The paper will focus on the evolving federation of the United Arab Emirates, charting its creation - born out of collective security - following Britain's withdrawal from the Persian Gulf in 1971, and its survival through several constitutional crises and other breakdowns in relations between its seven constituent member emirates. A study will then be made of the relationship between the two wealthiest and most populous of these emirates: oil-rich Abu Dhabi, home to the permanent capital of the UAE; and Dubai, a historically successful regional freeport with limited oil. In particular, Dubai's efforts to retain as much autonomy as possible over its economic development path will be considered, with a special emphasis on its attempts to diversify away from oil and gas exports since the mid-1990s by building up a multi-sector economy based on foreign direct investment, export-processing free zones, tourism, and a financial sector. This paper will argue that Dubai's long term objective was really to establish itself as a de facto city state and global business hub with its own international brand, thus shielding itself from a resource-scarce future in which Abu Dhabi would seek much greater control over the UAE federation. However, following the dramatic reversal of Dubai's fortunes over the course of 2008 and 2009, it will be shown how the failings of Dubai's foreign direct investment-reliant model and its accumulation of significant short term debts have left its rulers with little option but to seek assistance from Abu Dhabi. With a cautious bailout programme underway, Abu Dhabi will gradually rein in Dubai's autonomous economic planning, especially if it is deemed to have damaged the UAE's international credibility, and in time the federation is likely to enjoy greater political centralization as Dubai's government is starved of the resources it needs to perform the duties that can be taken over by federal ministries. Finally, although often overlooked in both academic and media outputs, the paper will consider the future of the five poorer emirates and their likely role in the evolving federation. In recent years their share of contributions to the UAE's overall GDP has fallen and their number of seats on the federal council of ministers has shrunk. Moreover, with the bulk of employment opportunities being created in Abu Dhabi and Dubai, many citizens of poorer emirates are obliged to commute long distances and have effectively become migrant workers within their own federation.