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The first human settlement in the history of Dubai was in approximately 3000 BC,when the area was inhabited by nomadic cattle herders. In the 3rd century AD, the area came under the control of the Sassanid Empire which lasted until the 7th century, when the Umayyad Caliphate took control and introduced Islam to the area. The area was sustained by fishing and pearl diving for a thousand years, with the first records of the town being made in 1799 when the Bani Yas clan established it as a dependency of Abu Dhabi. Dubai became a separate Sheikhdom in 1833, when the Al-Maktoum dynasty of the Bani Yas clan (initially from Abu Dhabi) took it over peacefully. The invention of artificial pearls in 1926 and the Great Depression in 1929 caused a collapse in the international pearl market, which resulted in Sheikh Saeed looking for an alternative source of income and Dubai becoming one of the leading re-export ports in the world. In 1966, oil was discovered in Dubai, which changed the country beyond recognition and led to Dubai becoming the vibrant, modern, business-centred city-state it is today.
Records of the area where the emirate of Dubai is situated are very rare for any period before the 18th century.
During the expansion of the Sheikh Zayed Road between 1993 and 1998, remnants of a mangrove swamp were uncovered which were dated to approximately 7000 BC. It is thought that by about 3000 BC, the coastline had moved seaward sufficiently towards the present-day coastline and the area became covered in sand.
As it became more inhabitable, Nomadic cattle herders used the area to live and herd in. The date palm began to be grown locally in 2500 BC, and was the first instance of the land being used for agricultural purposes. The herders worshipped the god Bajir and various evidence suggests links to the mysterious Magan civilisation, who it is thought controlled the copper trade of this part of the ancient world, and of which there are archaeological sites in Bahrain.
For the next about 2000–2700 years there are no more details, probably because of the desertification, insignificance, and remoteness of the area, until the area came part of the "Maka" satrapy, the southern most satrapy of the Achaemenid Empire, and followed by the Sassanian Empire, the last pre-Islamic Iranian Empire, several hundred years later in the 3rd century AD. Recent excavations of the Jumeirah area of Dubai have unearthed a 6th-century caravan station suggesting the area was sparsely inhabited during this period.
The Umayyads regarded as the first Muslim dynasty, introduced Islam to the area in the 7th century and sparked the revitalization of the area, opening up trade routes supported by fishing and pearl diving to eastern regions such as modern-day Pakistan and India, with reports of ships travelling as far as China to trade. The earliest written mention of the area of Dubai was in 1095, by Abū 'Ubayd 'Abd Allāh al-Bakrī, in his Mojam Ma Ostojam men Asmae Al belaad wal Mawadhea, in which he describes many places of the world compiled from other accounts of them,. It was not until 1799 that the town had its first record. However the Venetian Gaspero Balbi, a renowned pearl merchant, when visiting in 1580, remarked on the area and how many Venetians were working there in the pearl industry.
In the early 19th century, the Al Abu Falasa dynasty (part of the House of Al-Falasi) of the Bani Yas tribe established Dubai, which remained a dependent of Abu Dhabi until 1833. On 8 January 1820, the sheikh of Dubai and other sheikhs in the region signed the "General Maritime Peace Treaty" with the British government, which aimed to end plundering and piracy in the region and was the first formal denunciation of the slave trade in history. However, in 1833, the Al Maktoum dynasty (also descendants of the House of Al-Falasi) of the Bani Yas tribe left the settlement of Abu Dhabi and took over Dubai from the Abu Fasala clan without resistance, led by Maktoum bin Butti, the founder of the present day al-Maktoum dynasty. In 1841 the town was hit by a devastating smallpox outbreak which forced many to relocate east to the town of Deira, Dubai. In 1853, in an attempt to further halt the endemic piracy, the British signed another truce, agreeing to stay out of administration of the region in return for a reduction in piracy. This also had the side effect of the area becoming known as the Trucial States. Then in 1894, a fire swept through Deira, burning down most of the homes, however perfect geographical positioning and thriving business enabled the rebuilding of the city. The success of the area led Sheikh Maktoum to sign an exclusive business deal with the British in 1892, making Dubai a British protectorate, and in 1894, granted full tax exemption for all foreign traders. By 1903, the Sheikh had succeeded in convincing a major British steamship line to make Dubai a port of call. Merchants from Lingah looked across to the Arab shore of the Gulf finally making their homes in Dubai. They continued to trade with Lingah, however, as do many of the dhows in Dubai Creek today, and they named their district Bastakiya, after the Bastak region in southern Persia. At this time, almost a quarter of the population was foreign, which seems trivial when compared to the 90% it is today.
