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Where the UAE’s Money Goes

December 23rd, 2014 · No Comments · Abu Dhabi, Dubai, The National, UAE

The Federal National Council is looking at the UAE national budget for 2015, and raising some questions.

–Why does nearly every federal department spend more than 80 percent of its money on salaries?

–Why are Abu Dhabi and Dubai the only contributers to the federal budget, from a country with seven emirates?

Short answers?

Federal agencies tend to hire Emiratis, and Emiratis are paid even higher salaries than are expats, most of whom are making more money than they would at home.

Abu Dhabi has most of the money, and Dubai has some, and the “northern” emirates (as they are known), listed in ascending order of obscurity — Sharjah, Ras Al Khaimah, Fujairah, Ajman, Umm Al Quwain — pretty much live off the money the other two send to the federal budget.

According to this story in The National, Abu Dhabi is contributing 17 billion dirhams to the federal budget (about $4.6 billion), and Dubai is allocating 1.2 billion ($330 million).

The other five? Nothing.

Where the rest of the money for the proposed 49.1 billion (about $13.4 billion) budget for 2015 will come from is not clear, from the story, but rest assured a large chunk of it can be traced back to Abu Dhabi.

Abu Dhabi is where the oil is, mostly in the western half of the emirate, from the capital city over to the border with Saudi Arabia. Dubai had some oil, but it is nearly gone, and most of Dubai’s wealth these days comes from business, real estate and tourism.

The other five emirates have neither oil nor extensive business dealings, and they pretty much count on the money Abu Dhabi, especially, contributes to the federal system, which came into effect only in 1971, when the country was formed.

That would explain why the ruler of Abu Dhabi is always the president of the country, and the ruler of Dubai is always vice president. Seems only fair that those who are paying the bills should get to run the system.

Those two emirates prop up the federal budget which, as noted earlier, is mostly about paying salaries, mostly to Emiratis.

 

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