History and Economics of the UAE – useful data

The first traces of civilization on the Arabian Peninsula date back to 125-100,000 BC. Scientists have discovered tools suggesting that there were settlements in the area as early as that. At that period of history, it was a small tribal community living in economic isolation from the rest of the world.

In the medieval period, the territory which is now known as the UAE became a part of the Rashidun Caliphate, an Islamic state at Islam’s dawn. The cities of Dubai, Sharjah, and Fujairah appeared during the Caliphate. The Caliphate encompassed a great number of territories from the Arabian Peninsula to the Caucasus and North Africa. Its rapid expansion required considerable military forces to control the areas. With time sheikdoms comprising the Caliphate become more autonomous and economically more developed and the area comes under the control of Oman.

The population of the coastal regions of the peninsula was mainly involved in trade. In XV century Portugal and the UK started taking an interest in the peninsula. 1820 marks the beginning of the confrontation of the region with the British East India Company, the most influential joint-stock trading company. It sent its military forces to the peninsula and made seven Arabian sheikhs sign the treaty which actually meant the beginning of the British protectorate on the territory. British colonists have, in fact, monopolized trade depriving the population of the region of their main source of income. Though the native population of the area could not directly oppose the colonists due to their small number, they managed to preserve their traditions and remained loyal to their values.

1920’s became crucial years in the history and economy of the modern Emirates. Several sheikhdoms started a war for independence with the Trucial States (regions that signed an agreement with Great Britain). Another critically important event took place about this time – the first oil reserves in the Persian Gulf had been discovered. However, until 1950’s the region’s main source of income was pearl trade as the British protectorate did not really perform any oil extraction.

The discovery of oil reserves has attracted numerous investors to the area. Naturally, the standard of life among the native population has considerably risen. The British protectorate lasted till 1971 and was terminated after the League of Arab States (an organization of Arab countries) has declared the right of the Arab countries for independence.

The same year six emirates that have previously comprised the Trucial States have formed the UAE. Rasal-Khaimah joined in 1972.

The state has almost immediately become greatly successful. Over relatively short history country managed to reach a lot. Money gained from oil extraction was cleverly invested into the development of other industries and namely agriculture, tourism and finance. The UAE has one of the most diversified economies in the world and has created several free trade zones we will discuss in more detail in one of the next sections of the overview. As a result, the UAE is one of the first countries in the world for ease of doing business.