- January 1, 2013 • Knowledge@Wharton • Editor
The United Arab Emirates (UAE) has sought to become a globally competitive economy since its founding in 1971. The country’s oil wealth and forward-thinking approach has allowed it to progress toward this goal through capital-intensive economic initiatives, social programs and legal reforms.
The UAE’s leadership considers economic diversification a necessity in order to protect the country’s economy from oil-price fluctuations and to diversify sources of income. Sheikh Zayed bin Sultan Al Nahyan, the founder of the UAE and ruler of Abu Dhabi until his death in 2004, believed that “future generations will be living in a world that is very different from that to which we are accustomed. It is essential that we prepare ourselves and our children for that new world.” This diversification is needed as public sector employers have become saturated, with some ministries spending as much as 92% of their budgets on salaries. Given these factors, Sheikh Zayed announced his intention to transition the country from an energy-based economy to a knowledge-based economy, dependent not on natural resources but on competitive, highly educated human