Sheikh Khalifa, Who Oversaw UAE’s Stark Transformation, Dies at 73

Sheikh Khalifa, Who Oversaw UAE's Stark Transformation, Dies at 73

DUBAI—Sheikh Khalifa bin Zayed al Nahyan, the second president of the United Arab Emirates and the ruler of Abu Dhabi who shunned the limelight even as he oversaw his country’s remarkable transformation, has died. He was 73.

Sheikh Khalifa took power in 2004 following the death of his father, the UAE’s founder, but had been ailing in recent years. He underwent an operation after suffering a stroke in 2014 and was pronounced stable, but was rarely seen publicly thereafter.

The UAE government in a statement said the leader died on Friday. The country would hold 40 days of official mourning, with flags at half-staff, while government offices and private-sector firms would close for three days, the statement added.

There was no immediate announcement of his successor. But Sheikh Mohammed bin Zayed, the emirate’s crown prince and the deputy supreme commander of the country’s armed forces, is expected to succeed Sheikh Khalifa, his half-brother, both as Abu Dhabi ruler and UAE president. Leaders of Abu Dhabi’s royal family have traditionally held the role of president of the federation of seven emirates that make up the UAE

“The UAE lost its righteous son,” Sheikh Mohammed tweeted, praising his half-brother for empowering the country. “Khalifa bin Zayed, my brother, my mentor and my teacher.”

Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai and the UAE vice president, in a statement posted on Twitter said the president had served his country. “We witness that Khalifa bin Zayed has fulfilled his trust, and served his flock, and loved his people.”

Condolences were felt from across the Middle East and around the world. The US Embassy in the UAE in a statement said it expressed its deep condolences to the UAE president’s family and the country’s people. “He was a true friend of the United States,” he said.

The UAE and Israel established diplomatic relationships under the monarchy of Sheikh Khalifa. Israeli Prime Minister Naftali Bennett in a statement said, “Sheikh Khalifa’s great legacy and deeds were appreciated by many in Israel.”

The office of Turkish President Recep Tayyip Erdogan said it would organize a visit to the UAE to offer condolences, after the two countries in recent months have tried to repair once-strained ties. Gulf states, Iraq, Jordan and Egypt also send their condolences.

With a smooth transition in expected leadership, Sheikh Khalifa’s death is unlikely to have an economic or political impact. As his half-brother grew more frail, Sheikh Mohammed took on a more prominent role over the past decade, establishing deep ties with Saudi Arabia’s young crown prince and projecting power across the region.

While never quite as brash as neighboring Dubai, Abu Dhabi built out its infrastructure and undertook large new building projects during Sheikh Khalifa’s 18 years at the helm. The projects included new islands with residential and office towers and a cultural district that includes a Louvre museum opened in 2017.

During his time in power, Sheikh Khalifa also overlooks Abu Dhabi’s economic strategy and massive energy wealth—the UAE capital has most of the country’s oil, the seventh-largest proven reserves in the world.

Like many of its peers in the Persian Gulf, Abu Dhabi is trying to diversify economic activity away from energy, and has seeded new industrial projects and set up funds for local entrepreneurs to help make that happen.

The city’s rapid development hasn’t come without challenges, however. The government has come under fire repeatedly from human-rights groups that have alleged instances of forced labor and unsanitary living conditions for low-wage foreign construction workers.

The UAE has also been criticized for its response to Arab Spring upheaval elsewhere in the Middle East. Scores of people were arrested on Sheikh Khalifa’s watch. They were tried for associating with Islamist groups and plotting to overthrow the state. Rights groups have alleged government security forces used torture in state security facilities.

The UAE’s prominent role in the Saudi-led intervention in Yemen’s civil war also drew criticism, though that eased after it pulled out most of its forces in 2019. The UAE won plaudits in 2020 for establishing normal relations with Israel under the US-brokered Abraham Accords.

