[dcolkitt]

I mostly agree with this post, but have to point out that the UAE is not a unitary polity. It's a loose confederacy of seven related Sheikdoms, with a wide range of policy and level of development.

Almost all of that wealth is concentrated in the sovereign wealth fund of the emirate of Abu Dhabi, because Abu Dhabi has by far the largest oil reserves. Next is Dubai, which has much less accumulated in its sovereign wealth fund, because it's nearly run out of oil. However it's done a lot to diversity its economy into finance, services, and tourism.

But as for the other five emirates, the picture is much more bleak. Nor is it like the US, where finances or taxation are co-mingled on the federal level to any serious degree. If California generates a lot of wealth relative to Alabama, you'd expect a lot to be redistributed. But Abu Dhabi will not be sending any of its enormous wealth holdings to Sharjah by any means.

[arjun-menon]

You’re partly right, but there are actually a fairly significant amount of lateral transfers to other emirates (through the federal budget, which is mostly funded by Abu Dhabi). Things like the electricity and water system are run federally (by FEWA - the Federal Water & Electricity Authority) in 4 northern-most emirates. Many other benefit systems are also mostly funded by Abu Dhabi, and primarily for the benefit of the citizens of other emirates — one example might being the Sheikh Zayed Housing Programme. Abu Dhabi actually does help the nationals in all the emirates.

[dcolkitt]

Thanks for pointing this out! I wasn't aware of that.