East of Aden

A brief history of the UAE


Distraught Iranians gather at Dubai airport on July 3, 1988 awaiting news of relatives aboard an Iranian airliner shot down by a U.S. missile over the Persian Gulf

While much of the legacy of the Raj has been mired by the violence that followed partition in India and Pakistan, people often overlook the surprisingly bright success story of the emergence of the Trucial States, better known today as the United Arab Emirates.

The Emir of Bahrain, Sheikh Isa Bin Sulman al-Khalifa (R) and United Arab Emirates (UAE) President and ruler of Abu Dhabi, Sheikh Zaid Bin Sultan al-Nahayan in Amman, Jordan, 1987

On the eve of its dissolution in 1947, the British Raj was the second-largest polity in the world. With 390 million people, it was well over twice as large as the Soviet Union (170 million) and second only to a then civil war-ravaged China.

While much of the legacy of the Raj has been mired by the violence that followed partition in India and Pakistan, people often overlook the surprisingly bright success story of the emergence of the Trucial States, better known today as the United Arab Emirates.

First known to the British as the “Pirate Coast,” the Trucial States derived their name from the treaties or truces signed with individual sheikhs of what are now the seven emirates in the early 19th century.

While Abu Dhabi, Ajman, Ras al-Khaimah, Sharjah, and Umm al-Quwain each signed in 1820, Dubai got on board in 1835, and Fujairah a century later in 1952.

Loose protectorates of Her Majesty the Empress of India, the Trucial States were part of the larger configuration known as the Persian Gulf Residency of British India, which also contained Kuwait, Bahrain, Qatar, and parts of Oman and southern Persia.

As British power rose in the East, the Gulf rapidly became integral to the British Raj, and vice versa. Up until 1969, the Indian rupee was the de facto currency of the as-yet-ununited Emirates.

Black Gold at Long Last

Falling under the purview of the British Foreign Office in London’s Whitehall after the collapse of the Raj, whatever strategic value the Trucial States had lost as a lifeline to India was quickly regained with the discovery of oil and natural gas in the 1950s.

After a nearly 30-year hunt by everyone from the Anglo-Persian Oil Company (later BP) to Shell, ExxonMobil, Total, and Partex, the black stuff was finally found at Murban in Abu Dhabi in 1958 and reached market by December 1963.

Coming on the heels of a collapsed pearl industry—and a population on the brink of starvation in the wake of WWII—the timing could not have been better.

Cherry on the cake, four years later Dubai struck it big at the offshore site of Fateh, some 60 nautical miles off the ‘pirate coast.’ The second emirate to discover oil began exporting in 1969, a year after the Labour government of Harold Wilson announced Albion’s impending withdrawal.

Empire by (dis)Invitation

Having lost the Suez Canal in Egypt in 1956 and relinquished Aden in Yemen in 1963, the writing was on the wall for the British in the region. With or without oil, the UK was facing a budget shortfall in 1968 and the time had come to leave. After centuries of involvement in the region they quietly departed in December 1971.

The tribal leader of Abu Dhabi, the renowned Sheikh Zayed, was quick to seize the moment and propose a federation with his counterpart (and brother-in-law) in Dubai, Sheikh Rashid.

At their famed meeting in the desert at Argoub El Sedira in the winter of 1968, they laid the basis for the future United Arab Emirates. Sharjah, Ajman, Umm Al Quwain, and Fujairah immediately joined the union.

Iran was the first to welcome the new sovereign to the neighborhood by seizing the islands of Abu Musa, Greater Tunb, and Lesser Tunb from the emirate of Ras al-Khaimah the day before the British formally withdrew.

A departing British warship stood idly by as Iranian naval boats “reclaimed” the islands in what had begun as a routine exercise, leading the initially recalcitrant Ras al-Khaimah to join the nascent union three months later in February 1972.

Bahrain and Qatar were invited to join and initially showed interest, but eventually declined.

The Spoils of Geography

A question of luck and leadership determined a great deal of the Emirates’ early development.

Neither the discovery of oil nor the departure of the British would have been worth a Lebanese lira without the visionary guidance of Zayed and Rashid.

Far less clear, however, is the individual emirates’ territorial makeup and what roll their territorial disparities had in the country’s development.

Abu Dhabi, the Emirates’ capital, master strategist, and diplomatic ringleader, accounts for 85% of the country’s land mass and 94% of its oil reserves (the bulk of which lie in the offshore Zakum oilfield), some 92.2 billion barrels. Dubai comes in a distant second with 4 billion barrels, while Sharjah and Ras al-Khaimah have 1.5 billion and 100 million respectively.