The country’s response to the Covid-19 pandemic, involving one of the world’s most aggressive vaccination rollouts and short lockdowns, also has meant the country has drawn more wealthy expatriates, already roughly 90% of the population.

Kristian Ulrichsen, Middle East fellow at Rice University’s Baker Institute for Public Policy, said Sheikh Khalifa would “be remembered as a transitional figure, a bridge between the old guard of nation builders such as Sheikh Zayed and the assertive new generation of leaders represented by Mohammed bin Zayed and his full brothers.”

If announced as the successor, Sheikh Mohammed is widely expected to continue on the path set under Sheikh Khalifa.

As the crown prince and chairman of the strategy-setting Abu Dhabi Executive Council, Sheikh Mohammed has been involved in charting the emirate’s economic course. Despite Sheikh Khalifa’s title of ruler, he was Sheikh Mohammed who spearheaded Abu Dhabi’s growth strategies, especially in Sheikh Khalifa’s later years.

Sheikh Khalifa bin Zayed al Nahyan was born in 1948 in the arid interior of Abu Dhabi, part of what was then the Trucial States, a collection of sheikhdoms under British protection.

He was the first son of the late Sheikh Zayed, then a rising figure in local tribal politics who wanted to turn Abu Dhabi’s newly discovered oil wealth into a better living standard for his people. Aided by the British, Sheikh Zayed replaced his half-brother, the more old-fashioned Sheikh Shakhbut, as Abu Dhabi’s ruler in 1966.

Immediately after the bloodless coup, Sheikh Zayed began grooming Sheikh Khalifa to lead. At just 18 years old, Sheikh Khalifa got his first posting in 1966 as the ruler’s representative in Abu Dhabi’s eastern region, a sparsely populated area consisting of small desert settlements ringing the oasis town of Al Ain.

Sheikh Khalifa became Abu Dhabi’s crown prince two years later, making him his father’s designated successor. That position gained prestige in 1971, when the British withdrew from the region and the UAE was formed with Sheikh Zayed as its president and pre-eminent political figure.

Sheikh Khalifa held numerous positions under Sheikh Zayed thereafter, including in the military and as head of the Abu Dhabi Executive Council. He played a part in the development of local roads and institutional infrastructure, as well as the creation of a modern governmental administration.

In 1976, he oversaw the establishment of the Abu Dhabi Investment Authority to invest surplus energy receipts in overseas markets, aiming to secure a return for future generations. The fund, which initially attracted little attention, has grown to an estimated value of $700 billion, in concert with Abu Dhabi’s growing oil wealth.

Over the years, Sheikh Khalifa also accrued vast personal wealth including a portfolio of property holdings in the UK estimated in the billions of dollars. The properties have become the focus of a high-court dispute that has revealed a possible competition among family members for control of his assets.

The death of Sheikh Zayed in 2004 marked the beginning of the UAE under Sheikh Khalifa.

In the years that followed, the pace of Abu Dhabi’s infrastructure grew rapidly. Massive new investments in renewable energy and diversified non-oil industries multiplied. The UAE also took steps toward democracy—albeit incomplete ones—by holding the first elections for the Federal National Council, the country’s advisory legislature, in 2006.

Sheikh Khalifa kept up a close alliance with the US during his tenure, and the American military has used UAE military bases extensively in recent Middle Eastern conflicts. This relationship helped the UAE secure a nuclear cooperation agreement with the US in 2009, paving the way for it to build several reactors for peaceful power generation.

Regionally, the UAE projected itself as a neutral country interested in doing business more than inserting itself in political disputes, but more recently its outsize military strength has earned it the title “Little Sparta” among some US military officials. Over the past decade, it has intervened in regional conflicts, like Yemen, Syria and Libya, and flexed its diplomatic muscle, most notably by helping to broker a 2018 peace deal between Ethiopia and Eritrea.

Write to Asa Fitch at asa.fitch@wsj.com and Stephen Kalin at stephen.kalin@wsj.com

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