Most of Dubai's history is known only to the desert and the sea. There's little information about pre-Islamic activity in this corner of the Arabian Peninsula. After the spread of Islam in the 7th century, the Umayyad Caliph invaded southeast Arabia and drove out the Sassanians, one of the great powers of the time. Several artifacts from the Umayyad period have been discovered in modern-day Jumeirah as a result of excavations carried out by the Dubai Museum.
Few written records were kept before the 19th century, and much of the knowledge of Dubai's past was passed on orally between generations. Documented records of a Dubai village exist only after 1799. Those who first settled here did so around the creek. Traditional economic activity focused on fishing, pearling, herding sheep and goats, and cultivating dates and other small-scale agriculture. For centuries, this region was embroiled in dynastic disputes. It became known as the Pirate Coast because raiders from the modern-day emirates often attacked foreign ships and each other.
Around 1830, a branch of the Bani Yas tribe - ancestors of the Bedouins who inhabited the harsh deserts around Abu Dhabi - left Abu Dhabi and settled in a small fishing village at the mouth of the Dubai Creek. Dubai, under the Al Maktoum dynasty of the Bani Yas tribe that rules the emirate today, became one of seven sheikhdoms under British protection. It used British maritime protection to thwart attacks by the Ottoman Empire and competing sheikhdoms and to advance trade relations with neighboring states. The advent of the pearling industry drove Dubai's growth, and by the 1870s, the emirate had become the main trading port along the Gulf coast. Dubai has always taken a laissez-faire attitude toward trade, and this liberal moneymaking posture attracted merchants from Iran, India, and elsewhere in the Arabian Peninsula. By the early 1900s, Dubai boasted the region's biggest trade markets. The dhow was the sailing craft that made trade possible, and the souk was the destination. You will see dhows continuing to operate along the creek today, as well as souks in Deira that still bustle with activity.
By the 1950s, Dubai had become a small but successful regional trading and fishing post, although its population was still not much more than 5,000 people. The pearling industry had died out in the 1930s, a result of World War I, the Great Depression, and the cultivation of cultured pearls elsewhere. The discovery of oil in 1967 and its production soon after generated a period of rapid development that forever altered Dubai. An influx of foreign workers, primarily from South Asia, led to exponential population growth.
In 1968, the U.K. announced, as a result of cutbacks in its foreign operations, that it would end its treaty relationships with the seven emirates, then called the "Trucial States" because of the truces that had been negotiated, as well as with Bahrain and Qatar. The nine entities tried unsuccessfully to establish an independent country, and Bahrain and Qatar went their own way. In 1971, Dubai joined Abu Dhabi, Sharjah, Ajman, Umm Al Quwain, Fujairah, and a year later Ras Al Khaimah to create the United Arab Emirates (U.A.E.). This decision was especially important in ending a long history of border disputes between Abu Dhabi and Dubai, which had even led to war between the two in 1947.
Dubai's rulers sought to put Dubai on the map through a remarkable plan for development. The late Sheikh Rashid bin Saeed Al Maktoum (1912-90) is credited with much of Dubai's rapid growth, focusing Dubai's energies on trade, diversifying the economy away from the shrinking oil supply, and building commercial infrastructure to attract investment. Rather than spending the oil money on palaces and weapons, as happened in some oil-rich states, he wisely channeled much of the revenue into new investments. Oil and trade remained the big industries, but in 1979, Dubai opened the Jebel Ali Free Zone to attract companies from around the world to do business here.
This expansionary vision has been continued by his son, Sheikh Mohammed bin Rashid Al Maktoum, U.A.E. Vice President, Prime Minister, and Ruler of Dubai. Sheikh Mohammed has pushed effectively to transform Dubai into the main trade, financial, and entertainment center of the region. He has encouraged competition among developers to come up with the most innovative projects. The Dubai government established new economic clusters based on its success with the Jebel Ali Free Zone, such as Media City, Internet City, Healthcare City, and the Dubai International Financial City. In recent years, it has focused increasingly on growth in the tourism and real estate sectors, as well. Now that Dubai's oil industry is all but exhausted, the emirate's economy is more effectively diversified.
Dubai's political system has been less dynamic, operating under the framework of a constitutional monarchy. The political relationship between the seven emirates developed as a loose federation rather than a centralized system. Each emirate has its own hereditary ruler and enjoys substantial autonomy. Dubai is the second-most powerful emirate after Abu Dhabi, and the other five emirates are substantially less wealthy and influential. With Abu Dhabi's bailout of Dubai during the 2009 financial crisis, Abu Dhabi's relative power grew stronger vis-à-vis that of Dubai.
Under the government structure, the President of the U.A.E., Sheikh Khalifa bin Zayed bin Sultan Al Nahyan, is the Ruler of Abu Dhabi and the Vice President is the Ruler of Dubai. There's no universal suffrage or political parties in the U.A.E., where leaders are chosen by their dynastic positions. Democracy is slowly making an appearance into the political system, however. At the end of 2006, the U.A.E. held its first-ever limited elections to select half the members of the Federal National Council (FNC), a 40-member consultative body with 20 members appointed by emirate rulers and 20 elected. One woman won election to the FNC and seven more women were appointed as council members.