Question: We are celebrating National Day, the 35th anniversary of the formation of the United Arab Emirates. What does this occasion mean to Your Highness?

Sheikh Mohammed: This is a historic day and the start of the first page of the book of glory, honour, building and progress. On this day, all that is good, faithful and generous combines with the characteristics of important and great nation-builders.

The federation springs from our belief in unity and cooperation. It is the embodiment of our fathers' desire to build a structure under which generations could take shelter, protecting and adding to it. It also embodies the wise vision of our fathers - their dream, their generosity of spirit and their ability to understand people of all kinds. It is the embodiment of confronting difficulties, overcoming obstacles and conquering the impossible. It embodies the generosity of the men who sacrificed their lives and potential in the service of this country and its people. That is what this day means. This day should include a moment to reflect on what has been achieved and what remains to be done.

Thank Allah for guiding us through the formation of the federation from its very beginning in February 1968, when my father Sheikh Rashid and Sheikh Zayed met in an area that lies between Seeh Shu'aib and Al Siderah and agreed to form an alliance between Abu Dhabi and Dubai. This alliance was the nucleus for the federation of the emirates that make up the UAE. Those who lived through those days and were part of the process realise the greatness of this achievement and its history and of those who made it happen.

Question:  You were present during the lives of the founders of the federation, the late Sheikh Zayed and the late Sheikh Rashid. What did you learn from them? How did you translate their thoughts and visions into action?

Sheikh Mohammed: I learned a lot from them. I learned that impossible is just an illusion for the incapable, the hesitant and the weak. I learned that man is created to fulfil his destiny: If you are a leader, you have responsibilities and duties towards those you lead; if you are a Ruler or President or King, you are the first to be responsible for your country and to your people, you have to bear this responsibility with skill and honour.

It was from them that I learned the proverb, "The people's eldest is their servant", who is responsible for their security, comfort and prosperity and who does his utmost, to the best of his abilities and potential, to please them, to raise their standing. I learned optimism, because in the end the waves shall crash upon the shore and goodness is man's natural state while evil is a temporary aberration. I learned that responsibility is more than just a title. And that whenever you shoulder your responsibilities successfully, you receive more honour. I learned how to look further than others, to foresee what others do not see, to proceed with confidence and determination and to aim for the goal and achieve the objective.

I learned that life is an ongoing process of learning, that you should learn something new everyday, that there is no limit to knowledge and that you can never learn enough.

Question:  The UAE is experiencing an economic boom that is affecting every sector. Do you believe this boom is temporary and that it is associated with high oil prices? Will the country reach the stage where it is not dependent on oil as a primary source of revenue?

Sheikh Mohammed: I'd prefer to call it economic growth rather than a boom. It is not associated with the rise in oil prices, because for years oil has not amounted to more than 5% of Dubai's Gross Domestic Product. Furthermore, the development in Dubai occurred when oil prices ranged between $15 and $18 per barrel. Undoubtedly, the increase in oil prices strengthens development. However, in the UAE we learned lessons from the early 1980s when oil prices dropped to $10 or even less. Now the UAE's economy is less affected by the oil price fluctuations. For Dubai, this effect is very small. Oil's contribution to the UAE's GDP has fallen to around only 27%.

Question:  Everyone talks about the revolution that His Highness Sheikh Mohammed bin Rashid Al Maktoum has brought about in the federal government since he assumed the post of Prime Minister. Firstly, what steps did you take to improve the federal government and to fight the bureaucracy that government departments suffer from? Secondly, what has been achieved so far in terms of the federal ministries? Are these achievements in line with your ambitions? Thirdly, how do you see the future of the federal government in light of overall international developments?

Sheikh Mohammed: I don't like to talk about the government's achievements; I'd rather let these achievements speak for themselves. However, the government is now about 10 months old, and I am satisfied with what we have achieved in this short span of time, from restructuring the Cabinet to suit our reality and future objectives to introducing the strategic plan for the UAE, the plan to develop the federation's resources and plans to develop government performance, the Federal National Council elections, settling the issue of the Bidoun (those who are stateless), forming the ministerial council for services, dealing with the bottlenecks in government procedures and the interactions among ministers, granting ministries administrative and financial independence and, for the first time, announcing the federal budget three months before the beginning of the new year.