After various rulers, Sheikh Saeed bin Maktoum bin Hasher Al Maktoum who became Ruler in 1912, was the first Ruler to rule for a substantial period of time and is regarded by many as one of the fathers of Dubai. The times of prosperity thanks to the pearl industry continued solidly through until the Great Depression of 1929. The emergence of artificial pearls had begun to hit the economy of Dubai, and coupled with the effects of the depression caused the Sheikh to explore other opportunities for expansion. In 1929, he was briefly deposed and succeeded by Sheikh Mani bin Rashid, an uncle, however three days later he was restored to the throne and ruled until his death. This resulted in the emergence of Dubai as the premier re-export business port, whereby goods are imported into a duty-free port and immediately exported to another market.
Dubai has the main entrepôt in the Persian Gulf and the busiest trading port since 1900, with commerce being the main source of revenue for the emirate. The merchant class in Dubai played a key role in restructuring the economy and government decision-making in the pre-oil era of Dubai's development. Today merchants play a fundamental role in economic affairs and the political structure. In addition, again they have taken on roles as service suppliers, urban planners, culture mediators, and internationalists representing the region throughout the world.
Dubai suffered economically after 1920 due to the collapse of the pearl industry, the Great Depression of the 1930s, and the loss of extensive trade networks during World War II. Until the surge of oil revenues in the late 1960s, political instability and merchant unrest existed and constituted an organized attempt to subvert British control and the ruling Al-Maktoum family. African slavery was practiced until the 1960s. The uprising of 1938 in Dubai was the culmination of a decade of grievances and minor rebellions against the autocratic rule of Shaykh Sa'id bin Maktum (ruled 1912-58). In the 1930s the Trucial Coast was characterized by great poverty resulting primarily from a decline in the pearl trade. Much of the initiative for reform sprang from an attempt to ameliorate economic conditions—the leaders of the movement having previously been successful pearl merchants. The new government established in October 1938 lasted only a few months before Shaykh Sa'id with Bedouin support was able to overthrow it in March 1939. The collapse of the reform movement is attributable to the role played by British agents and the weakness of the political structure that was set up.
A dispute between Dubai and Abu Dhabi regarding their border escalated into armed conflict between the two states, with Dubai attacking a number of Abu Dhabi towns in the country's interior. Arbitration by the British in 1949 resulted in the creation of a buffer frontier running south eastwards from the coast at Ras Hasian. A formal compromise was not reached until 1979, eight years after the creation of the UAE.
In 1958, upon the death of Saeed bin Maktoum Al Maktoum, Sheikh Rashid bin Saeed Al Maktoum became Ruler. Rashid al Maktoum is widely regarded as the driving force behind the expansion of Dubai, causing its massive expansion, with the aid of the discovery of oil. The dredging of Dubai Creek in 1963, enabling any vessel to dock at the port, caused the gold re-export market to take off, ensuring Rashid bin Saeed Al Maktoum was able to begin the building of vital infrastructure in partnership with the British. Since the beginning, Dubai was constantly at odds with Abu Dhabi. In 1947, a border dispute between Dubai and Abu Dhabi on their northern border erupted into war between the two states and forced the involvement of the British and the subsequent creation of a buffer zone which resulted in a temporary ceasefire. However, border disputes between the emirates continued even after the formation of the UAE and it was only in 1979 that a formal compromise was reached that ended hostilities between the two states, by allowing Abu Dhabi the control of the rest of the UAE, while leaving Dubai to rule many of its own affairs, especially when related to trade.
The major turning point in the history and fortunes of Dubai was the discovery of oil in 1966. Coupled with the joining of the newly independent country of Qatar and Dubai to create a new currency, the Riyal, after the devaluation of the Persian Gulf rupee which had been issued by the Government of India, it enabled Dubai to rapidly expand and grow. Once the first shipment of oil was made in 1969, the future of Dubai as an autonomous state was secured, and its ability to dictate policy in later years to the UAE was cemented.
Britain left the Persian Gulf in the early part of 1971, having announced their intentions in 1968, causing Dubai and Abu-Dhabi, in conjunction with five other emirates to form the United Arab Emirates. Dubai and Abu-Dhabi ensured in the negotiations that between them they could control the country effectively, enabling even greater expansion as seen today. In 1973, Dubai joined the other emirates, in introducing the UAE dirham, the uniform currency of the UAE. Dubai and Abu Dhabi between them now hold the majority of control in the UAE, which was part of their conditions for joining. To enable this, Abu Dhabi and Dubai are the only emirates who have veto power over matters of national importance, whereas the other emirates only have a vote on such matters. In addition to this, Dubai is represented by eight members on the Federal National Council, of whom there are forty in total. Dubai and Ras al Khaimah are the only two states who retain their own judicial courts, whilst the others are part of the federal justice system of the UAE. The Jebel Ali Free Zone was introduced in 1979, providing companies with unrestricted import of labour and export of capital, which helped to jumpstart the influx of global companies seen today.
