. The Emirates have expressed a strong commitment to innovate, digitize, and embrace technological development. Dubai has already introduced robocops as an element of policing, and driverless taxi pods are in development. As a component of the 2017 cabinet reshuffle, Prime Minister Sheikh Mohammed bin Rashid al Maktoum created the world’s first Minister of State for Artificial Intelligence, responsible for implementing new technologies and applying AI to developing sectors. Like that of Saudi Arabia, the Emirati defense budget is expected to expand by an approximate 6% by 2021. Pending or recently finalized are more than 80 Emirati security contracts--including the procurement of more Chinese-made drones--amounting to over $5 billion. With the Emirati presence in regional conflicts expected to grow as result of these autonomous technologies, the complex network of MENA security partnerships may be thrown off balance.


Both Saudi Arabia and the Emirates have become increasingly hawkish toward Iran's regional engagements. Staunchly opposed to political Islam in the Arab world, the young leaders of both countries have engaged in military combat with Iran, often indirectly, for years. With Saudi Arabia and Iran vying for regional and religious dominance, recent months have seen a series of threats and accusations that have pushed the Arab League-Iranian conflict to the brink. Although Iran’s military spending counts for just one-eighth of Saudi Arabia’s, the Islamic Republic controls three times the number of military personnel and owns vastly more combat tanks and naval assets. Additionally, Iran’s presence in the Persian Gulf and Strait of Hormuz grants it the strategic advantage of transportation to and from the Arabian Sea.

The UAE maintains warmer political and economic relations with Iran than Saudi Arabia. Ethnic Persians compose 10% of Dubai’s population, and more than 8,000 Persian merchants and firms have commercial contracts in the UAE. However, three disputed Persian Gulf islands, Abu Musa, Greater Tunb, and Lesser Tunb, remain a source of conflict between the two nations, though both have expressed strong desires to avoid military confrontation. Thus, concerns over Iran originate mostly from Saudi Arabia. As the Saudi defense budget continues to swell, with investments in autonomous and artificially intelligent robotics, especially despite recent austerity measures in other sectors, Iran may accuse Arab League leaders of political grandstanding or, worse, preparing for war. The morass of empty and real Saudi threats may take on added severity if Iran sees its enemy as better protected than itself. Expanded defense expenditures in autonomous weaponry in the coming decade may further inflame Iranian concerns about its own defense capabilities, which may put the future of the Joint Comprehensive Plan of Action, dubbed the Iran Deal, in doubt.


Since its destabilization after the Arab Spring, Yemen has become a battleground for massively destructive civil and proxy wars, exacerbated by corruption, a separatist movement in the south, and the infiltration of Al-Qaeda cells into local militias. The conflict saw the overthrow of authoritarian leader Ali Abdullah Saleh in 2011 in favor of his deputy, Abd Rabbu Mansour Hadi, and has since engaged many powers in the region. Five thousand civilians have died; many more are expected. How to manage the various warring groups, particularly the armed Shia Houthi rebels occupying the capital, has created fissures within the Saudi-led coalition, of which the UAE is a member, and among involved parties in the region. Within the ambit of the civil war, the UAE has aligned itself with the separatist groups that recently initiated a flimsy alliance with Hadi’s supporters. Meanwhile, in its campaign against the Houthis, regarded as an extension of and backed by Iran, Saudi Arabia embarked on an air war to support Hadi but remains hostile to UAE-based separatists.

As highly efficient and autonomous Saudi and Emirati weapons systems advance into the realm of AI, the Yemeni Civil War is expected to see a spike in casualties that will test the mettle of the Houthi rebels, their Iranian supporters, and the Hadi government alike. Further, as both Arab nations’ expand their wealth and AI arms stockpiles, they are likely to engage in more intensive indirect combat on the ground. Starkly different approaches to the conflict, compounded by billions of dollars in profits from AI, may prove to be a damning force against the strength of the Saudi-Emirati alliance.


Related to concerns over Iran is the potential for violent escalation of the GCC-Qatar dispute. A twelve-month-old conflict, the rift among Gulf states developed as result of two controversial Qatari engagements: a strong alliance with Iran and alleged support of terrorism. Sharing the world’s largest offshore gas reserve, Qatar and Iran have maintained a healthy economic partnership despite the former’s membership in the Sunni coalition against the Shia republic. Stripped of access to many imported commodities as part of a GCC boycott, the gas-rich emirate has relied heavily on Iran for foodstuffs and basic supplies, a relationship that has further incensed Iran’s most formidable regional ally, Saudi Arabia. Riyadh and its Gulf partners have also harshly condemned Doha’s alleged support of terrorism. To date, the Qatari government has come to the aid of Islamist organizations regarded by other Gulf states as terrorist groups, among them Hamas, the Muslim Brotherhood, and Islamic State jihadists.Although the relationship between Abu Dhabi and Doha remain relatively amicable relative to other GCC members, it soured dramatically in June 2017 when Qatari leaders refused to accept the GCC’s “13 points”, a list of demands including the severance of ties with Iran and a promise to disengage from other nations’ internal affairs. It was an attack on Qatari sovereignty, according to Foreign Minister Sheikh Mohammed bin Abdul Rahman Al Thani.

The impact of new AI technologies on these rising tensions toward Qatar will largely depend upon the country’s perceptions of its own financial strength. Insulated by vast natural gas reserves, Qatar leans on its wealth for security amid Saudi threats. “We have sovereign wealth funds of 250 percent of gross domestic product,” said Qatari finance minister Ali Sharif al-Emadi, “we have Qatar Central Bank reserves, and we have a ministry of finance strategic reserve.” Despite a comprehensive blockade and boycott, believing that it can withstand Saudi-led repercussions, the emirate has loudly spurned GCC demands. Amid the confident rhetoric, however, the Qatari defense budget has not decreased despite the damage of the oil market slump. If profits from AI match their lofty expectations in the next decade and thus expand the Saudi and Emirati GDPs by a large share of the $230 billion, Qatar will undoubtedly loses its sense of security and adopt a more offensive foreign policy against its enemies. Threatened by growing military might elsewhere as result of AI technologies, Qatar may take a stronger arm against regional aggressors, a shift holding the potential to inflame

Watching as the Saudi and Emirati economies become once more in the ascendant, aggravated by burgeoning weapons stockpiles and an uneven distribution of AI-related wealth, weaker regional powers may turn to more aggressive military activity as a way to mitigate the size disparity. And Yemen, the theater on which regional enemies have fought intensely in recent years, may suffer further civilian casualties and the destruction of major city centers. Not only will the adoption of autonomous weapons change the patterns and practices of war in the region, but also the profits reaped from these technologies in other sectors will disrupt the regional power balance. Although they were dealt a blow when oil prices crashed, Saudi Arabia and the United Arab Emirates have made it clear as artificial intelligence continues to fuel progress, they mean business.

Note From the Editor: The original title, "How Artificial Intelligence Is Shaping the Political Economy of the Middle East", and image for this article have been changed post publication