Several important laws have been issued, including the consumer protection law, the law condemning human trafficking, procedures governing the organisation of the labour market, other binding procedures for nationalisation in the private sector, starting the process of reviewing and developing legislation related to the economy, raising the budget of the General Authority of Youth and Sports to Dh.100 million with a 10% annual increase and providing teachers with benefits such as housing and shares.

I do not want to continue. I ask you in the media to follow and assess the government's achievements, isn't that part of your job?

Question:  You began your post as Prime Minister by visiting various emirates to inspect and review work in the ministries, institutions and federal government offices. But these tours stopped recently; have your previous visits proved fruitful? When will Your Highness resume these field visits to federal ministries, institutions and offices? What were the most exceptional situations you faced during your visits?

Sheikh Mohammed: The visits haven't stopped. They are part of our work. We are keen to meet citizens in all parts of the country and to learn about their needs and the condition of the services in their areas - there are likely to be needs and deficiencies as society grows and services have to be kept up to date with this growth. The ministerial council for services follows up on the implementation of completion and replacement plans. The Ministry of Government Sector Development follows up on plans for developing human resources and on the performance of the ministries and offices in all parts of the UAE.

Question:  The local government in Dubai has achieved great progress in government administration and in introducing the latest technology to government work. Is it possible to apply Dubai government's experience to the federal government?

Sheikh Mohammed: Yes, the federal government benefits from Dubai's achievements in government administration and from any other achievements in other fields, whether in Dubai, Abu Dhabi or the other emirates. This is to be expected; whatever Dubai achieves is for the benefit of the country and all its emirates. Moreover, our experiences and expertise are available to all our brothers. They come to us and we give them what they ask for.

Question:  Most local governments in the UAE have set up authorities and establishments to replace federal ministries, such as health departments and authorities, education-related authorities, local judicial authorities, tourism authorities and other local authorities. Does this mean that the federal ministries' roles will be reduced in favour of the local institutions? What purpose will these ministries serve if local institutions and authorities take over their responsibilities?

Sheikh Mohammed: They are not replacements for the federal ministries nor are local establishments taking away from the role of the federal institutions. I advise anyone who thinks this to read the constitution carefully. The federation single-handedly both legislates and implements laws in several areas; it is also responsible for legislation in other areas.

I understand that some prefer that everything be centralised. From the very beginning, in line with the federation, our choice has been to have both centralisation and decentralisation, but to lean more toward decentralisation. This choice has contributed to the building of our federal structure and allowed for greater flexibility and ability to develop and react to new developments. The combination of centralisation and decentralisation is one of the factors that have led to the federation's success and the UAE's advancement.

Today, even in simple states that consist of one region like Egypt and Jordan, they are reviewing their policies to develop and give greater power to local governments in the various areas and big cities so that they can supervise development plans and services for sectors such as education and healthcare directly.

Question: International organisations have produced several reports on the conditions of expatriate labourers in the UAE - some of these reports are negative or harmful and do not do the country justice. Firstly, how does the government deal with these reports? Secondly, why do these organisations focus on the negative when there are countless positive aspects as evidenced by the steps the government has taken recently?

Sheikh Mohammed: The UAE's progress, reputation and renown have made it the focus of international attention and of locally-based international organisations concerned with human rights.

We deal with these reports in an objective manner. We thank them for calling our attention to a certain issue or problem if they introduce it objectively. On the other hand, it is not objective to introduce falsehoods, which we seek to correct by communicating with the responsible parties and inviting them to visit the country and meet with officials and see things as they really are, not as is imagined by some people. As for the reports on expatriate labourers, some of them are exaggerated. The most recent reports were based on interviews with less than 60 labourers and on quotes from English newspaper reports that dealt with individual incidents and then generalisations were made about the conditions of labourers in the UAE. This cannot be... in any market in the world, including that in the UAE, there are violations and accidents on site. Some contractors may experience temporary insolvency and some companies may fail but this affects less than one in one thousand expatriate labourers. How can this be generalised to all labourers? Recently, I read in Newsweek that in the US there have been over 100,000 deaths due to medical mistakes and about 2,500,000 harmed by inaccurate prescriptions. Should we stigmatise the medical services in the US by claiming that they're bad when they are the most advanced worldwide?

