Emirates: Abu Dhabi - COUNTRY PROFILE
GEOGRAPHY
Abu Dhabi is the largest of the seven emirates which make up the UAE, occupying almost 87% of the country’s total area. Sabkha (salt flats) line much of Abu Dhabi’s coastline, but inland the emirate is comprised of sand and gravel desert. To the south, the dunes of the Rub al-Khali (Empty Quarter), the largest sand sea in the world, rise from the flats and stretch for hundreds of miles across Saudi Arabia. Mountainous terrain in the east of the territory runs along the Oman border. Jebel Hafeet, which towers over the city of al-Ain, rises to an impressive 1180 metres above sea level, while Abu Dhabi’s coastline is peppered with more than 200 islands. The climate is very dry, with minimal rainfall during winter months. For much of the year, the temperature is pleasant, although in summer temperatures reach the high 40s (C) with a paralysing 90% humidity, particularly on the coast. The city of Abu Dhabi, which sits on an island in the Gulf, is the capital of both the emirate and the UAE. The emirate’s other principal city is al-Ain, which has sprung up around seven oases on the Oman border and is also particularly dear to the ruling Al Nahyan family.
FORMATION & RECENT HISTORY
The UAE is a federation of seven sheikhdoms: Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain. Along with Bahrain and Qatar, these emirates became known as the Trucial States on account of a defence pact they signed with Great Britain in 1853. Following British withdrawal from the region in 1971, the emirates, fearful of their larger neighbours, drew together under the guidance of Abu Dhabi’s ruler, Sheikh Zayed bin Sultan Al Nahyan, and the original six were federated as the UAE. Qatar and Bahrain chose to remain independent, whilst Ras al-Khaimah joined the federation in 1972.Oil was first discovered in Abu Dhabi in 1958, followed by further discoveries in Dubai and Sharjah. Offshore oil exports began in 1962 and onshore exports a year later. In just four decades, the revenues from oil and gas have transformed the pearl-diving community of Abu Dhabi into one of the wealthiest cities in the world, where gleaming high-rises soar from an artificial oasis of lush gardens and palm-lined avenues.
In November 2004, the population mourned the death of Sheikh Zayed bin Sultan Al Nahyan, Abu Dhabi's ruler since 1966 and President of the UAE since its formation. Sheikh Zayed was instrumental in the formation of the UAE in 1971 and is credited with adeptly guiding the oil-producing state through decades of peace and stability.
Zayed was widely admired and respected both locally and internationally for the fair way in which he distributed the country's wealth and for his skilful diplomacy. Sheikh Khalifa bin Zayed Al Nahyan, Zayed’s oldest son, became ruler of Abu Dhabi and was elected President of the UAE while his half-brother Sheikh Mohammed bin Zayed Al Nahyan became Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council.
GOVERNMENT & POLITICS
Sheikh Khalifa bin Zayed Al Nahyan is the hereditary ruler of Abu Dhabi, however, the emirate is overseen primarily by the Abu Dhabi Executive Council, which is chaired by Crown Prince Sheikh Mohammed bin Zayed Al Nahyan. The total number of members of the Executive Council has been slimmed down to 12 since the succession and is comprised largely of prominent members of the ruling family as well as a number of respected politicians.
The emirates maintain their hereditary rulers who, as a group, form the UAE’s Supreme Council of Rulers, headed by the president. Although the presidency is renewable every five years through a vote in the council, Sheikh Zayed bin Sultan Al Nahyan held the presidency from the formation of the UAE until his death in November 2004, and there is an implicit understanding that Abu Dhabi’s ruler will always be elected president.
At a federal level, laws must be ratified by the Supreme Council, however, the Council of Ministers forms the executive authority of the state. This 20-member cabinet is headed by the president’s chosen prime minister, a post currently held by Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum. The cabinet also refers to the Federal National Council (FNC), a 40-member consultative body to which each emirate appoints a certain number of members. In the case of Abu Dhabi, this is eight. The procedures for appointment to the FNC have recently been amended so that each emirate must now select its representatives through an electoral body. The size of each electoral authority must be 100 times greater than the number of representatives it appoints. Half the members of each electoral body will be selected by the ruler of the emirate while the other half will be directly elected by residents of the emirate. These amendments are considered to be the first step in a wider electoral reform programme which will see greater representation at a federal level.
POPULATION
According to the 2005 census figures, the population of the emirate of Abu Dhabi is almost 1.3m making it the largest of the seven emirates. The total population of the UAE stands at approximately 3.8m. However, it is estimated that there are over 300,000 non-nationals resident in the country who were absent or did not participate in the census. This takes the population of the country over 4m, a figure still much smaller than the 5m many analysts were estimating before the publication of the latest census. Nationals make up a mere 20.1% (824,921) of the population with 51.1% of these being under the age of 20. The mix of non-nationals is diverse with a large number of Indians and Pakistanis as well as residents from Europe, the Levant and other South Asian countries.
