--2008

Only two decades ago, few foreigners would have viewed this loose federation of seven independent sheikhdoms, strung out along the southeastern corner of the Persian Gulf, as a land of opportunity. But thanks to the world’s fifth-largest reserves of crude oil and natural gas, an estimated $1 trillion of investment abroad, and plans to spend at least $200 billion over the next decade on infrastructure and other grandiose projects in Abu Dhabi and Dubai, the two most dynamic emirates, the UAE has burst into the world’s—and belatedly, America’s—consciousness.

Most Americans had heard of Dubai. But far fewer knew much about either the emirate of Abu Dhabi or its eponymous capital city (also the capital of the federation as a whole). Recently, however, Abu Dhabi—with 95 percent of the UAE’s oil, 85 percent of its land, and over half of its gross domestic product—has emerged from the shadow of its more flamboyant neighboring sheikhdom and friendly rival. In late November, the normally risk-averse emirate’s Abu Dhabi Investment Authority, the world’s largest and most secretive sovereign wealth fund, bought a 4.9 percent share of troubled Citigroup. That was just one of hundreds of American and other foreign companies in which the diversifying emirate has invested in recent years.

While the Citigroup purchase highlights its growing financial clout, Abu Dhabi’s most remarkable investment is in human development. The emirate is determined to modernize its young, traditionally conservative, underskilled population—to mold future citizens secure in their Islamic heritage but able to flourish in an increasingly globalized and diverse world. Muslim Abu Dhabi is racing into the future. True, Abu Dhabi, like the UAE as a whole, has a system of government that is tribal and undemocratic, blending family, business, and administrative interests in inseparable and impenetrable ways. But the emirate’s commitment to the education and cultural advancement of its people makes it a relatively bright spot in the Arab Middle East, where oil wealth has too often brought conflict and misery.