Hot spots: United Arab Emirates.(international section)

The UAE is a very young country, which was formed as recently as December of 1971, after British forces withdrew from the Gulf. It consists of the seven former Trucial States (Abu Dhabi, Ajman, Dubai, Sharjah, Fujairah, Umm al-Qaiwain, and Ras al-Khaimah) and the small state of Kalba, which was merged with Sharjah in 1952. The United Arab Emirates have a population of just under three million people, of whom 90 percent are foreigners, the highest such percentage in the world. Dubai alone has just under a million inhabitants, only 20 percent of whom are native.

With autocratic rule and a large presence of foreign workers there is bound to be some potential for tensions and for sociopolitical instability, but in the UAE the diverse nature of society has not proven to be divisive. Political strife is not a problem and the loose Federal structure has been, in effect, highly cohesive, even though Abu Dhabi accounts for more than 90 percent of the oil production and makes up around 60 percent of GDP, with Dubai following in second place and the other Emirates being much smaller contributors.

The highest Federal authority, is the Supreme Council of Rulers, consisting of the seven heads of the individual Emirates. Sheikh Zayed bin Sultan al-Nahayan, the ruler of Abu Dhabi and president of the UAE, died on November 2 last year. While he had held the post from the founding of the Union in 1971 and was, during this time, the driving force behind the UAE's modernization and globalization, the transition was smooth and the Federal Council unanimously elected his son, Sheik Khalifa bin Zayed al-Nahayan, who succeeded him also as ruler of Abu Dhabi. Just before his death, Sheikh Zayed bin Sultan al-Nahayan had appointed the first female Minister when he named Sheika Luhna al-Qasimi, a businesswoman and a member of the Royal Family, to be Minister of Economy and Planning.

Sheikh Zayed was a remarkable ruler, who oversaw a phenomenal transformation of his Emirate from a poor desert place to a booming city state. He was helped by Abu Dhabi's immense oil wealth--the Emirate boasts 10 percent of the world's proven oil reserves and is responsible for 95 percent of the UAE's output. He "also deserves credit for having laid the foundations of a Muslim Arab society that over time has proven to be remarkably tolerant of other faiths, a feature that contributed much to its stability. His rule was not without scandals--the collapse of BCCI in 1991 comes to mind, along with money laundering and the financing of terrorism--but Sheikh Zayed was a man with a vision who, among other things, was a prime mover behind the formation of the Gulf Cooperation Council in 1981.

Sheikh Khalifa inherits a very wealthy country in which Dubai has made up for the fact that it has only small off reserves (and these are diminishing fast) by diversifying its economy away from petroleum and turning itself into a vital business hub between East and West, for internet traffic, as an entrepot center, for air transportation, and for financial transactions. The UAE form a small country that is militarily weak and vulnerable in a region in which there is no shortage of predators, but its policies of tolerance and decent government have allowed the Federation to overcome such problems and maintain good relations with all neighbors.

The growth of gross domestic product in real ...