English Literature

The history of the United Arab Emirates (UAE) is remarkably interesting, providing the reader with one of the most interesting rag-to-riches stories that the world has heard of about a developing nation in modern times. Before the 1950s and 1960s when Western oil companies found out that this small Arab confederate had huge oil deposits, little was known about the nation on the international arena. But within a period of less than 50 years, wealth derived from oil exports has transformed the UAE from an insignificant remote and poor desert country changing the landscape into a region of glittering modern cities, with luxury beach resorts and hotels, towering skyscrapers, magnificent apartments and shopping malls, as well as a considerably high standard of living measured by modern world standards (King 2008, p.5). Today, UAE has the second highest per capita income in the Gulf region, coming second only to Saudi Arabia and oil wealth accounts for 88 of all government income. UAE residents are generally very prosperous and because oil wealth has helped to wipe out poverty among the masses, UAE residents top the list of extravagant Arab world spenders (Nydell 2006, pp.187-188). Oil wealth has influenced every aspect of life in UAE, such that tremendous changes have not only been recorded within its economy but in the social, cultural and political spheres.  The geography of this nation has also not been exempted from such tremendous changes and the relationship that UAE nationals now have with their environment has greatly improved. A once unstable pearling and fishing desert economy whose only notable substitute was small-scale agricultural production can give credit to oil wealth, for its rapid transformation into a high-income oil-based economy that is driven by high concentrations of foreign expatriate labor. This labor has been the major force behind the growth of different sectors of the UAE economy. Yet such affluence does not come without some disadvantages (Abed  Hellyer 2001, p.202).

Background information about UAE
    The UAE refers to a loose confederation of seven emirates namely Abu Dhabi, Sharjah, Ajman, Umm al Qaiwain, Fujairah, Ras al Khaimah and Dubai. This confederation was formed in 1971 when the region attained independence from Great Britain. Formerly referred to as the Trucial states, the new confederacy now referred to as UAE received a new leader when Sheikh Zayed bin al-Nahyan then leader of the emirate of Abu Dhabi which is also the largest emirate became its new ruler after withdrawal of colonial leaders (Anonymous 2009, s 13-14). Although each of the seven emirates was allowed to retain a large degree of independence, the seven confederate rulers found it wise to form a Supreme Council of Rulers which is the current governing body in the UAE. This Supreme Council of Rulers is also holds the power to appoint a prime minister and the nations cabinet. As a country, UAE does not however have any formally elected governing bodies despite the fact that it is considered one of the most liberal Gulf States. No political parties exist in UAE and the only notable move towards a democratic government was the December 2006 elections of half of the countrys Federal National Council although the emirs had a higher hand in identifying who would cast the vote in every emirate (Anonymous 2009, s 13-14).
UAE before the discovery of oil
    Prior to the discovery of oil in the 1950s, the UAE was a very poor and backward desert region and up to the year 1950, this desert economy was founded upon very limited human and natural resources. The population in the emirates was quite small and many tribes led a nomadic type of desert life. UAEs current position both in the gulf region and globally, has been very striking and as Al Abed and Hellyer suggest, The UAE economy has witnessed several phases of growth and development. (Abed  Hellyer 2001, p.231). The main economic activities revolved around fishing, pearling, livestock keeping mostly of camels, traditional manufacturing of dried foods, weaving of rugs and carpets, making of tents and gowns, as well as swords and daggers. Subsistence agriculture was also practiced whereby poor farmers cultivated dates, fruits and vegetables for household use and the local market ((Abed  Hellyer 2001, p.208). There was no road network or basic amenities and the only remarkable building was the rulers fort which was located on the Island in the current location of Abu Dhabi city. For expatriate workers manning the oil exploration companies to reach their work destinations, they had to be flown in small aircrafts from Kuwait and Bahrain. Due to lack of infrastructure, these aircrafts landed on poorly constructed runways made up of a mixture of flattened sand and oil (Abed  Hellyer 2001, p.231).  But oil production has led to a very dramatic growth and by the beginning of the 21st century the population of Abu Dhabi alone had grown from less than 20,000 people in 1966 to approximately 600,000 people living in a modern Manhattan style city with high-rise buildings, tree-lined streets and spacious gardens and parks. The oil and gas industries have been cautiously managed in such way that oil wealth has helped the entire nation to achieve a considerably high standard of living with public amenities and services that are as advanced as those in the major cities of the developed world (Marshall Cavendish 2006, p.532).