Yes, some international organisations' reports have accused the UAE falsely, and most make judgements based on their preconceptions about Islam, Muslims and Arabs.

Why focus on the UAE and not on other countries in the region when working conditions are the same throughout the region? Is it because the UAE is successful and it sets an example for development, openness and progress?

Question: Does Your Highness believe that the English-language media in the country have contributed to sensationalising labourers' issues and encouraging labourers to strike and demonstrate, even for illogical reasons?

Sheikh Mohammed: They may have contributed, and some may even have sought to generate excitement in order to increase their distribution, and some foreigners working for these media organisations may assess issues based on the cultural backgrounds in their home countries while others lack competence so they make mistakes. In all cases, we do not assume bad intention in any person. I call on the citizens who own these media organisations to take responsibility, to seek the help of qualified and competent nationals when managing their newspapers, and to introduce programmes that encourage young national men and women to get involved in the media. It is also important to ensure that non-national media people are acquainted with our culture, norms, traditions and customs, which are based on support for man's well-being, fight against tyranny, support for the victims of tyranny, help for the needy and sympathy for the ill-fated.

Question: Public education suffers from bureaucracy, red tape, obstacles, poor syllabi and past mistakes. How can this sector be reformed? Have you introduced a strategic plan for this sector?

Sheikh Mohammed: Educational reform has already begun. If education had developed at the same rate as the other sectors, no-one would perceive a gap between the state of the country and society and the state of education.

The root of the problem with education lies in the absence of a practical long-term strategic plan. Unfortunately, the initiatives and practices of some education officials have resulted in disruptions to the educational process.

Nothing's easier than setting educational strategies, but, as they say, the devil's in the details. The purpose of education is to produce people who are closely connected to their environment, who love their country, who share their society's values and who have a modern outlook and are self-confident, respectful of duties and rights, who have a love for knowledge and the ability to make choices and take decisions, who accept others and who engage in dialogue and communication with people of other cultures and civilisations. These are a product of the educational environment, laws, regulations, methodologies, syllabi, and the teachers' abilities and potential. These products of the educational system are well-equipped for the job market, whether in the public or private sector.

While we cannot achieve this in one or two years, we may be able to achieve this in a record amount of time. We will not wait ten or twelve years to harvest the fruits as the education process is supplemented by compensatory training programmes throughout the years of study and after graduation.

Question: Dubai is experiencing an enormous amount of construction with mega-projects transforming the emirate into a hub for international investments. There are people who question the emirate's ability to keep abreast of this development. What is Your Highness' response to that?

Sheikh Mohammed: In Dubai, there is a race between projects and the development and modernisation of the infrastructure. For the most part, the infrastructure has kept pace with development - the two areas in which development has exceeded the capacity of the infrastructure are traffic and rent increases for which a cap has been decided. Within 2 years, with the completion of roadwork and the construction of new bridges, traffic congestion will be eased and rentals will stabilise. The Metro and associated public transport will also help with transportation in Dubai. If you have visited big cities in Arab countries or cities such as London, Paris and New York, have you seen the state of traffic in the centre of these cities?

Other infrastructure - such as electricity, water, airports and seaports and sewage and irrigation systems - meets both current and projected needs. I can assure you that there are well-laid plans to increase the supply of electricity and water, to expand Jebel Ali port and to build the new airport and exhibition and conference centres, all will meet the growing needs.

Question: Dubai has made visible progress in terms of the economy that has made it an important economic hub. The economy is heavily focused on investment in real estate and on industries that stem from a strong economy. Is Your Highness thinking of shifting the focus to industry so that there are two pillars - economic development and industrial development? What would the obstacles to this be, in your opinion?

