Communicating fear -- UAE vs. BlackBerry

By Hani Sabra and Willis Sparks

The friction between the United Arab Emirates and Research in Motion (RIM), isn't new. Since at least 2007, security officials in the UAE have complained that the Canada-based company that makes BlackBerry devices uses encryption technology that makes it impossible to monitor the content of BlackBerry-generated messages within the country -- creating opportunities for spies, terrorists, and other anti-government militants to communicate within the emirates without fear of detection. RIM exports its data offshore, denying authorities access to its systems.

Last weekend, the UAE announced that on October 11 it would suspend BlackBerry services to the country's subscribers and visitors. A few hours later, Saudi officials followed suit. Emirati authorities say that unless RIM lifts the veil on its messaging encryption, allowing security officials to track threats to national security, there will be no service inside the country. Beyond perceived threats from Iran, al Qaeda-related groups, or other militants, Abu Dhabi would like to avoid any repeat of the embarrassment that followed the assassination of a Hamas leader in Dubai in January, an attack that Emirati officials blame on Israel.

But the UAE will probably compromise with RIM before the deadline. The emirates have real security concerns, but they also want to build on their role as the Arab world's primary commercial and tourism hub. There are half a million BlackBerry users in the UAE, about ten percent of the total population, and blocking BlackBerry is bad for business. The UAE announced the ban to signal RIM that it's serious about security, but it gave a ten-week heads-up to allow time for a workable compromise.

The UAE will probably do most of the compromising, since RIM, which operates in more than 170 countries, won't live or die based on access to the Emirates. The UAE simply doesn't represent a large enough piece of RIM's business to persuade the company to set a precedent which other governments will insist on following. RIM can make modest concessions without altering the company's security model, and that's probably what it will do.

It's also possible, though much less likely, that several other countries will follow the UAE's lead, forcing RIM to either fundamentally alter its security model or surrender access to some especially lucrative markets.

The Saudis, who say they will flip the switch later this month, will face much less pressure to compromise. Saudi Arabia remains an oil-based economy, and its leaders have no ambition to compete with the UAE for the chance to host more corporate or financial leaders -- or foreign tourists. And though its population is four times larger than the UAE's, Saudi Arabia has fewer BlackBerry users. Closing the door on RIM will have little impact on the country's business and generate little if any domestic opposition.

But this is not simply a story of authoritarian governments and their drive for control. The world's leading democracies have their own communications-related security concerns. In July, India threatened to ban Blackberry use unless RIM provided Indian security officials with access to data transferred by its secured messaging system. RIM reportedly promised to work toward compromise, and talks continue.

And what would happen if militants coordinated a successful terrorist attack inside the United States using BlackBerry's encrypted technology? Remember the phrase "warrantless wiretapping?" If American media reported that the U.S. government had no access to the communications that terrorists use to kill Americans on U.S. soil, how fast would lawmakers of both parties rush to force open BlackBerry's coded communications?

There are many forms of government, but fear is universal. This is a conflict that political officials and technology companies will be fighting on many fronts and for many years to come.

Hani Sabra is an analyst in Eurasia Group’s Middle East practice.  Willis Sparks is an analyst in the firm’s Global Macro practice.

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