nd December 2011, the United Arab Emirates celebrates its fortieth National Day, completing four decades since the establishment of the state in 1971. Not surprisingly, the occasion is being marked with celebrations throughout the seven component emirates of the federation, Abu Dhabi, Dubai, Sharjah, Ra’s al-Khaimah, Ajman, Umm al-Qaiwain and Fujairah.
Located in the south-east corner of the Arabian peninsula, the seven emirates, formerly known as the ‘Trucial States’, were in treaty relations with Britain for 150 years. With the announcement by the British that they would be withdrawing from the region in 1971, the rulers of the emirates, led by the UAE’s founding father, the late Sheikh Zayed bin Sultan Al Nahyan, decided to form a federation, to work together to bring prosperity and development to their people. Aided by the vision of Sheikh Zayed, who believed that the revenues from the oil and gas resources of his own emirate, Abu Dhabi, should be put to use in the service of the inhabitants of the country as a whole, the UAE has subsequently emerged as one of the fastest-growing and most stable countries in the Middle East region.
Sheikh Zayed himself died in 2004, after over thirty years as President. The process of growth, however, has continued under the leadership of his son and successor as President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, the Vice President and Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, their fellow members of the UAE’s Supreme Council of Rulers and the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, His Highness Sheikh Mohammed bin Zayed Al Nahyan. Despite the vicissitudes of the global economy in recent years, the programme of development is still firmly under way.
The guiding principles that underlie the success of the state, originally laid down forty years ago, remain fundamental elements in the policies of the UAE’s Government. One was that the resources deriving from Abu Dhabi’s oil and gas should be shared across the country in the development of its infrastructure. A second was that, as Sheikh Zayed put it, ‘the country’s real wealth is its people’, and that, in consequence, particular effort should be made to ensure that they should benefit from the best available access to education, health care and social services, to equip them, both men and women, to play their full part in the country’s growth. Today, women account for around 70 per cent of all university graduates in the country and fill around two thirds of government jobs, providing four members of the Cabinet, ambassadors and even air force pilots, evidence of the country’s success in empowering its women.
A third principle, in recognition of the fact that the UAE was a country that would attract people of many nationalities, was that it should be a country where a spirit of tolerance between those of different communities and faiths should prevail, yet one where its own national culture and heritage should be both cherished and protected. Although firmly committed to the Islamic faith of its citizens, the UAE is now home to over 40 churches and cathedrals as well as to places of worship for other faiths.
And the fourth principle, looking outside the country, was that the UAE was to seek to promote dialogue, co-operation and the resolution of conflicts, both within the Arab world and the broader Islamic community and within the wider international community.
Over the course of the past year, important steps have been taken, both at home and abroad, in the further implementation of those principles. In both areas, the continuity in policy is notable. Indeed, that continuity has been crucial in the UAE’s progress over the last forty years.
In 2011, a year when dramatic and often violent change has rocked much of the Arab world, as peoples seek Governments that are more responsive to their economic, social and political needs, the United Arab Emirates has been able to continue on a steady path of evolutionary development. Thus, for example, in September, an important step forward was taken in the widening of popular participation in the process of government, through an expansion of the electorate for the country’s parliament, the Federal National Council from under 7,000 to 129,000, representing almost 30 per cent of the potential electors. While participation in the elections themselves was smaller than had been anticipated – an indication of a broad degree of satisfaction with the current system – plans are now being drawn up for an extension of the powers of the FNC itself, while its members set about the important task of serving as elected representatives of the country’s citizens at large.
Meanwhile, Government displayed its continued commitment to the upgrading of the social and economic infrastructure of the smaller emirates which, unlike Abu Dhabi and Dubai, lack resources derived from oil and gas revenues and from thriving commercial and tourism sectors sufficient to be able to finance their own growth. Following an extensive tour of these emirates early in the year by the Crown Prince of Abu Dhabi, HH Sheikh Mohammed bin Zayed, designed to identify the most urgent needs for investment, President HH Sheikh Khalifa bin Zayed ordered an immediate allocation of Dh 5.7 billion (around US $ 1.55 billion) for expansion of the water and electricity network and for upgrading of the local health care services and of housing for UAE citizens. As the implementation of these instructions got under way, further areas for investment were also identified, funded both by the Government of Abu Dhabi and by the federal UAE Government.
This is, of course, a process that will take some time to complete. While the UAE’s annual budgets have always been heavily focused on the provision of services, the provisional federal budget for the year 2012, issued in October, included increased allocations for development expenditure. Within the overall budget, amounting to Dh 41.4 billion (US $ 11.2 billion), the social services, including health care, education and housing, accounted for 47 per cent of the total. Of this education, including higher education, will receive Dh 8.26 billion ( US $ 2.25 billion) or 19.6 per cent, the bulk of which will be spent on plans to build new schools and other educational institutions and to upgrade the educational environment. A further Dh 5 billion (US $ 1.36 billion) is allocated to the Federal Water and Electricity Authority, to permit continued expansion of the Authority’s networks in Ra’s al-Khaimah, Ajman, Umm al-Qaiwain and Fujairah. Power and water projects in the other emirates continue to be funded by the local Governments.