Sheikh Mohammed: Investment in the real estate sector is not an end in itself. The huge development in the real estate sector in the past few years is linked to the vision we have for Dubai. For instance, the planned growth in tourism, which is happening at astonishing rates, means that we need two times as many hotel rooms and residential suites. Dubailand - one of the biggest developments - consists of recreational facilities which are tourist destinations in and of themselves.

The same applies to strengthening Dubai's position as the region's financial centre, as a hub for international conferences and exhibitions and as a hub for international companies and air and sea transport.

Of course, we are concerned with industry. Jebel Ali is basically an industrial area. We have established new industrial areas, and we are active in industries of high added value that are based on advanced technology and skilled labour.

In Dubai and the UAE, we are in the process of restructuring the economy. In a knowledge economy, services - in the broad and comprehensive sense - constitute 70% of the Gross Domestic Product. And if you compare that which makes up the UAE's economy to that which makes up advanced economies, you will understand how much effort we have to exert to complete this restructuring.

I can tell you that we are heading in the right direction in terms of restructuring the economy and that we are accomplishing more than planned.

Question: Dubai's economy is stronger than the economies of other emirates. This could cause a strategic obstacle to the federation.

Sheikh Mohammed: This statement is inaccurate, a comparison is being made between the incomparable and the conclusion is incorrect. Because if variations in the size of the economies of the emirates that make up a federation led to a strategic obstacle, the world's model federations would experience major crises. Some American states have a GDP of $20 billion and others have a GDP of over $1.5 trillion. Moreover, per capita income is $25,000 in some states in America, and $40,000 in others. The economy of the Indian city of Mumbai alone is equivalent to the economy of several states in India.

I have said this before and I repeat that the federation consists of several regions, and that specialisations and responsibilities in the federation are distributed between the federal authority and the local authorities. This distribution is part of an integrated framework. Our federation nurtures and develops this integration. The federation is also responsible for balancing development in the UAE. The UAE has provided the foundation for this balance by setting up the infrastructure, educational, health and social facilities and by offering job opportunities to all citizens of the country. There are development projects nationwide. Whatever Abu Dhabi or Dubai achieves is an achievement for the UAE and the people of the UAE as a whole. This is the reality of our situation. Since the federation was announced, Abu Dhabi and Dubai have contributed more than 85% to the Gross Domestic Product. I hope you compare the emirates' contributions to the GDP since 1972. You will see how they have grown as a result of the federation. You will see that the Northern Emirates' contributions have increased at a good rate and that the rate of economic growth in some emirates has been higher than that of Dubai and Abu Dhabi.

In 2001, Dubai and Abu Dhabi contributed around 88.5%; this fell to 85% in 2005. This means that the other emirates are catching up. The GDP of the Northern Emirates is higher than that of several Arab and even Gulf countries.

Question: Dubai has achieved a great deal in terms of tourism as represented by the transformation of desert into huge shopping centres that have attracted people near and far, and the growth in tourism contributes to the country's economic development. Can Dubai's experience be emulated by the rest of the emirates?

Sheikh Mohammed: In fact, most emirates follow Dubai's example. We are happy with this and we wish them success. We are also ready to help anyone who asks... What distinguishes Dubai may be that Dubai has been open to all citizens for decades. For example, two of the first shopping centres in Dubai were owned by citizens from two other emirates, several hotels belong to citizens who are not from Dubai and a number of entrepreneurs in Dubai are citizens of other emirates.

Question: Many talk about the economic boom in Dubai. They question this boom; some of their remarks are positive and some are negative. Do you see others' fears in this regard as resulting from short-sightedness and inferiority complexes?

Sheikh Mohammed: When you're at the top, the only way to go is down, as one Arab poet said; this is the negative effect or side effect of anything we do, even the medicine that doctors prescribe for certain diseases has side effects. The economic boom has huge side effects on the overall economy and in terms of improving people's lives.

