A Smooth Succession

Economic News

22 Jul 2010
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As the United Arab Emirates (UAE) continued to mourn the death of Sheikh Zayed bin Sultan al-Nahyan this week - a loss felt keenly throughout the region - attention was also beginning to focus on his successor. The new president will both benefit from the achievements of Sheikh Zayed - and have a tough task in following up the deceased ruler's powerful legacy.



Shortly after the state funeral on October 3, the UAE's Supreme Council met to unanimously elect Sheikh Zayed's son, Sheikh Khalifa bin Zayed al-Nahyan, as the country's new president. Sheikh Khalifa had previously been ruler of Abu Dhabi. That the rulers of the seven emirates had approved the succession so smoothly also came as a relief to many, successfully putting to rest any fears of a disputed change over. Many of these fears had arisen due to the fact that there had been no precedent for the succession, as Sheikh Zayed had been the UAE's founding ruler.



Sheikh Khalifa now has the task of continuing his father's tradition, which had seen Sheikh Zayed become one of the Arab world's most revered leaders - both regionally and internationally. His success in developing the original collection of independent emirates into a single successful state was widely commented on in the thousands of tributes that flooded into the Emirates after his death had been announced.



Sheikh Khalifa does have a long pedigree too, however, of successful administration. Born in the inland oasis-city of al-Ain in 1948, in 1966, following his father's accession as ruler of Abu Dhabi, Sheikh Khalifa was appointed as the ruler's representative in the Eastern Region of Abu Dhabi and as head of the Courts Department in al-Ain.



Three years later, he was nominated crown prince of Abu Dhabi, soon after which he became head of the Abu Dhabi Department of Defence. His role here has been widely praised in developing the Abu Dhabi Defence Force (ADDF) into a force which could later provide the nucleus for the UAE Armed Forces. Sheikh Khalifa was himself to have a leading role in the later army, when in 1976 he became deputy supreme commander of the UAE Armed Forces.



In 1971, Sheikh Khalifa became prime minister of Abu Dhabi and minister of defence and finance. Two years later, he was deputy prime minister in the short-lived second UAE federal cabinet. When this was dissolved, in 1974 he became first chairman of the Abu Dhabi Executive Council, which replaced the Emirate's cabinet.



It was here that Sheikh Khalifa also made his mark, playing an important role in setting the organisational groundwork for the Emirates subsequent take off. In 1981, he established the Abu Dhabi Department of Social Services and Commercial Buildings, which provided loans to citizens for construction purposes. Since then, this department has loaned some Dh35bn, providing financing for over 6000 multi-storey buildings. Ten years later, the Sheikh also played a leading role in the creation of the Private Loans Authority, which similarly provided financing for construction projects.



Repaying loans was also a concern for the Sheikh, who established the "Khalifa Committee" in 1979, tasked with helping construction firms meet their repayments to commercial banks. This involved a fixing of interest at 0.5% for such firms, with the balance being paid by the government.



Yet it is not only in construction that the sheikh has had an important role. He has also been central in the UAE's drive towards diversification away from dependency on hydrocarbons. Since the 1980s he has been chairman of the Supreme Petroleum Council, involved in the development of the downstream petrochemicals and industrial complex at Ruwais.



Now, analysts and Emiraties are wondering, however, whether the new sheikh will make any significant changes to the UAE's policies and direction. On balance, most seem agreed, this is unlikely.



"The Supreme Council Members emphasised their keen desire to be loyal to the principles of leadership and the values of justice and right laid down by the late His Highness Sheikh Zayed bin Sultan al-Nahyan," an official statement from the council stated following Sheikh Khalifa's election. "The Supreme Council also expressed its full confidence that the people of the United Arab Emirates will continue to be the guardians of the UAE federation and of its achievements at all levels."



Sheikh Khalifa is known as a strong supporter of the Gulf Cooperation Council (GCC) and of inter-Arab efforts to secure peace and stability in the region.



Domestically, he has been widely quoted in the UAE press as saying he will continue with the "open door" policy, the practice of holding regular consultations with the country's citizens.



Given his background, he also seems well placed to continue both with moves towards diversification from the energy field and the continuing development of the country as a global business hub.



Yet his father will be a difficult act to follow. Sheikh Zayed's undoubted charisma was a central factor in the creation of the UAE and its continued success. Sheikh Khalifa is widely respected for his competence in administrating - now he must show his strengths as the leader of a country still in mourning.

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