Oil is discovered in UAE
    Although oil prospects in UAE dated back even before WWII broke out in 1939, UAEs oil export business took longer to establish when compared to other Gulf States. This is largely because oil exploration was halted by the war and when the war ended and exploration resumed, the oil exploration companies concentrated their efforts towards other regions like Bahrain, Kuwait and Qatar where the prospects of hitting oil appeared much higher and Abu Dhabi had to wait (Abed  Hellyer 2001, p.231). In 1962, Abu Dhabi finally joined the family of oil exporting gulf regions and oil production marked the beginning of a very rapid transformation of this emirate. As oil exploration progressed, more oil was discovered in the Zakum oil fields in 1965 and within the next two years, the emirate had become an oil exporter. More oil fields were drilled in Dubai and Sharjah in 1969 and 1970 respectively, ushering the UAE economy into the world of foreign trade (Abed  Hellyer 2001, p.209). Oil production and associated activities then began to shape the development and evolution of this economy in such way that beginning from the 1970s, oil export became a huge source of wealth for UAE and government revenue shot up tremendously as a result of oil wealth (Anonymous 2009,  13).
(Pro-argument) - Positive effects of oil in UAE
    Among the OPEC oil producing nations, UAE is currently holding the fifth position with a recorded 2.6 million barrels of oil produced everyday in the year 2008. Out of these, 85 of the oil came from the emirate of Abu Dhabi while Dubai and Sharjah produced the remaining 15 (Anonymous  6). According to Nyrop, The other four shaykhdoms  Ras al Khaymah, Ajman, Umm al Qaywayn, and Fijayrah  have little hoe of discovering oil and therefore experiencing significant economic growth of social change. (Nyrop 2008, p.62). Yet these emirates have also undergone ample change thanks to the decision by the federal government to accord every emir with some degree of personal authority in the running of the larger UAE government. This model of government has not only helped to strengthen the political, social and economic sectors of the federation but has also ensured that oil wealth is collectively used for the improvement of the whole region (Abed  Hellyer 2001, p.208). One of the earliest and most remarkable achievements realized by this federal government was the May 1973 establishment of the UAE Monetary Agency a move that integrated all the seven emirates as well as the subsequent issuance of dirham as the UAEs national currency to replace regional currencies such as the DubaiQatari riyal used in the north and the Bahraini dinar which had been circulating in the emirate of Dubai. The Monetary Agency was later to be replaced by the modern UAE Central Bank in 1980 (Abed  Hellyer 2001, p.208).
    The 1970s was a very prosperous period for UAE and the entire region experienced very rapid GDP growth. During the 1980s and 1990s, the trend unfortunately changed to unstable, a change that was largely blamed on the unpredictable world oil prices. Currently, UAEs GDP has been surging with the credit largely going to surging world oil (Anonymous s 17). The rise in oil prices is still expected to continue with prospected prices rising gradually from US  61 per barrel recorded in the year 2009 to an average US 74 per barrel by the year 2010 (Anonymous s 11). Like many other Gulf States, UAE has a relatively small population and oil wealth has enabled the nation to realize a very high standard of living with a per capita income of US 40,417 recorded in the year 2007 by the IMF. Yet although oil and gas contributed 35 of the total GDP in 2007, the economy is also experiencing significant diversification and a fast growing business sector, the Dubai offshore banking units, as well as influx of investment banks have also had remarkable contribution towards current economic growth.  The tourism industry has also become a major player in UAEs economic growth especially due to the revenue collected through sporting events which attract a wealthy clientele into Dubai (Anonymous s16).
    According to an official US report, UAEs oil export earnings had dropped to about 3 billion a sharp fall to less than half of the monthly oil generated revenue in 2008. This fall in UAEs revenue also led to a decline in total OPEC earnings by nearly 40 to around 33 billion during the month of January 2009 (Kawach 2009, s 1- 5). But this fall in revenue did not affect UAEs oil production status her position as one of OPECs biggest oil earners stands. Her only rival is the Kingdom of Saudi Arabia which netted nearly 88 billion in oil exports in 2008. Based on that level, the UAE recorded a monthly average of 7.5 billion from oil income in 2008. Information gathered from OPECs annual reports indicates that, UAEs oil basket stood at an average 41.89 per barrel in January 2009, a figure which was slightly higher than the December 2008 average of about 38.60. This was however a sharp low compared to nearly 88.35 average price that the oil-producing nation had recorded in January 2008 and the record 131 average price during the month of August 2008 (Kawach 2009, s 6-15).