Gerrymandering í  la Golfe

While the contours of Abu Dhabi are relatively clean-cut in the vast southwestern stretches of the country, things get Lesotho-like tricky toward the northern tip and urban core of the country.

As the most cursory glance at the map reveals, the northern third of the UAE is a smorgasbord of overlapping jurisdictions.

Squeezed into a triangular peninsula between Oman and the Persian Gulf, here each emirate has a bizarre handful of Swiss cheese-like exclaves within fellow emirates’ territories.

With the exception of Dubai—a rather clean-cut quadrilateral wedge with merely one small non-contiguous exclave on the border with Oman, and Umm al Quwain—the emirates of Sharjah, Ajman, Ras al-Khaimah, and Fujairah are a territorial jumble of overlapping fiefdoms that would give the Holy Roman Empire a headache.

Yet if the British Empire acquired a reputation for unsatisfactory exit strategies in Northern Ireland, Palestine, Cyprus, or Kashmir, it took ample precautions in the Trucial States.

Particularly in response to border clashes between Abu Dhabi and Dubai in the 1940s, the British raised a small paramilitary force officered by Brits and manned by members of the Arab Legion to keep the peace in the interior of the Trucial States, areas where imperial interests otherwise scarcely ventured.

Originally called the Trucial Oman Levies, this body was renamed the Trucial Oman Scouts in 1956. In addition to keeping the peace between competing emirates, the Scouts were tasked with suppressing banditry and the slave trade, the other booming pre-petroleum source of indigenous wealth in Abu Dhabi apart from pearls.

Having announced its impending departure a decade after the discovery of oil, London realized that without clearly demarcated boundaries between each emirate, the risk of violence after withdrawal was high.

Thus in the late 1960s, the Scouts were dispatched to the interior with camels and Land Rovers to conduct a country-wide survey to determine which emirate each village pledged its allegiance to. Once ascertained, these tribal and often personal allegiances became the bedrock of each emirate’s “sovereignty” on the eve of the Brits’ departure.

The resultant clutter of internal frontiers is the product of this democratically patriarchal top-down method, and has kept the peace to this day.

The Sage of Abu Dhabi

Granted, this nearly seamless transition is also a tribute to the legacy left by Sheikh Zayed, inaugural president of the UAE from 1971 until his death in 2004.

Ensuring the cash- and carbon-poor northern emirates were given lucrative subsidies to (nearly) develop in step with Abu Dhabi, the fount of liquid black fortune, and Dubai, the savvy commercial entrepí´t, was hardly pre-ordained.

Rather, it took farsighted leadership. That Sheikh Zayed was the man of the hour, and the era, was never in doubt.

Nor was it by chance.

After four decades of his brother Shakhbut’s rule (1928-1966), even gentle Zayed’s sudden rise to power confirms the age-old adage that political power grows from the barrel of a gun; in the context of the newly oil-rich 1960s, it also now sprang from the barrel of oil.

For when Shakhbut proved reluctant to dole out the proceeds of Abu Dhabi’s recently discovered oil (1961), he was quietly deposed by the British-backed Trucial Oman Scouts in a bloodless coup in 1966. Zayed replaced him.

Now the coffers flowed, ensuring enough domestic tranquility to unite all seven emirates under his leadership within five short years.

Taking this mettle and charm to the rest of the region, within a decade he had persuaded Saudi Arabia, Bahrain, Kuwait, Qatar, and Oman to join the UAE in the creation of the Gulf Cooperation Council (GCC) in 1981.

The Doyen(s) of Dubai

If Abu Dhabi’s leadership and Sheikh Zayed’s political acumen were integral to every part of this story, it’s only one half of the tale.

The other is the extraordinary rise of Dubai as the UAE’s hyper-cosmopolitan metropolis, a city that now rivals New York, London, and Hong Kong as a diverse and dynamic global center of trade.

It contrasts sharply with Abu Dhabi, which underwent a nearly overnight transformation from desert home to a nomadic population to a maze of air-conditioned glass, steel, and concrete towers.

Still a far cry from what it would later become, Dubai was by the turn of the 20th century, already a focal point for Indian, Persian, Arab, and Baluchi merchant families. When Reza Shah enforced harsher customs duties at Iranian ports in the 1920s, the number of Iranian merchants blossomed all the more.

The trend has continued more or less ever since. As oil allowed the economies of the Gulf and Middle East to flourish in the latter half of the 20th century, Dubai rapidly became a thriving re-export hub for the entire region, particularly Saudi Arabia and Iran.

