The United Arab Emirates on Wednesday set up a Dh10 billion ($2.7 billion) fund to help to pay low-income citizens' debts and announced plans to raise wages of some state employees, state news agency WAM said.

The agency said President Sheikh Khalifa bin Zayed Al-Nahayan ordered a doubling of the salaries of some state employees in the judiciary, health and education sectors from January to mark the 40th anniversary of the founding of the UAE.

The UAE, a federation of seven emirates that came together to form one state in 1971, is one of the top five world oil exporters and enjoys one of the highest per capita incomes in the world of around $48,600.

'His Highness ... ordered the establishment of a Dh10 billion fund that will take charge of studying and dealing with loans of low-income citizens, and to process settlements of personal loans due from them in coordination with the central bank and lender banks,' the agency said.

Senior officials, including deputy ministers, would receive a 35 percent pay increase, while a 45 per cent pay increase would be given to mid-level federal government employees, WAM said.

The National Bureau of Statistics has said that robust oil prices are expected to help the UAE economy to grow by 4.2 per cent in real terms this year, much faster than 1.4 per cent in 2010. A Reuters poll in September forecast 3.8 per cent growth in 2011 and 2012.

The Opec member's $297 billion economy has been recovering in 2011 from last year's $25 billion debt restructuring at Dubai's flagship conglomerate Dubai World, helped by higher oil output and strong trade flows.

Sheikh Khalifa also ordered government departments to accord the children of Emirati women married to foreigners equal treatment to UAE nationals, WAM said.

The order allows children of Emirati women to apply for UAE citizenship once they reach 18 years of age. – Reuters