United Arab Emirates - Future trends
There appears to be little doubt that the UAE has a bright economic future. The UAE controls nearly a century of oil reserves, maintains a modern infrastructure and a stable political system, lacks significant overseas debt, and has the financial resources necessary to address the economic, environmental, and social challenges of demographics, the dominance of oil in the state, and the paucity of water supplies before they become overwhelming. At the same time, the UAE's economic and social problems are very real and will intensify if they are not addressed.
Most of the UAE's proposed solutions to these problems have exacerbated certain aspects of them. The gap in wealth between the poorer and richer emirates could exacerbate tensions in the future. Abu Dhabi has combined its privatization programs with deep cuts in subsidies to the northern emirates, a move that has only enlarged this gap. This issue will be paramount if Shaykh Khalifa emerges as the dominant figure in the UAE government after the death of Shaykh Zayid. Privatization also favors the UAE's service sector, which is dominated by expatriates. This, too, could cause very serious social tensions. In addition, the offset program is contingent upon the UAE's spending billions on arms for decades, an expenditure that is likely to become a great burden. Thus, the UAE's principal challenge in the next century will be to build a viable society whose economic success does not undermine its economic and political stability.