In the 1960s it began moves to dredge Dubai Creek to create a modern port.

Just as Buenos Aires and Chicago mushroomed in the 19th century by moving the wealth of their hinterlands to the outside world, so Dubai quickly blossomed as a hub for exporting Arabian crude to global markets with its new port, operated today by Dubai World.

In the words of economist Edward Glaeser, “Dubai has condensed three different stages of growth into less than 50 years.”

Much of its additional growth was made possible by the 1985 creation of the Jebel Ali Free Zone, which offered strong infrastructure, easy permits, and minimal taxation to businesses of all shapes and sizes.

In the mold of Singapore and Hong Kong, Dubai combined light regulation with strong infrastructure, economic freedom, and intelligent economic policies. Before long it was not only a Middle Eastern hub, but an Indian one too. With its easy access to Mumbai, Dubai soon became to the Subcontinent what Singapore was to Southeast Asia and Hong Kong to mainland China: a bastion of stability in a region often marked by turmoil and state overreach.

You Say You Want a Revolution

Distraught Iranians gather at Dubai airport on July 3, 1988 awaiting news of relatives aboard an Iranian airliner shot down by a US missile over the Persian Gulf

It was the 1979 Iranian Revolution that first fired many of the emirate’s re-export engines, as merchants looking to ply their wares in the Islamic Republic went through Dubai to avoid the American embargo during the hostage crisis.

Though the emirate did suffer during the Iran-Iraq War (1980-1988), particularly as Iranian foreign currency reserves dwindled, the Lebanese Civil War (1975-1990) had the opposite effect. Despite attempts by Saudi-Lebanese billionaire Rafik Hariri to the contrary, the widespread capital flight from Beirut to Dubai was never reversed.

Though Dubai is unlikely to assume the cultural mantle Beirut once held in the Arab world, it more than replaced the Lebanese capital as the sybaritic seat of the Middle East. Ongoing war, drought, and social devastation in the greater Levant all but guarantee this trend will continue—while the Emirates’ deft but reticent support of both US-led Gulf wars have secured its place in Uncle Sam’s eyes, not least with the latter’s active use of the Al Dhafra Air Base.

With regards to Iran, almost any situation bar nuclear war benefits Dubai: on the one hand, continued sanctions against the largest country in the Gulf will continue to send Iranian merchants and middlemen to the Emirati port.

On the other, whatever economic uptick occurs from mended Iranian relations with the US (and by default the global economy) will only bolster the desert cosmopolis. For as long as the mullahs remain in power, consumers and pleasure-seekers of every stripe will flock to the so-called ‘City of Superlatives.’

Courses Less Charted

To be sure, periodic fears have arisen in the UAE regarding legal limitations to foreign ownership, which happily never transpired. In all the upheavals of recent decades (the first and second Gulf wars; the Arab Spring; the Syrian catastrophe), far and away the most deleterious were the financial crash of 2008-9 and the collapse in oil prices from 2014-present.

Luckily, Abu Dhabi had the muscle to bail out its exuberant brother after housing prices collapsed in 2008-9. Whether it could do so again with oil at nearly USD45/barrel is another question.

Ironically, the secret strength of Abu Dhabi and Dubai lies in their ability to remain equally within and without the sweep of history: on the one hand, as rock-hard beacons of good governance and economic freedom in an ever-tenuous region; on the other, as a snapshot of a cosmopolitan world-to-be contingent upon a tainted commodity of the past.

As such, the future of the country relies on two semi-conflicting factors: first, its ability to use the proceeds of oil to move from a carbon- to a knowledge-based economy; and second, its power to remain more attractive to capital and foreign labor than any competing world-region (South Asia, Iran, the Levant, or the UK/Dominion states).

Indeed, the economic, financial, regulatory, and even religious conditions of the Emirates must remain one step ahead of Karachi, Mumbai, Istanbul, Beirut, and Jeddah. Though a cakewalk today, its ascendance in each of these regards is hardly guaranteed. As former prime minister of Singapore Lee Kuan Yew is reputed to have said whilst visiting Lebanon in the 1960s: “I can only hope that Singapore by the year 2000 is on a par with Beirut.”

The silk roads built Merv, the riverboats St Louis, the shipyards Glasgow, and the automobile Detroit. Each is now cast down, a phantom of its former self, lost to foregone, if unforeseen, innovations. How will the Emirates avoid following suit?

If the UAE’s record since 1971 is anything to go by, it will continue to thrive in a post-carbon world economy. Until then, the less complacency, the better.