As for those who focus on the side effects, who consider them negative and try to inspire fear, they are short-sighted or just speaking their minds or suffering from inferiority complexes, which are hard to cure.

Question: Despite the big difference between the number of nationals and the number of residents of other nationalities, there is still unemployment among the nationals. In Your Highness' view, how can we resolve the issue of unemployment among nationals?

Sheikh Mohammed: We do not have unemployment in the real sense of the word. Unemployment, in scientific terms, is a result of the economy's inability to generate enough jobs. In the UAE, the number of jobs is far greater than the number of nationals of working age. Nevertheless, a considerable number of nationals do not find work that meets their aspirations and qualifications... Aspirations are individual and cultural issues, they may be related to the young man or woman wanting only a government job, some only want to work close to home, or related to the young person's or their families' perceptions of banking, insurance, receptionist work, nursing or even the private sector as a whole.

The issue of qualifications is recognised. The government pays a great deal of attention to qualifications, offering training programmes to make up for the deficiencies in the educational system or to equip those who want to work in the private sector with the necessary skills.

Question: Emiratisation was and still is an issue of concern for the government... Do you think the private sector plays a positive role in employing nationals or has it lagged behind?

Sheikh Mohammed: If the private sector's role is not positive, it should be. I am proud of the emiratisation policies at a number of private sector companies and publicly-held organisations. I am proud of businessmen who have introduced training programmes and recruited national employees. I know prestigious international companies that wish to recruit nationals because it is in the companies' best interests and because nationals, irrespective of their salaries, cost less than non-nationals and are more productive. We encourage businessmen who are still unenthusiastic about recruiting nationals to become enthusiastic, because we have ways of making them enthusiastic!

Training is important. I am pleased with the efforts of the Dubai Institute for Human Resources Development and the national committee on job training and emiratisation. I am equally happy with the Ministry of Labour's decision to emiratise the position of human resource managers, and with the committee's accomplishments with regards to emiratising jobs in banks.

Question: The demographic structure is a popular topic of discussion but the proposed solutions do not get beyond declarations...

Sheikh Mohammed: I realise that the demographic structure arouses concern. It is under study and solutions are possible in the midterm and in the long-term. We have four keys to resolve this issue. The first is that a considerable percentage of the expatriate workforce is related to projects associated with the completion of construction projects in the UAE. The USA is currently studying a new system that will allow temporary workers to be brought in from the outside. Under this 'guest worker' system, workers will come to the country on 2 or 3 year contracts - the US is studying this system because they need workers for employment categories that aren't covered by the limited annual immigration permits or headhunting permits, which are used to recruit highly qualified people in technology, medicine and engineering.

As for the second key, it goes hand-in-hand with the process of transforming our economy from a traditional labour-intensive economy to a knowledge economy based on automation, modern technology and skilled workers.

The third part of the solution lies in the number of employment-age nationals, which is increasing each year. Our society is a young society and the new generations are more open to working in the private sector.

The fourth part of the solution, which is currently being studied by the government, lies in increasing the birth rate by encouraging nationals to have more children and giving more incentives to large families.

Question: Are you concerned about the increasingly intense discussions about the culture of the country in light of the demographic structure and the increasing number of people of other nationalities, who now outnumber UAE nationals?

Sheikh Mohammed: The demographic structure has an effect on culture, but the components of our national culture are authentic and deep-rooted and there are enough deterrents to negative influences. The concern about culture is an international phenomenon that comes with globalisation and the developments in technology, communication and information. In France, there is concern about French culture; in Japan, there is also concern about Japanese culture and such worry exists in all Arab countries. To deal with this, culture should be promoted by using modern tools to get people interested, especially the new generations who use the Internet and watch satellite channels and who are familiar with international lifestyles, entertainment and recreation offerings such as music, cinema and sports.

Question: In the UAE, there are federal ministries that provide services, there are education, healthcare, and sports councils. Where do they contradict each other and in what ways do they communicate?

