By the early twentieth century, a leading source of economic activity was the pearl trade. However, World War I, the Great Depression, and the Japanese invention of the cultured pearl resulted in a significant weakening of the pearling industry. The heavy taxation on pearls imported from the Gulf following World War II by India caused its irreversible decline. As a result, some turned to fishing. But, with little education and no roads or hospitals, the future looked bleak. By the 1930s, the first oil company entered the region and began conducting surveys around Abu Dhabi. In 1962, Abu Dhabi exported its first cargo of crude oil that would play an essential role in the UAE’s development.
Since the 1820s, the English had maintained a presence in this region. In 1853, Britain intervened in the area due to pirate threats and made a permanent truce to provide protection and oversight of the foreign policy. It was explicitly understood that Britain would not colonize the area. This agreement was made with a group known as the Trucial States, which were a collection of sheikdoms in the Persian Gulf. The Trucial States, also referred to as the Trucial Colony, was composed of present-day Bahrain, Qatar, UAE and Oman. Following a period of Arab nationalism and anti-British activity beginning in the 1940s and 1950s, the British eventually relinquished administration of the region in 1971.
On December 2, 1971, the UAE was created by uniting seven of the Trucial States under a unified Constitution: Abu Dhabi, Dubai, Sharjah, Ajman, Umm al Qaiwain, Ras al-Khaimah and Fujairah. Abu Dhabi is the largest of the former territories and is the federal capital. Dubai is second advocates in dubai largest of the emirates and is the main port, commercial center, and airport hub. The five other emirates are smaller areas that realize political and economic benefits through alliances with the larger neighbors, Abu Dhabi and Dubai. All seven states are ruled by Sunnis.
The UAE is considered by some to be an autocracy, which is a form of government in which one person possesses unlimited power. There has been even less political reform in this country than in other Gulf States, even Saudi Arabia. International non-governmental organizations (NGOs) have ranked the UAE as having among the least free political systems in the world. In particular, such studies have highlighted the existence of the ‘sheikh’s dilemma’ in the UAE, in which economic but not political reform is pursued. To maintain peace, a ‘ruling bargain’ is implemented where the UAE government distributes oil wealth equitably, while also carefully exploiting a range of ideological, religious, and cultural resources. Others simply state that the UAE exhibits a monarchical presidency led by ruling families on neo-patrimonial lines.
Following the British withdrawal, Sheikh Zayed bin Sultan Al Nahyan became the first president. Sheikh Zayed, once Emir (or ruler) of Abu Dhabi, ruled as UAE’s president for over thirty years until his death on November 2, 2004. Due to oil wealth, Sheikh Zayed became one of the richest individuals in the world with an estimated net worth in excess of $24 billion (USD). Following his death, the eldest son of Sheikh Zayed, Sheikh Khalifa bin Zayed Al Nahyan became President of the UAE. Sheikh Khalifa is the world’s third richest member of a royal family, with an estimated net worth of $19 billion (USD). The presidency of UAE is decided by a vote by the Federal Supreme Court (FSC), a governmental entity in the UAE rather than through an electoral or popular vote. Political parties are strictly prohibited.
The UAE’s highest authority is the Supreme Council of Rulers (SCR). The SCR is given power to initiate policy and reject laws that have been previously passed. Seven hereditary rulers and sometimes their crown princes and closest advisors have control of this governing body. Subordinate to the SCR is the Federal Council of Ministers (COM). The bulk of UAE’s policies and daily affairs are formulated by the COM, which meets more frequently and formally than the SCR. The judicial branch of government is run by the Union Supreme Court. Judges are appointed directly by the UAE president.