The budget also offers evidence of the success of a longstanding policy that the federal Government should make progress towards being able to fund its own programmes, with revenues from fees and services being expected to raise around Dh 25.5 billion (US $ 6.9 billion) or just over 61 per cent of the total budget. This has been achieved despite the fact that the UAE remains, with a few exceptions, a tax-free economy and one, moreover, where there are no controls on the inflow or outflow of capital or profits, in line with keeping the country a free market economy.
Naturally, the revenues from oil and gas production continue to provide an important contribution to the national economy. With the fourth largest oil reserves in the world and with a production rate of around 2.5 million barrels a day, primarily from Abu Dhabi, as well as the fifth largest gas reserves in the world, the UAE remains one of the world’s largest producers of hydrocarbons. A large-scale investment programme is under way to increase sustainable production capacity of both onshore and offshore oilfields in Abu Dhabi while during the course of 2011 work preceded according to schedule for the bringing on stream of new oilfields both in Abu Dhabi and in Dubai.
The success of a longstanding programme to diversify the sources of national income, however, has meant that oil and gas revenues now account for only about thirty per cent of Gross National Product, despite relatively high oil prices. Tourism, a rapidly growing sector, now accounts for well over 10 per cent of GDP, with over twelve million visitors a year making their way to the country, stimulating continued growth in the country’s national airlines, in particular Abu Dhabi’s Etihad, Dubai’s Emirates and FlyDubai and Sharjah’s Air Arabia. The country’s seaports, too, are contributing to the growth of the tourism sector, attracting dozens of cruise liners a year, although the more conventional seaborne trade and commerce continue to account for most of the UAE’s shipping business, along with marine bunkering, where the East Coast port of Fujairah is now the second largest bunkering port in the world.
Another indication of the health of the local economy is provided by its non-oil foreign trade, which rose by 14 per cent in 2010, to Dh 754.4 billion (US $ 205.3 billion), compared to 2009. Exports rose by 27 per cent and re-exports by 26 per cent, with non-oil imports rising only by 8 per cent. Foreign trade has continued to rise in 2011.
Another important sector, construction, which employs over half of the total labour force, has begun to recover from the sharp downturn in 2008 and 2009 that occurred as a result of the first phase of the current global economic crisis. Meanwhile, as growth in the financial and services sector resumes, the country’s industrial sector has continued to grow, both in the downstream sector of the oil and gas industry and in other areas, with the huge EMAL aluminium smelter in the Khalifa Industrial Zone, north-east of Abu Dhabi, coming on stream during the course of the year. Other new industries in the Zone are due to be completed in the next few years.
While there has, naturally, been a focus by Government on the continued improvement of social services and on the expansion of those sectors of the economy which will make the greatest contribution to the creation of employment for young Emiratis, both men and women, the need to focus on other areas of national life has not been overlooked. Work continued during the year on plans for the development of the Sheikh Zayed National Museum of the island of Sa’adiyat, adjacent to Abu Dhabi city. One of several major museums, including a Louvre and a Guggenheim, being planned, it will form the centerpiece of a new cultural complex that is expected to attract visitors in their thousands from overseas. Attention has also continued to be paid to the protection of the UAE’s fragile environment, this, together with cultural heritage, being considered to be important components of the country’s national identity.
While pressing ahead with its own programme to develop peaceful uses of nuclear energy, in accordance with the relevant international guidelines on controls and inspection, so as to meet its needs for power generation, the UAE is also emerging as a leader in research into sustainable energy. Abu Dhabi, the headquarters of the international Renewable Energy Agency, IRENA, is also home to Masdar City, designed to be one of the world’s first carbon-neutral cities.
While the increasingly well-trained Emirati workforce is playing a growing role in all of these developments, the pace of growth over the last year, as has been the case since the foundation of the federation forty years ago, has been such that there has always been, and will continue to be, an important role to be played by expatriate residents, who come from over 200 different countries. It is the intention of Government that these expatriates should be afforded all of their due rights in terms of security and employment. Recognizing that there have in the past been cases of abuse of employment, particularly in the construction sector, the UAE’s Ministry of Labor, with the support of the International Labor Organization, ILO,
has continued its efforts during the course of the year to negotiate and to implement a series of agreements with major labor supply countries so that such abuses are eliminated. Another programme to protect the rights of expatriates, again with the support of the relevant international organizations, has involved the stepping up of efforts by the police and other bodies to identify and to arrest those responsible for human trafficking, a practice that the UAE is determined to eliminate. The recently-passed Law No. 51 is the first in the region designed to confront the issue.
In the field of foreign affairs, the last year has posed new challenges, particularly within the Middle East region. Pressure for change has led to considerable instability that continues as the year draws to a close, with the UAE calling for those countries that have undergone changes in government, like Egypt and Tunisia, to be supported in their endeavors to achieve security, social and economic development and stability.