The death of Sheikh Rashid al-Maktoum resulted in the accession of Sheikh Maktoum bin Rashid Al Maktoum to the throne. The Persian Gulf War of 1990, in which Dubai as part of the UAE provided military aid to the coalition, unsettled the economy, however during the middle of the 1990s this stabilised and many foreign trading communities moved their businesses to Dubai. Dubai continued to foster political alignment with the western world & during the 2003 Invasion of Iraq, they provided refueling bases to allied forces in the Jebel Ali free zone as they did during the Persian Gulf War. Global increases in oil prices allowed Dubai to focus on rapid development of key infrastructure. The success of the Jebel Ali free zone caused the development of clusters of new free zones, including Dubai Internet City, an internet technology area with ownership & tax related benefits, Dubai Media City a tax-free zone to increase Dubai's presence in the worldwide media and Dubai Maritime City, which will have many facilities, including waterfronts & harbours. In the past decades, Dubai has become known for its successful building projects, including the Burj Al Arab, the world's tallest freestanding hotel, The Palm Islands, a construction of three artificial islands in the shape of the date palm, on which residential & commercial property will be built and The World Islands, a massive man-made archipelago of 300 islands in the shape of the world, and Burj Khalifa, which is the world's tallest man-made structure. In 2006, upon the death of Sheikh Maktoum al-Maktoum, his brother, Sheikh Mohammed bin Rashid al-Maktoum became Emir, having been de facto ruler for a decade & is also credited with helping to force Dubai's rapid expansion.
The economic depression has hit Dubai extremely hard, due to its dependence on tourism and building which has led to many newspaper reports of construction slowing and in some cases stopping altogether. In an effort to combat the recession, Dubai has announced various tax cutting measures to incentivise businesses in the region.
Dubai has also been in the news for its attitudes towards adultery, which are seen as harsh in the Western World, with cases forcing the intervention of some governments to help its citizens.
Despite the international turmoil over the cost of oil, Dubai is already considered to be the Hong Kong of the Middle East. When the world's oil supply runs out and/or it's no longer needed, Dubai would survive in a new oil-free world unlike Riyadh. Commercial activity in the Dubai region would simply grow instead of wither because Dubai was a major trading center centuries before oil existed. The emirate's trade access with Iran is similar to Hong Kong's trade with the People's Republic of China due to Iran being ostracized by the majority of the Western world.
During the 21st century, Dubai may have to implement policies that move away from globalization and toward localization to conserve their energy resources, provide local jobs to citizens of the United Arab Emirates instead of foreign citizens, and maintain their local decision-making authority. Zoning policies would be adjusted by Dubai's municipal government to promote resource conservation and eliminate sprawl.
In addition to the long running dispute between Abu-Dhabi & Dubai, Dubai was also involved in a dispute with Sharjah with regards to their legal boundaries. Before the British left, there were no exact boundaries defined between the Trucial States, however with the discovery of oil needing boundaries to be decided for concession reasons, Britain was required to define the boundaries. After Julian Walker, a British official (later the British political agent) had surveyed the area, Mr. Tripp, the British political agent, made declarations between 1956 and 1957 defining the boundaries. Although the rulers of both Dubai and Sharjah had agreed in 1954 to accept the rulings made, Dubai's ruler declined to accept the decision. Even after the formation of the UAE, neither state had agreed on the boundaries & so on 30 November 1976, they signed an arbitration compromise under the auspices of the Supreme Council of the Federation. Eventually, the Supreme Council ruled that the decisions were administrative, binding decisions as opposed to arbitral awards, the Tripp boundaries were defined as the border.
The current ruler of Dubai is Sheikh Mohammed bin Rashid Al Maktoum. Like his predecessor, Sheikh Maktoum bin Rashid Al Maktoum, he is also the Vice President and the Prime Minister of the UAE. Having attended school in the United Kingdom, he became part of the everyday running of the country. He has two wives, Sheikha Hind bint Maktoum bin Juma Al Maktoum & HRH Princess Haya bint Al Hussein, the daughter of the King of Jordan. He is widely known for being very involved with horse-racing & his charitable donations, along with his credit for advancing Dubai's infrastructure & economy.