Human Capital Development in the UAE: Analysis of the Budgetary Conflicts in an Era of Austerity

Abstract

This paper examines the manner in which the government of the UAE 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 diverted funds from human capital development? Did the funding, for education suffer in proportionate 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.