In line with its traditional policy of seeking, through collective action, to offer support for people in countries suffering from conflict, the UAE played an active role in the UN-approved aerial campaign to protect civilians in Libya from the impact of the conflict in that country as well as providing substantial humanitarian assistance for those affected. Elsewhere, it has also called for an end to bloodshed in Syria and for the carrying out of meaningful political reforms that reflect the aspirations of its people.
Nearer to home, the UAE, along with other member states of the Gulf Co-operation Council, GCC, provided support to GCC member Bahrain, denouncing foreign intervention in its affairs and supporting steps taken to promote dialogue within the country, and also was actively engaged in attempts to negotiate a peaceful resolution of conflicts in Yemen.
In a speech to the United Nations General Assembly in September, the UAE Minister of Foreign Affairs, His Highness Sheikh Abdullah bin Zayed Al Nahyan, noted that: “my country undertakes extensive preventive diplomatic efforts in order to contain tensions and disputes occurring in the surrounding areas and beyond. The UAE vigorously seeks to promote direct and indirect humanitarian relief and development and economic aid, with a particular focus on those countries with situations of conflicts or natural disasters, in addition to its other effective contributions in peacekeeping operations, protecting civilians, and re-building efforts for states which have just emerged from violent armed conflicts.”
A good example of that approach has been the UAE’s involvement in the multi-lateral force in Afghanistan, where, besides working to improve security in the country, the UAE has also provided over US $ 1.5 billion dollars over the last decade for rehabilitation and reconstruction programmes.
In the Arabian Gulf itself, the UAE, with widespread international support, has continued its efforts to persuade Iran to resolve the issue of the occupation, since 1971, of the UAE’s three islands of Abu Musa and Greater and Lesser Tumb, through bilateral negotiations or through referral to the International Court of Justice. Unfortunately, as Sheikh Abdullah noted in his address to the UN, Iran has remains opposed to all efforts to reach a peaceful, just and permanent solution.
In the broader Middle East, the UAE expressed its support for the Palestine Authority in its attempt to obtain membership of the United Nations, in accordance with long-standing UAE backing for a settlement of the Israel-Palestine issue based on the relevant international resolutions and the Arab peace initiative that will lead to a just and lasting peace and to the establishment of a Palestinian state with Jerusalem as its capital. Expressing regret in his UN speech at the failure to make progress in peace talks, “due to the intransigent stance taken by the Israeli government,” Sheikh Abdullah noted that: “the UAE is deeply concerned at the deteriorating conditions of the Palestinian people, who are suffering from deprivation as a result of the continued occupation of their land… and the frequent aggressions and violations committed against their inalienable rights under international law” adding that the UAE, in particular, condemned Israel’s settlement policy in the Palestinian territories.
As noted earlier, the United Arab Emirates has made a practice, since its establishment in 1971, of providing assistance to those in need because of conflicts and natural disasters. Through the UAE Red Crescent Authority and a number of other bodies, including the humanitarian funds established by the President and Vice President, emergency assistance worth several hundred million dollars has been sent during the year to many countries, including Pakistan, Somalia and Thailand, suffering from droughts, flooding and famine. Other aid has been provided by bodies such as the Abu Dhabi Fund for Development and Dubai Cares to support development programmes, both in terms of infrastructure and the financing of educational and health care programmes. Recipients include a wide range of countries, from Egypt, Gaza and the West Bank in the Middle East to the Seychelles and the South Pacific.
Another area in which the UAE has been active is in efforts to counter maritime piracy, particularly in the north-west Indian Ocean and the Arabian Sea, where the UAE Navy has been working with other forces to protect shipping.
As Foreign Minister Sheikh Abdullah bin Zayed noted, however, in a speech to the Summit on the Global Agenda, held in Abu Dhabi in October: “it is clear that the traditional model that treats piracy purely as a security issue needs to be updated to ensure military and political efforts aimed at confronting it can be more effectively coordinated. The UAE believes that, in addition to counter-piracy efforts taking place at sea, the promotion of social and economic development initiatives on land are equally important if we are to address this issue in a lasting way.”
“What is becoming clear,” Sheikh Abdullah said, is that “the nature of the challenges the world faces today requires the development of new models, or the adaptation of traditional ones, if they are to be addressed effectively.”
Recalling that over 900 million people were affected by famine and chronic hunger in 2010, he added that the issue of food security could not be effectively addressed without tackling the need for security of water supplies. A similar holistic approach needs to be taken on counter-terrorism, he said, citing the UAE’s view that the violent ideologies feeding terrorism around the world are also in part based on an absence of hope and the exploitation of economic disadvantage in vulnerable communities.
Both at home and within the wider world, the UAE has faced numerous challenges over the course of the last year. As has been the case over the last four decades, it has continued to tackle them within the framework of the guiding principles laid down by its founding father, Sheikh Zayed. His strategy of seeking to make steady, consistent progress, based upon consultation and consensus that derived its legitimacy from the consent of the people, has proved its worth since 1971.
As the United Arab Emirates enters into its fifth decade, it is confident of making further progress, both at home and on the world stage, in the years to come.