POLITICAL The political scene in the UAE appears as though it will remain stable. The president, Sheikh Khalifa bin Zayed Al Nahyan is expected to continue with the UAE’s relatively liberal economic and social policies. Foreign policy of the UAE is expected to concentrate on further improving relations with Western allies as well as commercial ties with Iran. As a result of oil wealth, Abu Dhabi will maintain itself as the dominant political force of the UAE. However, the rulers of each of the seven emirates will continue to have complete automony over their respective states. ECONOMICAL In order to attract more foreign investment the government is expected to impose fewer trade controls, provide solid infrastructure, and communicating a positive attitude towards private sector investment. The strengthening of the US Dollar in mid 2008 has enchanced the fix-peg exchange rate policy and will contribute to reduced to inflation, although monetary policy may be constrained by the peg. However, since oil production has been cut and prices are lower, export earnings will not be as high as in previous years. The current account will experience a surplus in 2010 due to non-oil export revenue, but is anticipated to move to deficit in 2009 due to reduced export earnings on both goods and services. It is expected that the government will maintain high levels of spending through 2013. Should the federal budget fall into deficit, the UAE will be able to use its foreign invested oil revenue to compensate. Real GDP growth is forecaseted to average 5% a year through 2013 . However, due to the decline in construction and investment growth may slow in 2009. By 2010 growth will recover. Increased housing supply and decreased demand should reduce rent costs in the UAE. The world recession will eventually lead to a drop in food and commodity prices. The UAE has an open economy which has allowed it to generate a high per capita income (with the help of oil). In recent years the UAE has been successful in diversifying its economy thereby reducing its dependence on oil. Job creation and infrastructure has been the source of significant government spending in attempt to further increase diversification. As well, the utilities sector has been opened up to allow more private sector involvement.