The UAE is the second state in the GCC to make use of its geographical advantages of having several sea outlets. Since the early 1980s, Saudi Arabia has increased its export/import options by developing major ports on the Arabian Gulf as well as the Red Sea shores. The Arabian Gulf-Red Sea pipeline crossing Saudi territory from West to East provided a huge advantage and flexibility by allowing Saudi oil to be exported from two major outlets located in entirely different geographical areas. The advantage of having two operational sea outlets became clear during the first Gulf War when Saudi Arabia was able to maintain some of its oil export via its Red Sea pipeline.

The tanker war in the Arabian Gulf waters during the Iran-Iraq War made the seaborne export of oil a risky and costly business. Renewed threats of interference with the freedom of navigation through the Strait of Hormuz by certain regional states and by non-state actors, mainly terrorist groups, is a matter of major concern for all oil-exporting Gulf States.

The opening of the naval base by the UAE has to be seen as part of a wider policy of diversification and of securing its critical infrastructure and energy supply. Earlier this year, the government announced its decision to invest in an oil storage terminal at the Fujairah port and build the country's biggest power and water treatment plants. Besides, the China National Petroleum Corporation is building a 400 km pipeline that will establish the capacity to transport 1.5 million barrels of oil from the Habshan oil field in the southwestern part of the emirate of Abu Dhabi to the Fujairah export terminal, avoiding the Strait of Hormuz if necessary.

Although the UAE initiative to utilize the sea outlet in the Gulf of Oman has come a little late, it is an important and necessary step to diversify and expand the country's import and export capabilities. Exporting oil through the Fujairah sea port would enable tankers to bypass the Strait of Hormuz. This alternative route is not only less costly but is more secure for tankers. In general, investment in a new sea outlet will reduce the UAE economy's vulnerability to conflicts threatening the country's energy export and enhance its resilience to outside pressure.

Besides increasing its capacity to boost exports by opening another sea outlet, the government is also trying to diversify its sources of energy. The UAE energy policy identifies at least two areas where the principle of diversification has been applied.

First, to meet the country's energy needs, the UAE is working to develop an alternative to hydrocarbon as the sole source of energy and is investing in both alternative renewable energy projects, such as the MASDAR project, and in nuclear energy.

Second, the decision of the UAE government to award the main contract for building nuclear reactors to the South Korean government can also partly be seen within the context of multiplying its options. While other factors such as finances and training certainly played a part in the decision to award the contract to South Korea, it is after all a strategic decision of the state to reduce dependence on the West by looking for alternative partners in the East; though the decision came as a surprise for many European countries.

The principle of diversification is also reflected in the country's foreign and defense policies. The establishment of the French naval base last year marked a departure from the traditional policy in the region to fully rely on the United States towards closer cooperation with other Western allies. The UAE arms procurements policy underlines that the country is looking to not just one defense supplier, that is the US, but is considering offers from French and British defense contractors as well.

These diversification strategies only point to the country's long-term thinking on the issue of achieving sustainable development. It is a sensible policy to multiply your options. After all, why lay all eggs in one basket and increase dependency and vulnerability?
 
(Nicole Stracke is researcher at the Security and Defense Department at the Gulf Research Center, Dubai.)