The Trucial States of the Persian Gulf coastline provided the UK control of their defense and foreign affairs in 19th century treaties. In 1971, 6 of these states - Abu Dhabi, 'Ajman, Al Fujayrah, Ash Shariqah, Dubayy, and Umm al Qaywayn - combined to form the United Arab Emirates (UAE). They were joined in 1972 by Ra's al Khaymah. The UAE's per capita GDP is on par with those of leading West European countries. Its high oil earnings and its moderate diplomacy position have permitted the UAE to play an essential role in the affairs of the area. For a bit more than three years, oil and international finance drove the UAE's economy. Nevertheless, in 2008-09, the confluence of falling oil prices, collapsing realty costs, and the international banking crisis struck the UAE specifically hard. The UAE has basically avoided the "Arab Spring" discontent seen in other places in the Middle East, though in March 2011, political lobbyists and intellectuals signed a petition requiring higher public involvement in governance that was extensively circulated on the Internet. In an effort to stem possible additional unrest, the federal government announced a multi-year, $1.6-billion facilities investment prepare for the poorer northern emirates and boldy pursued advocates of political reform.
The UAE has an open economy with a high per capita income and a large yearly trade surplus. Effective efforts at financial diversification have reduced the portion of GDP based upon oil and gas output to 25 %. Since the discovery of oil in the UAE a bit more than Three Decade ago, the country has undergone a profound transformation from an impoverished area of little desert principalities to a modern state with a high standard of living. The government has increased spending on task creation and facilities growth and is opening up utilities to greater private sector participation. The country's free trade zones - providing 100 % foreign ownership and zero taxes - are helping to draw in foreign investors. The global monetary crisis of 2008, tight global credit, and deflated possession costs restricted the economy in 2009. UAE authorities aimed to blunt the crisis by increasing spending and improving liquidity in the banking sector. The crisis struck Dubai hardest, as it was greatly exposed to depressed real estate prices. Dubai lacked enough cash to fulfill its debt responsibilities, prompting worldwide concern about its solvency and ultimately a $20 billion bailout from the UAE Reserve bank and Abu Dhabi-emirate government that was refinanced in March 2014. Reliance on oil, a huge expatriate workforce, and growing inflation pressures are significant long-term obstacles. The UAE's strategic plan for the next few years concentrates on economic diversity and producing more job chances for nationals through enhanced education and enhanced economic sector work.