Business24-7- When oil prices were as low as $10-20 a barrel two decades ago, the UAE seriously considered borrowing from the local market to finance its swelling budget deficit. But the plan was shelved in favour of painful spending cuts.

Such reductions, however, could not be maintained for a long time because of the rising domestic development needs and a seven per cent growth in the population. As a result, the deficit in the country sharply widened.

Yet authorities still never considered borrowing or introducing income taxes for two reasons: the country’s petrodollar income was swelling and a gigantic overseas investment empire was taking shape.

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