April 6, 2010 / 10:18 AM / 9 years ago

FACTBOX-Rivalry and differences between Saudi and UAE

April 6 (Reuters) - Competition for roles in a planned monetary union has brought to the open rivalry between Saudi Arabia and the United Arab Emirates, the Gulf Cooperation Council’s (GCC) two biggest economies.

The UAE quit the monetary union plan last year after heads of states chose Riyadh as a location for the bank, dealing a blow to a plan that has been languishing since 2001.

The appointment last week of the Saudi central bank governor at the helm of the monetary union’s top authority may be for only a one year term but the move may further reduce prospects for the United Arab Emirates and Oman to return.

Here are some facts about the rivalry:

* Differences between the two countries started to emerge after the death in 2004 of UAE’s founder Sheikh Zayed al-Nahayan, analysts say.

Prior to his death, the relationship “had traditionally been a bit of elder brother to a younger sibling,” said Khaled al-Dakhil, a prominent Saudi political writer.

“But the new generation of rulers in the UAE wants to change that and impose some equality and the Gulf central bank location issue has made this more manifest than ever before.”

* Last August, Saudi authorities stopped UAE citizens from entering the kingdom using identification cards because these showed a map that included what Saudis claim to be part of their territory.

The GCC allows the bloc’s native populations to move across member states using national ID cards.

Riyadh urged Abu Dhabi to correct the map according to a border agreement signed in 1974 and which Saudi Arabia registered on behalf of the United Nations in 1993.

The UAE says the 1974 accord was never been ratified by its Federal National Council, a quasi-parliamentary body.

The accord gave Saudi Arabia a 25-km (16-mile) corridor on the Gulf called Khor al-Odaid and access to all hydrocarbons in the rich Shaybah-Zarrarah field but deprived the UAE and Qatar of a joint land border. In exchange, the UAE retained the al-Ain area, which Saudi forces tried to seize in the 1950s.

* In what some analysts see as a sign that the UAE was not willing to give up on the disputed agreement, the country formed a council for border affairs in late 2009.

*Saudi newspapers reported widely about a soccer match incident in Dubai on Tuesday when police had to end a riot between fans of UAE club al-Wasl and technical staff of Saudi club Saudi al-Nassr.

* Despite the tensions, Saudi Arabia remains the UAE’s most important neighbour. Many Saudi tourists visit the UAE and the Saudi market is a lucrative market for UAE-based manufacturers.

Saudi investment in the UAE, especially in the financial and property sectors, is widely believed to outweigh UAE investment in Saudi Arabia.

Jawad al-Anani, an economist who held ministerial portfolios in Jordan, said the UAE would not be able to stay out of the monetary union if it successfully launches a single currency.

“UAE has strong trade relations with other GCC members, starting with Saudi Arabia. The UAE will opt for a wait-and-see attitude towards this monetary union plan,” Anani said.

The UAE also relies on Saudi support in a dispute with Iran over Abu Musa islands, thought to hold important hydrocarbon reserves. (Compiled by Souhail Karam)

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