Russia has a deep-pocketed economic supporter that is also a staunch US ally

It is a known fact that China has been financially supporting Russia with its continuing conflicts in Ukraine. During the summer, The United Arab Emirates (UAE) has also been offering Russia financial support and aid, and thus establishing closer economic ties.

The UAE’s most obvious loyalty to Russia was shown with the deposit it made in the Russian Direct Investment Fund. The Russian Direct Investment Fund (RDIF) is owned by the Russian government supported by private equity funds with more than 10 billion dollars in foreign capital that offers resources financing to Russian organizations and companies. Some of the bank’s Western private equity board members include Apollo’s Leon Black and Blackstone’s Steve Schwarzman. Nonetheless, Middle Eastern countries, and especially the United Arab Emirates, governed by Abu Dhabi, have offered the majority of funds the past years.

Funds from the Middle East include:

•          In 2013, $5 billion was given the Department of Finance led by Abu Dhabi and was considered as the largest amount of money invested into Russia by a Middle East country.
•          In 2013, $1 billion was invested by Dhabi’s Mubadala Development Company.
•          In May 2014, Qatar’s Investment Authority invested $2 billion.

Other countries, outside the Middle East, also invested in Russ

ia. As recorded China Investment Corp. Invested $1 billion, the Japan Bank of International Cooperation invested $500 million and approximately $200 million was received Caisse des Depots in France.

As reported by Bloomberg, the RDIF may be transferred to the central bank of Russia, to prevent it from being sanctioned. However, a RDIF representative stated no official decision has been made and that discussions concerning this matter started two years ago.

Sanction-linked bills supported by Republicans in the USA Senate may apply pressure to USA private equity advisors to resign from the RDIF board and USA companies may be forced not to do business with the RDIF. Both these actions will subsequently influence the investors’ profits and will also negatively influence the Russian economy.

The RDIF investments were made prior to Russia’s invasion into Crimea. The investments were made after multiple meetings between Crown Prince Sheikh Mohammed bin Zayed Al Nahyan and Russian President Vladimir Putin over the passing years, where strong ties were created between the nations. In the meeting the signing of the tax treaty and nuclear agreement were also decided upon.

Abu Dhabi first invested in Russia the amount of $100 million in a Russian circumvent fund in 2010. Since 2010, all the seven emirates included in the UAE have been creating alliances and investing large amounts of funds in Russia, amounting to approximately $18 billion as stated by the UAE Minister of Economy Sultan bin Saeed Al Mansouri last February.

Since Crimea was invaded in March, the UAE free zones authorities have promised to further support Russia financially, establishing stronger bonds between them. According to reports, airport officials from Dubai travelled to Moscow in April in search of potential investors. Furthermore, in June the UAE’s Minister of Economy also travelled to Moscow, accompanied with 40 business and government officials, and agreed upon more than double the amount of trade between the two nations. The trade agreements would amount to approximately $7 billion in the year 2014. The UAE representatives and executives also conversed and made agreements concerning energy and agricultural projects with Russia. Finally, in August Etihad, a UAE government operated carrier stated freight services between Abu Dhabi and Moscow would commence.

On the other side, UAE also depends on Russia’s financial support. In the past ten years, Russians have frequently visited Dubai seeking warmer climate and enjoying tax-free shopping sprees. Russians are known as the UAE’s best consumer visitors.

Due to the billions of funds, the UAE countries derive because of the oil reserves they own, they are not likely to be influenced by the decrease in investments made by the Russians or by the decline in numbers of Russian tourists that visit the UAE.

Nonetheless, due to the UAE’s long-term relationship and alliance with the USA, they are bound to feel some political turbulence soon, since nations are planning to meet this week to discuss Russia’s invasion of Ukraine. Even though the UAE are not members of the NATO, a UAE representative is attending the alliance summit, which will take place in Wales, as an observer.