    Before the discovery of oil healthcare was generally very poor in UAE, and ordinary people sought medical help from traditional healers while the more affluent nationals travelled to Europe and the U.S.A for specialized treatment. This meant less privileged members of UAE society died from otherwise treatable ailments due to unavailability of a modern healthcare system. But oil generated wealth has helped to transform the healthcare system in UAE to such high standards that the country is currently home to some of the worlds best equipped hospitals. Today, all UAE nationals enjoy free treatment while non-nationals enjoy free maternity and emergency services. Other healthcare services are chargeable for all non-nationals. (Marshal Cavendish 2006, p.540). Oil wealth has also contributed to tremendous improvement of the welfare system to the extent that UAE nationals are now entitled to various welfare benefits which include free housing (Marshal Cavendish 2006, p.540). As Omeje states, The welfare provisions and allocations in the UAE have become sustainable to the point that even during periods of low world oil prices the state is able to fulfill its welfare commitments. This has helped to raise the peoples general standards of living and UAE nationals can now boast of a new life expectancy of 73 years for males and 78 years for females (Omeje 2008, p.221).
    Since the 1970s oil boom, the UAE government has not followed the trend that other Gulf States have adopted of building a magnificent military infrastructure but has instead channeled her huge oil generated revenues into economically productive programs that are geared at providing additional support to the vast social welfare program that the UAE government has adopted (Omeje 2008, p.23). Through free trade zones, the government has managed to attract a lot of foreign investment especially in the tourism, natural energy exploration, construction, and desalination and waste water treatment sectors. By combining high oil revenues and a wealth of very successful diversification programs especially by the larger emirates, the overall GDP growth has been very tremendous in recent years (Omeje 2008, p.222).  Yet, despite the successful development of other sectors of the UAE economy especially the manufacturing, construction and services sectors oil continues to dominate the UAEs economic growth with oil revenue contributing about 30 to the overall GDP. As oil outputs continue to rise, this natural resource is bound to remain the major contributor of UAEs economic growth for quite some time. Both federal and individual emirate administrations can give credit to oil wealth for healthier national budgets while strong oil prices and an expansive non-oil sector can also be credited for strengthening UAEs position on the international scene (Oxford Business Group 2006, p.35).
    Sudden growth of the oil economy has attracted both skilled and unskilled labor in such large numbers that there is rising concern that UAE nationals could be marginalized in their own country. In response to this growing concern, the UAE regime has engaged in the implementation of employment quotas for non-nationals in order to give the nationals enough room to run their economy (Oxford Business Group 2006, p.47-48).  To help the locals compete in the job market, education is also offered free of charge for all nationals and is also compulsory for all children between the ages of 6 and 12 years. Students are also provided with other necessities such as free school books, uniforms, transportation, as well as science and sports equipment. Besides constructing hundreds of elementary and high schools, the UAE government has also invested a lot of capital in a network of technical colleges, an expanding university system as well as a separate university for the women. These developments in the education sector have helped to improve UAEs literacy levels. Many local students also have opportunities to travel abroad for government financed further studies. Expatriates generally earn good money and private schools have also been constructed for the children of those who can afford their costs. Improved education and health sectors have especially been beneficial to UAE women whose status in society has changed as they get exposed to new career opportunities. The number of women graduates now matches that of male graduates and literacy for women has improved so much that three-fourths of all workers in government education and health-care institutions are women (Marshal Cavendish 2006, p.540-541). With improved education provision, the only thing that now hinders nationals from having jobs is their unwillingness to take up certain types of work especially in the services sector (Oxford Business School 2006, pp.48).
    The geography of UAE and her environment have also benefited from oil-generated wealth. Before the discovery of oil, UAE nationals had to struggle through the rough desert terrain as they moved from one place to another, usually for trade. But today, the infrastructure has changed and six-lane highways such as the one connecting Abu Dhabi and al-Ayn have transformed the transportation sector to match the infrastructure of other modern economies. These highways are beautifully constructed lined with thick belts of flowers that are well-watered. The government has also invested a lot of revenue in planting of trees and other attractive vegetation along these highways as a preventive method against the desert san dunes which used to bury the roads. Smaller emirates however continue to lag behind in the development of transport systems and paved streets and steep mountain paths are still a very common feature here (King 2008, p.10). The UAE government has also invested oil revenue in beautification programs for major cities through massive tree and grass planting, creation of fountains and parks, as well as widespread construction of air-conditioning facilities (Marshall Cavendish 2006, p.541). Despite the absence of natural deep water harbors on UAEs Persian Gulf Coast, oil wealth has enabled the emirates to construct very modern artificial harbors to substitute the three natural ones located on the Gulf of Oman (King 2008, p.9). Both UAE nationals and non-nationals can also enjoy superb sports facilities such as new racetracks, golf courses, yacht marines and athletic stadiums. UAE also became host to some of the worlds most esteemed sports tournaments such as the Dubbay World Cup where horse racers come to array their horses and the Dubbay Desert Classic which a golfing event. Other events include the Dubbay Open for tennis players and lovers as well as the Ash Shariqah Cup which is a cricket competition. Traditional dhow sailing and camel racing however remain a great attraction among the locals and have also become great tourist attractions (Marshall Cavendish 2006, p.541). The UAE has also used oil revenue to develop modern irrigation systems which substitute desalination plants to provide enough water for agricultural development in the oases and wadis. Today, the UAE has become a leading producer of dates palms and dates.  Cattle and sheep rearing, poultry keeping and other livestock farming have also been highly developed especially in the smaller emirates such as al-Fujairah (King 2008, p.10-13).
