Human capital development in the UAE: Analysis of budgetary conflicts in an era of relative austerity

This paper examines the manner in which the government of the United Arab Emirates adjusted to declines in oil revenues in the mid- to late 1980s. Specifically, was the government able to support the continuation of investment in human capital that began after the oil price increases of 1973/74? In this regard, what were the main budgetary tradeoffs associated with educational expenditures? Did the country’s high levels of defense expenditure significantly divert funds from human capital development? Did the funding for education suffer in proportion to other major expenditure items during the current period of relatively slack oil revenues? Based on the answers to these questions, several conclusions are drawn concerning the ability of the country to reduce its dependence on foreign workers.