It is not unusual in the Gulf for the local population to be in the minority, but the proportions are more extreme in the UAE than elsewhere. The large number of expatriate workers skews the demographic balance. Since most expatriate labourers do not earn the minimum Dh4000 per month required to bring their families into the country, the percentage of non-nationals who are men stands at 72.3%.
The local population is predominantly Sunni Muslim and most of the imported labour is also Muslim, although this is by no means a pre-requisite. There are also many expatriate Christians, especially from South Asian islands and from Europe. Islam is the official religion of all seven emirates and the federal UAE. The government generally adheres to the principle of religious tolerance, and freedom of worship is enshrined in the federal constitution, provided that religious practices do not conflict with public policy or violate public morals. There are several Christian churches across the country, often located next to mosques.
EDUCATION & EMPLOYMENT
Mandatory primary and secondary schooling has resulted in a comparatively strong literacy rate, currently set at 91%.
Higher education has been particularly successful in Abu Dhabi in recent years. There are two government-funded universities: Zayed University, which has campuses in Abu Dhabi and Dubai, and UAE University based in al-Ain. Abu Dhabi also has two private institutions: Abu Dhabi University and al-Hosn University. The Sorbonne University is set to open in the capital in October 2006 further raising the profile of the emirate and providing the catalyst for further international education initiatives in Abu Dhabi. The Higher Colleges of Technology (HCTs) were founded in 1988 and offer a more technically driven programme of courses in IT, engineering and technology. In 2005 there were 15,000 students enrolled at the HCTs’ 12 single-sex campuses across the UAE. In 2001, the Abu Dhabi National Oil Company (ADNOC) signed a ten year agreement with the Colorado School of Mines (CSM) to provide a premier engineering educational institute known as the Petroleum Institute. It is hoped that the graduates of the Petroleum Institute, the first of whom graduated in 2006, will help to address the shortage of skilled technicians and engineers in the national oil industry.
However, only 11% of nationals go on to receive a university degree. More than 50% of these students are female. This is in part because young men have alternative opportunities, such as the police or armed forces, but it is also a sign of the increasing eagerness of young women to pursue a career.
There are approximately 30,000 unemployed nationals in the UAE which is apparently far lower than in other Gulf Cooperation Council (GCC) countries such as Bahrain and Oman. This is largely because the country's considerable hydrocarbon wealth allows the public sector to absorb a far greater proportion of the native labour force. However, UAE nationals account for less than 2% of the private sector workforce, an imbalance the government is seeking to address through its Emiratisation programme.
ECONOMY
Sitting atop 9% of the world’s proven oil reserves (98.2bn barrels) and almost 5% of the world’s natural gas (5.8 trillion cu metres), the UAE’s extraordinary hydrocarbon wealth gives it one of the highest GDP per capitas in the world. Abu Dhabi owns the lion’s share of these resources – 95% of the oil and 92% of gas. The Abu Dhabi National Oil Company asserted in August 2006 that the UAE is presently ready to expand production of crude oil to 2.8m barrels per day (bpd)and is on target to push production to 4m bpd by 2010. Given these vast resources, oil and gas continue to play a crucial role in the country’s economic profile. According to the IMF, the real GDP growth of the UAE stood at 12% in 2005 with a predicted growth rate of 10.5% in 2006.
As a result of the government’s economic diversification plans, served by the inexorable rise in oil prices, the country’s non oil and gas GDP has outstripped that attributable to the energy sector. Remarkably, non Oil and Gas GDP now constitutes 64% of the UAE’s total GDP. This trend is reflected in Abu Dhabi with substantial new investment in industry, real estate, tourism and retail. As Abu Dhabi is the largest oil producer of the Emirates, it has reaped the most benefits from this trend. It has taken on an active diversification and liberalisation programme to reduce the emirate’s reliance on the hydrocarbon sector. This is evident in the emphasis on industrial diversification with the completion of an industrial free zone known as the Industrial City of Abu Dhabi (ICAD) and the construction of another, ICAD II, in the pipeline. There has also been a drive to promote the tourism and real estate sectors with the Abu Dhabi Tourism Authority (ADTA) and the Tourism and Development Investment Company (TDIC) undertaking several large scale development projects. These projects will be served by an improved transport infrastructure with a new port, an expanded airport and a proposed rail link between Abu Dhabi and Dubai all in the development stages.
Despite a recent correction to Abu Dhabi’s fledgling securities market (the ADSM), banks continue to enjoy healthy growth on core earnings in the emirate. As plans for the development of the emirate continue a pace, the opportunities for banks to expand their corporate, commercial and retail divisions in Abu Dhabi are increasing rapidly. Many banks are seeking to support the government’s diversification strategy, a fact reflected in the rush among international financial institutions to step up their presence in the emirate.
A particular area of growth is the Islamic financial services sector, with Abu Dhabi Islamic Bank recording some of the most impressive growth figures in the first half of 2006, recording net profits of Dh291.7m ($79.4m), an increase of 106% on 2005.
