ABU DHABI - The Formal State Structure.

Abu Dhabi has an elaborate - but now streamlined - system of government, with an Executive Council (local cabinet) focusing on the emirate's needs and an annual budget far bigger than the federal budget. Beneath the crust is a modern technocratic structure increasingly filled by young Abu Dhabian university graduates, notably including the younger full-brothers of Crown Prince and Executive Council Chairman Shaikh Mohammed Bin Zayed.

The emirate has maintained some traditions, however, and the ruling family is closely associated with tribal clans through various institutions and collective decision making councils. These bodies are in the following order of importance:

The Emiri Diwan (court), of the ruler Shaikh Khalifa Bin Zayed, which has two main branches: one in Abu Dhabi City at the UAE Presidential Palace, being the highest seat in the union of seven emirates (the UAE), and one in al-Ain.

The Diwan of the Crown Prince, Shaikh Mohammed Bin Zayed, who is the new ruler's half-brother, is the second highest office in the emirate.

The Executive Council (local cabinet), with the number of departments (ministries) reduced to seven on Dec. 8, 2004, is chaired by Shaikh Mohammed Bin Zayed. Two of Shaikh Khalifa's sons are on this council: Shaikh Sultan Bin Khalifa and Shaikh Mohammed Bin Khalifa.

The National Consultative Council (local parliament), appointed by the ruler consists of representatives of the main clans of Abu Dhabi.

The SPC, an autonomous body and ruler of the hydrocarbon sector.

The Abu Dhabi Investment Authority (ADIA), an autonomous body.

The Municipal Council, mainly consisting of a municipality for each of Abu Dhabi and al- Ain.

The UAE Supreme Defence Council, in charge of the federal military establishment in which the day-to-day overseer is Shaikh Mohammed Bin Zayed.

The judiciary includes Egyptian judges or religious ulema. But the number of Abu Dhabians in this sphere is increasing.

The Emirates National Identity Authority (ENIA), one of the federal bodies. After a federal decree issued on Dec. 29, 2004, by Shaikh Khalifa Bin Zayed, a board of the ENIA was formed under the chairmanship of Shaikh Mohammed Bin Zayed. The deputy chairman of this board is Shaikh Saif Bin Zayed, Mohammed's full-brother and UAE minister of interior who has the military rank of major general.

The federal cabinet had its biggest shake-up for a generation on Nov. 1, 2004. The reshuffle saw ministerial mergers, the most notable being the creation of an Energy Ministry which took over petroleum and mineral resources as well as the power and water portfolios. Younger technocrats were elevated to ministerial posts.

The UAE's first female cabinet minister, Shaikha Lubna Al-Qassimi, was put in charge of federal economy and planning. In her forties, Shaikha Lubna is a business administration graduate from California State University. She had proved herself as a successful businesswoman. She had built a business that was active across the Middle East, and her participation in events such as the World Economic Forum meetings was proof that educated Arab women could hold their own with the world's top professionals.

An emirati from Sharjah, Shaikha Lubna was promoted by Shaikh Mohammed Bin Rashid in Dubai. (Women are being accepted into the cabinets of the GCC governments. Bahrain, Oman and Qatar each have female ministers managing portfolios such as health, education and local crafts. But Shaikha Lubna was the first to be appointed to lead a ministry that carried the international prestige of economy and planning).

Other key changes in the federal government, included the creation of a "ministry for presidency affairs". The portfolio went to Shaikh Mansour Bin Zayed who until then served as the UAE president's chief of staff and already had ministerial rank. On Nov. 1 he became a full member of the federal cabinet.

Another bright son of the late Shaikh Zayed, Maj. Gen. Saif, was elevated from interior ministry undersecretary to interior minister. A more senior full-brother, Hamdan, remained deputy prime minister and minister of state for foreign affairs, effectively in charge of foreign policy despite the presence of a foreign minister, Rashed Abdullah Al-Nuaimi, who was unchanged.

The cabinet reshuffle also made the UAE the first member of the Arab Gulf Co-operation Council (GCC) to put a minister in charge of GCC affairs at a time when the six-member bloc was trying to move towards economic integration. Shaikh Fahem Bin Sultan Al-Qassimi, who was economy minister before the reshuffle and a one-time secretary general of the GCC, now handles GCC affairs as well as those of the country's ruling Supreme Council. The defence post remained with Shaikh Mohammed Bin Rashid, the driving force behind Dubai's multi-billion-dollar bid to become the region's business and leisure hub. Shaikh Nahyan Bin Mubarak remained in charge of education at the head of a ministry now combining a full range of education-related fields previously overseen by two ministries. The information ministry remained under Shaikh Abdullah Bin Zayed. Ali Bin Abdullah al-Ka'bi was given the labour and social affairs portfolio in a 21-member cabinet, succeeding Hmaid Al-Tayer, who was dropped.

Now there is an unprecedented economic boom throughout the UAE in view of high oil prices and resulting rise in local income. Abu Dhabi investors have been at the forefront of transforming Dubai's hotel and real estate landscape. Similarly, numerous Dubai corporates would not survive without a steady stream of orders from Abu Dhabi.

The UAE economy grew 9.4% annually between 2001 and 2004, according to the National Bank of Dubai's latest quarterly report published on July 30, 2005 - with the growth rate in 2005 expected to be higher. The report provided a resoundingly upbeat assessment of the UAE's economic performance, with "remarkable growth" expected to continue for five more years.

The report examined the UAE economy since 9/11. It revealed the UAE's ability to resist a global slowdown in 2001-02, as well as to take advantage of an upturn. The UAE's economy expanded across all sectors - oil and non-oil related - during the 2001-04 period. The report showed the increasing contribution of the non-oil sector.

The non-oil sector's share of the federal economy grew from 71.1% in 2001 to 77% in 2004. This was despite the significant rise in oil prices during the period. The nominal contribution of oil - which is its contribution ignoring the effect of inflation - grew during the period from Dh75 billion to Dh123.3 billion. The most remarkable growth areas have been in manufacturing (between 9% and 15%); trade (15.6% average annual growth); finance (12% annual average growth) and electricity, gas and water (10% average annual growth).

To put this growth in perspective, while the hospitality sector has been growing rapidly and highly visibly in relative terms, its contribution to the non-oil sector has been in decline. It fell from 3% in 2001 to 2.8% in 2004. A second area of decline in terms of overall GDP has been agriculture, which fell from 5% in 2001 to 4.4% in 2004. But the UAE's agricultural output represented a triumph of will over adversity.

The UAE does not possess the characteristics for agricultural production, and it has been through government subsidies that crops, livestock and fishing have become important parts of the economy. The sector's decline has been attributed to severe weather and the competition from cheap imports.

Key to the success has been "the confidence level that economic participants have in the country's economy". This confidence has helped it to remain resilient to the political and economic shocks which have affected the rest of the world.