Page 117 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Silicon from Sand: Essential Background on the GCC 101

notably Dubai—is the country that captures the most international
attention because of its open business environment, fast-paced
development, media savvy, and assertive global ambitions. Dubai
has quickly become the region’s economic hub, but it is not stopping
there—it is also rapidly becoming a leading business player on the
global stage. This is certainly an impressive feat for the UAE, a
nation whose total population is a little more than 4 million—just
half that of New York City. The UAE’s progress is even more remark-
able when one reflects on its origins: like the rest of the GCC, the
UAE has humble roots.
The UAE consists of seven emirates, or states, federally united
to form a sovereign entity, with each emirate remaining somewhat
autonomous when it comes to local decisions. Abu Dhabi, the
wealthiest and largest emirate, and the location of most of the coun-
try’s oil, is the UAE’s capital. Dubai, the next most powerful emi-
rate, is a commercial center with global prominence. The remaining
emirates are Sharjah (next door to Dubai), Ras al-Khaimah, Ajman,
Fujairah, and Umm al-Qaiwain. The seven emirates were brought
together in 1971, before which the term “UAE” did not exist.
For centuries, the coast of the Arabian Gulf consisted of small
chiefdoms who were perpetually engaged in dynastic feuds and
territorial disputes. The tribes of the region had common cultural
traits but were not organized as a united political entity. In the
mid-nineteenth century, the rulers of the states that currently com-
pose the UAE entered into a landmark agreement with the UK in
order to resolve a number of long-standing maritime disputes.
In 1892, another agreement with Britain was made, under which
local rulers agreed to two conditions: (1) not to enter into agree-
ments with any foreign powers without UK approval, and (2) not to
cede territory to anyone but the UK. In return, the Trucial States—
as they came to be known after this truce—would receive protec-
tion from the British. The Trucial States, while never colonized, did
accept a large measure of British influence over their international
affairs in exchange for protection. The UK and its Commonwealth
nations have, as a result, had greater connectivity with the UAE
than have other Western nations.
As colonialism faded in the postwar period and smaller
nations began to assert their sovereignty, it was inevitable
that the Trucial States’ agreement with the UK would be ended.