(Counter-argument) -  Negative effects of oil wealth in UAE
    Despite all the success that UAE as a nation has achieved through oil revenue, the government is still faced with very many challenges. Oil affluence appears to have attracted too much borrowing as is evident from the recent debt issue in Dubai. The emirate of Dubai caused great shake-ups to the massive world of international finance when Dubai World, an UAE private company and arm of the government requested for a 6 months suspension on its debts a clear indication that the company cannot keep up the payments. Much of this capital has been borrowed to facilitate the massive transformation of Dubai into one of the most impressive cities in the world. In the event of world-wide recession, most of the developed properties however remain unoccupied and the loans subsequently unpaid. Although the richer Abu Dhabi may move in to alleviate the situation, the confidence of the worlds financial establishments has once again been shaken and the Dubai saga could have very far-reaching global consequences (Brooks 2009, s1-14, 18). Despite all its success, the UAE is also faced with the major challenge employing a young and very fast-growing population whose literacy levels have been improved through a well-developed education system. According to the Oxford Business Group, About half of all UAE nationals are the age of 21 and the local workforce is growing by an estimated 4-5 annually. Heavy reliance on foreign labor especially in Abu Dhabi and Dubai has however ignited the government to engage in promotion of emirate labor in order to prevent long-term shortages of skilled labor (Oxford Business Group 2006, p.36). The influx of foreigners has also posed the challenge of new ideas, customs and beliefs among the rulers and general population. Some of these ideas which originate from the West have been a great challenge to traditional Islam. As King suggests, Another thorny issue involves finding ways to incorporate hundreds of thousands of newcomers from other parts of the world into UAE society without destroying their traditional Arab customs and values (King 2008, p.31).  Muslim extremists who try to fight for the restoration of the Arabian Islamic homelands have also been a source of challenge as they try to oppose the high rate of foreign immigrants into UAE (Marshal Cavendish 2006, p.532). The vast growing economy has also led to high rates of inflation with expatriate workers suffering from accommodation shortages and soaring rents especially in Abu Dhabi and Dubai. Although the government has tried to increase salaries, rising oil prices have not made the situation any better and inflationary pressures have been on the increase since 2006 (Oxford Business Group 2006, pp.36-39)
Rebuttal - Benefits of oil outweigh the negative effects
    Nevertheless, oil has played such an important role in transforming the UAE economy that the society and entire state have experienced very rapid and dramatic transformation during the last few decades (Omeje 2008, p.221). Oil exports have helped to transform UAE from a generally backward desert region into one of the worlds booming economies. Because UAE owns approximately 10 of the worlds total oil reserves, there is no doubt that this natural resource will continue to transform both UAEs economic growth as well as social services expansion for many decades to come (Marshall Cavendish 2006, p. 535). UAE has made great steps towards diversification to avoid over-reliance on oil revenue and today, tourism, construction, commerce and transportation have also become major sources of employment in this oil-rich economy    (Omeje 2008, p.222).

    Prior to independence, the emirates were both economically and socially backward and lacked basic and essential needs in health, education as well as housing services. By Contrast, the UAE has today made very major economic, political and social strides to the extent that it can now be grouped among the high-income countries on the criteria of both the GDP and Human Development Indexes. But despite such tremendous achievements, the UAE continues to rely heavily on income generated from oil and although the non-oil sector has expanded tremendously since 1982, it is still highly linked to oil production and dependence upon oil is still quite large. This has made any reduction in oil revenue and subsequent reduction in wealth to have negative impact on the non-oil GDPs overall performance. Oil production has also made UAE to be highly dependant on expatriate labor such that her current population and labor force are largely foreign. This has not only posed major challenges in decision making within the social and cultural sectors but has also become an economic problem as well (Abed  Hellyer 2001, p.223).