Sheikh Mohammed: I do not see any contradiction. The education, healthcare and sports councils support the federal ministries. Take, for example, the education councils in Dubai and Abu Dhabi, they both prepared visions, goals and plans and made them available to the Ministry of Education. Furthermore, the Education Minister was the Director of Abu Dhabi's Education Council.

I believe in the centralisation of plans and policies and the decentralisation of implementation... The main legislation and laws in education and the curricula are decided at the federal level. What prevents the local authorities from taking the initiative when it comes to implementing these? The same applies to healthcare services. The main laws, such as those controlling medicines and regulating their usage, are decided at the federal level. Local authorities implement these in full in Abu Dhabi and partially in Dubai. The federal authorities can implement all or part of these in other emirates.

Question: The UAE, in light of its stable political system, is experiencing a golden age in terms of security, stability and development. How do you see the forthcoming elections? What can an elected Federal National Council add to the federation?

Sheikh Mohammed: The FNC elections are an important step. It is an appropriate and timely step. It stems from our reality and conditions of which we and the citizens of the country are more aware than others.

Our belief in Shura (consultation) and participation is a part of our selves and our values. Our grandparents and parents applied these practices in their Majlises (councils) and they were keen to develop these practices in a way that suited the stage of federation-building through the constitutional power of the FNC from the time of the country's establishment... Today we take another step forward. We pin great hopes on this step, as it is a building block for future steps. We hope that the FNC in its new form will contribute to the establishment of an integrated parliamentary system as per our fathers' wishes as recorded in the introduction to the federal constitutions.

Question: The UAE is a free country, and freedom is one of its defining characteristics, but some officials suffer a great deal as a result of the way that the media deals with their departments' issues. What do you see as the solution for this problem? Do you think that journalism hasn't started playing a pioneering role yet?

Sheikh Mohammed: I always tell media people to publish any information provided they are sure that it is accurate. When you address a problem, you should give the parties involved the chance to present their points of view. I don't think that balanced, objective and accurate handling of a problem in any department or ministry would anger the officials concerned. If a journalist does his work in the right way, as I described, he doesn't have to worry about the official's anger.

As for whether media has played a pioneering role, I would say that journalism plays a considerable role but that it can do better. We need to improve the quality of journalism about the economy, society and culture and in order to do so we have to improve the standards of journalists and have journalists who specialise in the economy, education, healthcare, sports and other areas.

We need a deeper handling of comprehensive development and issues related to work ethics, behaviour and other things.

The media's role is to seek truth, therefore, one should avoid buzzwords and the superficial handling of issues. I trust that our media will improve with the increasing number of national media and communication graduates who will play increasingly important roles in our media establishments and with the improvement of media management.

Question: The elections have given people hope, but there's a fear that some parties may take advantage of this historic opportunity for purposes that are not in the nation's best interest.

Sheikh Mohammed: We assume that everyone has good intentions. We also rely on our nationals' awareness, on their eagerness to safeguard their country's interests and on their patriotism. I have no doubt that citizens will reject anything that's less than loyal and patriotic or anyone who acts in a way that is counter to our values and traditions. Interaction and communication between the government agencies and citizens guarantees the success of this historic opportunity. Neither the country nor the society will permit anything that is against the nation's needs and interests.

Question: In the absence of Iraq and its political and economic deterioration, the region has lost an important strategic depth, especially in light of the appearance and growth of regional powers that are attempting to become nuclear powers, the Arabian Gulf lacks deterrents to the greedy. The GCC hasn't yet introduced the single passport and travel document, which is only a small part of what the GCC people need. Doesn't Your Highness see that the train is moving fast and the GCC decisions are still stuck at the red light in terms of strategic mergers?

Sheikh Mohammed: This is an important question. There is imbalance in the region. Even before the situation in Iraq deteriorated, there was no balance. Furthermore, regional balance wasn't in its best shape when Iraq was powerful, before its war with Iran and its invasion of Kuwait.

The security of the Gulf region has been an issue since the mid-60s. The region has experienced three big wars in three decades, and Iraq took part in these wars. Iraq and its people have paid a high price, and unfortunately are still paying the price, and Iraq is surrounded by grave and significant dangers.

