ABU DHABI - Pax Americana Is Changing - Part 19A.

Under Shaikh Zayed Bin Sultan Al-Nahyan since the 1960s, the political leadership in Abu Dhabi has played a crucial role in boosting the local economy and the welfare state for the federation. The leadership has always given the petroleum sector of Abu Dhabi top priority, offering to foreign investors the best incentives in the region. Abu Dhabi produces about 94% of the UAE's 2.5 million b/d of crude oil output.

When Shaikh Zayed died on Nov. 2, 2004, this came as a big shock to everyone in the UAE, though it had been known to all that the 86-year-old ruler's days had been numbered. As MEED noted on Jan. 21, here was "a man who had been the one constant in over 30 years of unprecedented change, an era that saw the creation of the federation, unimaginable oil wealth and continual upheaval across much of the region". Such was Shaikh Zayed's influence that many wondered how the vacuum he left could be filled.

The Transition To Khalifa: Shaikh Zayed, however, had already made all that was required for a smooth transition under his first son, Shaikh Khalifa, and the first son from his favourite wife Shaikha Fatima, Shaikh Mohammed as his crown prince and deputy and as head of the Executive Council (local government).

Dubai's strongman and its Crown Prince, Shaikh Mohammed Bin Rashid Al-Maktoum, moved swiftly to Abu Dhabi to be on Khalifa's side. According to Shaikh Zayed's wishes, Shaikh Mohammed Bin Rashid first made sure that Shaikh Khalifa was immediately proclaimed Abu Dhabi ruler, as a natural successor following a long apprenticeship, and his half-brother Mohammed Bin Zayed as crown prince.

As all the seven UAE rulers gathered at Al-Bateen Palace after Zayed's funeral, on Nov. 3, Shaikh Mohammed made the sudden move of declaring that Shaikh Khalifa will succeed his father as president of the UAE - although normally this should be done by election within the rulers' Supreme Council. Agreement on this was unanimous simply as all went silent and Shaikh Mohammed snapped: "Good, this is settled". No one said anything for the next half a minute. Then one after another the other six rulers congratulated Shaikh Khalifa with a kiss.

In return for this quick but crucial move, Shaikh Mohammed Bin Rashid has become Shaikh Khalifa's closest ally and adviser. As a result, the Dubai strongman now has the wealthiest man in the world on his side, with his elder brother Shaikh Maktoum being the vice president as well as prime minister of the UAE.

A new chapter has thus begun in the history of the UAE and Abu Dhabi. A smooth succession was followed by the start of far-reaching changes. On Dec. 8, Shaikh Khalifa decreed the biggest restructuring in the Abu Dhabi government for decades, drastically reducing the number of departments and the size of the Executive Council, as well as injecting new and younger blood.

Shaikh Khalifa's appointment of Mohammed Bin Zayed as Executive Council chairman underlined the pivotal role the crown prince was to play in Abu Dhabi's decision-making system.

Two others of Mohammed Bin Zayed's 18 full-brothers, Shaikhs Said and Hamed, as well as two of Shaikh Khalifa's sons, Sultan and Mohammed, were also appointed as department chairmen. Among the young technocrats, Mubadala's CEO Khaldoon Al-Mubarak (Hamed Al-Suweidi) was made chairman of the Organisation & Administration Dept. Ju'an Bin Salem Al-Dhahiri was elevated from under-secretary of the finance department to chairman of the Department of Social Securities & Commercial Buildings (previously known as the Khalifa Committee). But Dhahiri is no longer a member of the Supreme Petroleum Council (SPC).

Although adopting a lower profile than his father, Shaikh Khalifa was judged capable to take over. Having been crown prince of Abu Dhabi, by far the wealthiest emirate in the UAE, for more than 30 years, Khalifa had effectively been in charge of day-to-day affairs in Abu Dhabi from the mid- 1990s and, in recent years, frequently stood in for his father at high-level meetings at home and abroad.