United Arab Emirates

Only 27% of the total population of 2.4 million are UAE citizens. The rest include significant numbers of other Arabs--Palestinians, Egyptians, Jordanians, Yemenis, Omanis--as well as many Iranians, Pakistanis, Indians, Filipinos, and west Europeans.

The majority of UAE citizens are Sunni Muslims with a small Shi'a minority. Most foreigners also are Muslim, although Hindus and Christians make up a portion of the UAE's foreign population.

Educational standards among UAE citizens population are rising rapidly. Citizens and temporary residents have taken advantage of facilities throughout the country. The UAE University in Al Ain had roughly 16,000 students in 2000. A network of technical-vocational colleges opened in 1989.

The UAE was formed from the group of tribally organized Arabian Peninsula shaikhdoms along the southern coast of the Persian Gulf and the northwestern coast of the Gulf of Oman. This area was converted to Islam in the 7th century; for centuries it was embroiled in dynastic disputes. It became known as the Pirate Coast as raiders based there harassed foreign shipping, although both European and Arab navies patrolled the area from the 17th century into the 19th century. Early British expeditions to protect the India trade from raiders at Ras al-Khaimah led to campaigns against that headquarters and other harbors along the coast in 1819. The next year, a general peace treaty was signed to which all the principal shaikhs of the coast adhered. Raids continued intermittently until 1835, when the shaikhs agreed not to engage in hostilities at sea. In 1853, they signed a treaty with the United Kingdom, under which the shaikhs (the "Trucial Shaikhdoms") agreed to a "perpetual maritime truce." It was enforced by the United Kingdom, and disputes among shaikhs were referred to the British for settlement.

Primarily in reaction to the ambitions of other European countries, the United Kingdom and the Trucial Shaikhdoms established closer bonds in an 1892 treaty, similar to treaties entered into by the U.K. with other Gulf principalities. The shaikhs agreed not to dispose of any territory except to the United Kingdom and not to enter into relationships with any foreign government other than the United Kingdom without its consent. In return, the British promised to protect the Trucial Coast from all aggression by sea and to help out in case of land attack.

In 1955, the United Kingdom sided with Abu Dhabi in the latter's dispute with Saudi Arabia over the Buraimi Oasis and other territory to the south. A 1974 agreement between Abu Dhabi and Saudi Arabia would have settled the Abu Dhabi-Saudi border dispute; however, the agreement has yet to be ratified by the UAE Government and is not recognized by the Saudi Government. The border with Oman also remains officially unsettled, but the two governments agreed to delineate the border in May 1999.

In 1968, the U.K. announced its decision, reaffirmed in March 1971, to end the treaty relationships with the seven Trucial Shaikhdoms which had been, together with Bahrain and Qatar, under British protection. The nine attempted to form a union of Arab emirates, but by mid-1971 they were unable to agree on terms of union, even though the termination date of the British treaty relationship was the end of 1971. Bahrain became independent in August and Qatar in September 1971. When the British-Trucial Shaikhdoms treaty expired on December 1, 1971, they became fully independent. On December 2, 1971, six of them entered into a union called the United Arab Emirates. The seventh, Ras al-Khaimah, joined in early 1972.

Prior to the first exports of oil in 1962, the UAE economy was dominated by pearl production, fishing, agriculture, and herding. Since the rise of oil prices in 1973, however, petroleum has dominated the economy, accounting for most of its export earnings and providing significant opportunities for investment. The UAE has huge proven oil reserves, estimated at 98.2 billion barrels in 1998, with gas reserves estimated at 5.8 billion cubic meters; at present production rates, these supplies would last well over 150 years.

In 2000, the UAE produced about 2.2 million barrels of oil per day--of which Abu Dhabi produced approximately 85%--with Dubai, and Sharjah to a much lesser extent, producing the rest.

Major increases in imports occurred in manufactured goods, machinery, and transportation equipment, which together accounted for 70% of total imports. Another important foreign exchange earner, the Abu Dhabi investment authority--which controls the investments of Abu Dhabi, the wealthiest emirate--manages an estimated $150 billion in overseas investments.

More than 200 factories operate at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transshipment enjoy a 100% duty exemption. A major power plant with associated water desalination units, an aluminum smelter, and a steel fabrication unit are prominent facilities in the complex.

Except in the free trade zone, the UAE requires at least 51% local citizen ownership in all businesses operating in the country as part of its attempt to place Emiratis into leadership positions.

As a member of the Gulf Cooperation Council (GCC), the UAE participates in the wide range of GCC activities that focus on economic issues. These include regular consultations and development of common policies covering trade, investment, banking and finance, transportation, telecommunications, and other technical areas, including protection of intellectual property rights.