With regards to the GCC, it has made accomplishments in terms of confronting the outside dangers that threatened one of its members, as in the liberation of Kuwait. In terms of economics, the free trade zone and the customs union have been formed. We are on the verge of setting up the common market, hopefully by the deadline next year.

Can the GCC achieve more? I say: Yes, it can. We hope that the personal ID project, which will allow free movement among GCC states, will be approved and authorised because this will mean enough progress has been made in terms of security coordination, electronic telecommunication systems among land, sea and airports and unified databases. The unified passport is less important. The Europeans haven't tackled the one passport issue yet. For the European Union, the single visa issue and the single currency issue were more important, and they achieved these several years ago.

Today the Euro is an international currency that competes with the US dollar in international financial and commercial dealings. We have to work to achieve a unified currency by our deadline - 2010.

Question: Arabs play no role in crucial Arab issues such as Iraq, Palestine, Lebanon and Sudan. Only the superpowers' interests move and provoke parties in this or that country. Don't you think that this may lead to the Arab region being transformed into a region of multiple parties manipulated by these countries without regard for the sovereignty of the Arab countries and their resources?

Sheikh Mohammed: Yes, the Arab role in crucial Arab issues is secondary; one reason for this lies with the concerned parties themselves. Look at the internal situation in Iraq, Palestine, Lebanon and Sudan. How can there be an active Arab role in light of all the divisions, differences, antagonism and national, political and military wars?

As for the superpowers, it makes sense that they seek to achieve their interests by any means possible. These countries are pleased whenever an Arab country seeks their help or support, but I am quite confident that people reject parties, movements or groups which have relations with foreign countries, big or small; such parties or movements are unable to influence their societies. They may cause disorder or trouble and raise their voices, but people are clever and most of them reject any political, social or cultural activity that has foreign connections.

Question: The issue of the occupied islands is one of our most important issues. What is Your Highness' view on liberating the islands from 'the Iranian misunderstanding' and bringing the issue to the negotiating table?

Sheikh Mohammed:  Our stance on the issue of our islands is clear and well-known. It has a legal background and is always on the agenda at Gulf, Arab and international meetings and gatherings.

This issue will be resolved peacefully based on international charters and on our historical, geographic and religious ties and relations with the Islamic Republic of Iran.

Question: What is the role of the United Nations, which has dealt with almost every issue worldwide except the issue of the UAE's islands?

Sheikh Mohammed: The issue of the islands is in the United Nations' hands. We do not want to make this an international issue. The UN is our last resort, but we prefer direct dialogue or the intervention of our brothers in the AGCC.

Timing is important. We hope for the right time to resume negotiations with Iran on the issue of our three islands.

Question: The dream of Arab political unity has faded. However, don't you think there's still hope for economic integration that will bring the Arab world closer to forming an economic community equivalent to the major international communities, knowing that the potential is there and that effort is all that is needed?

Sheikh Mohammed: There are many sectors with high potential for Arab cooperation. I have suggested that an Arab economic summit be held yearly and that Arab economic cooperation be revived as the start of reviving and promoting Arab cooperation in all fields.

However, regrettably, most Arab countries do not give economic cooperation the attention it deserves. Many Arab countries do not take advantage of the vast opportunities to attract huge Arab investments at this stage. Good intentions and honest appeals for Arab investments are not enough. It is more important to create a suitable environment and this cannot be done just by setting up legislation, introducing incentives and announcing that project licenses will be issued in a matter of days... There must be an improvement to executive management, which often hinders investment projects, even those that have the necessary needed licensing.

I have repeatedly told Arab leaders and officials that because Arabs are eager to invest in Arab countries they should prepare a suitable investment infrastructure. In the UAE, we do not hesitate to make significant investments in Arab countries that provide even the most minimal investment climate. There are UAE investments - both government and private - in a number of Arab countries. These investments are accompanied by expertise, knowledge and management, so they contribute to improving the investment climate in these countries.