The United Arab Emirates

How Oil Created the United Arab Emirates

The United Arab Emirates

The United Arab Emirates is a young country, only in existence in its current nation state for a few decades. Prior to emerging as the United Arab Emirates, the region was inhabited by several nomadic tribes and occupied by the British for several hundred years. That changed with the discovery of oil. Oil was the catalyst that transformed the region into a major oil-producing nation and luxury vacation destination. And it took less than a century to accomplish.

Under British occupation of the region in the 1800s, the various tribes, called sheikdoms, had constant disagreements and wars largely due to British influences. This prevented solidarity among the sheikdoms that would have been a threat to the British power. In 1892, Britain signed a treaty with the sheikhdoms that prohibited the ruling sheikhs from establishing any political or economic relations with any other nation. Essentially, they were not allowed to talk to any nation except Great Britain. In return, Britain offered the protection of its royal forces against any enemies.

In the early 1900s, worldwide interest in the Middle East started to focus on oil. British officials saw this as a threat to the holding of their Middle East colonies. To prevent the interest in independence that oil wealth would bring, Britain obtained pledges from several colonies to not explore for, or export oil, without permission from the British government. The pledges did not work however. Oil was discovered and did create great wealth for the area. This ultimately led to the ousting of the British occupation and the eventual development of the United Arab Emirates.

Oil Brings Opportunities

United Arab Emirates Oil

With this newfound oil wealth, the rulers saw opportunity for their people. They built schools, roads, and hospitals that quickly changed the region into a developing country. This evolution also brought about a desire for independence from Britain. After a decade of political maneuverings and military battles, Britain pulled out of the area completely in 1968. According to A.O Taryan, author of The Establishment of the United Arab Emirates 1950-1985, without the protection of Britain other nations took an undesirable interest in the area, including the Soviet Union and Iran.

The area rulers quickly organized to stabilize the region to prevent another occupation. This organization led to the creation of the United Arab Emirates. Originally, two emirates joined forces, Abu Dhabi and Dubai. This alliance turned into a nation that ultimately included seven emirates. On December 2, 1971, the establishment of the United Arab Emirates as an independent state was announced.

The People of the U.A.E.


The history of the nation contributes to the demographics of the U.A.E. As a historically nomadic and uneducated nation of people, the citizens of the U.A.E. did not have the skills or knowledge to contribute to the much-needed development of the country. To compensate, the U.A.E. opened its borders to anyone needing a job. People came from neighboring countries by the thousands for a chance to work. In Dubai alone, the population went from 30,000 in the 1950s to 1.3 million people in 2007.

In just 50 years, the country’s population tripled in size and become a very diverse nation. In 2005, it had a population of 4.5 million people. Half of which were of South Asian ethnicity and less than a quarter were U.A.E. citizens. This growth and diversity was a direct result of the need to bring in educated and skilled workers to design and build the infrastructure of the country and serve as teachers and doctors.

From Oil to Tourists

UAE Tourists

In Dubai, the second largest oil producer of the U.A.E., experts estimated in 1991 that its oil reserves were decreasing. This led to a prediction that Dubai would run out of oil by 2016. At the time, both Abu Dhabi’s and Dubai’s economy were exclusively dependant on oil exportation. Sheikh Mohammad, ruler of the emirate Dubai, saw the need to restructure the economy of Dubai and focused on increasing tourism, banking, and business opportunities.

Sheikh Mohammad is known for his extravagant ideas. With unlimited personal and government money, he succeeded in restructuring the economy of Dubai, turning it into a hotspot for businesspersons and wealthy vacationers. His extreme ideas and how he did this seems to be based on making his imagination become reality. This has made him and Dubai the subject of many news articles and television shows. He has built entire islands, each with thousands of individual properties worth millions. Dubai also boasts an indoor ski resort, underwater hotel, and many luxury resorts.

The move to stabilize the economy of Dubai and the country brought tourists and new business to the U.A.E. The goal of diversifying the economy was successful and many people enjoyed the benefits of increased national wealth. But the U.A.E. did not avoid the affects of the global economic downturn. Million dollar properties that at one time could not be build fast enough stopped selling. Construction projects shut down due to a lack of money. This has not deterred leaders of the U.A.E. They predict a quick recovery and are poised to expand.

It is not hard to buy into the optimism of the U.A.E. leaders and people. This is a nation of people that completely remade themselves. In just a few decades, they transformed from a region of occupied and warring tribes with limited education, to an economic powerhouse of the Middle East. U.A.E. is a nation that will continue to be a major influence in the Middle East and will likely surprise the world with grand ideas in the future.


Arabian Business: 42% think UAE economy will suffer further in 2010

Arabian Business: UAE will see strong growth in 2010—central-bank

The Establishment of the United Arab Emirates 1950-1985 by A.O Taryam, 1987

Hvidt, Martin. Public-Private Ties and their Contribution to Development: The Case of Dubai.

Middle Eastern Studies. (July 2007) Vol. 43, No. 4, 557-577.

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Article Summary

The United Arab Emirates in a small and relatively new country in the Middle East. Yet it is a major contributor to the region’s economy and the world’s oil supply. Surprisingly, just 50 years ago the country did not exist and the area was inhabited by several nomadic tribes. This article tells the story of the rise of the U.A.E. and how oil played a major role.

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