Oil Discovery in the United Arab Emirates: Historical Research

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Introduction

Nowadays, millions of people know the United Arab Emirates (UAE) as a country with many luxury hotels and a symbol of industrial progress. It is hard to image than about seven decades ago this land was “a wide landscape of sand and mud-flat dotted in some parts with bushes and trees” (Henderson 11). The UAE population depended on the sea and the results of pearl diving and fishing seasons. The quality of life was one of the least developed in the world. However, the situation was significantly changed in the 1950s when oil was first discovered near the coast of Abu Dhabi (“How Was the UAE Founded?”). Evident economic and social transformations were firstly observed in the 1960s. Within a short period of time, the UAE became a strong trade partner and a core of the tourism industry in the Gulf region. People pay attention to this federation of seven states because, despite actually existing conservatism and authoritarian political powers, the UAE stays liberal and tolerate with other cultures. In this paper, the discovery of oil will be discussed with its further impact on the UAE economy and social life.

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Discovery

The period before the oil discovery in the UAE was known as the time of British domination and ruling. It was important for the British to establish good trade relations with India, and they used the UAE due to unremarkable but rather convenient geographical location. With time, America penetrated the country and established its orders, introducing its intentions as protective ones. However, as soon as Gulf countries discovered oil on their land, the decision to use such natural richness in order to strive for independence and social justice was made. Compared to Kuwait or Saudi Arabia where oil was discovered before the 1950s, the UAE was one of the last Gulf countries to withdraw business relationships with Britain. Good reserves of oil were found out by Sheikh Zayed bin Sultan Al Nahyan in Abu Dhabi in 1958 (Zakaria). This person later became the ruler of Abu Dhabi and the founder of the Abu Dhabi National Oil Company (ADNOC) (Zakaria). As a result, the British Empire lost its power and investments, and the United States was not able to continue its contracts.

As soon as Abu Dhabi discovered oil and began its production and exportation to achieve positive results and freedoms, thoughtful cooperation between seven emirates began. The example of Sheikh Zayed inspired the leaders of other emirates. In 1966, Dubai was the emirate where oil was discovered. In 1969, oil export from Dubai was launched, and new trade relationships were developed in a short period of time due to the already defined prospects of the industry. In several years, many oil departments were opened through the UAE and then merged in the UAE Petroleum Ministry. Regardless of the fact that almost all the emirates had access to oil, “the Emirate of Abu Dhabi in particular, owns more than 90 per cent of oil and gas reserves in the UAE” (As’eed and Shorab 141). Oil discovery provided the UAE citizens with a new perspective and a number of opportunities. The level of British and American impact of Arab economy was decreased, and the country experienced considerable growth in different fields, including tourism, international trade, and the petrochemical industry.

Political Transformations

When British and American domination was over on the UAE land, it was necessary for the citizens to strengthen their positions and made serious decisions. Sheik Zayed set the goal to “establish closer ties with neighboring emirates” (“How Was the UAE Founded?”). The ruler of Dubai supported the idea and offered the “Union Accord” that promoted a federation with equal rights for all the seven emirates and closest territories included. Qatar and Bahrain did not want to participate in the discussion. The final outcome was the creation of the United Arab Emirates on December 2, 1971 (Ras Al Khaimah entered the federation in 1972) (“How Was the UAE Founded?”). In less than a decade, the country joined the United Nations and the Arab League, demonstrating its goals and opportunities to the world. According to the UAE’s constitution, each emirate had the right to control its own oil production and develop resources (International Business Publications 113). Certain political powers were gained due to the discovery of oil, and the outcomes were observed in both the UAE economy and social life.

Impact on the UAE Economy

Export of oil opened new options for the citizens of the UAE in the 1970s. International relationships and export profits improve the quality of work and living standards. According to the investigations by Dr. Fatima Al Sayegh, before the discovery of oil, Emirati citizens produced what they needed, lived an ordinary village life, and used simple products to feed and build houses (Zakaria). Oil revenues predetermined the economic development of the country, but several attempts were made to diversify its economy and reduce dependence on oil and gas (International Business Publications 112). At the end of the 1990s, the reserves of oil in the country included about 97.8 billion barrels, constituting around10% of the world total (International Business Publications 113). In the 21st century, the UAE continues increasing its oil reserves up to 98.7 billion barrels at the beginning of the 2000s (As’eed and Shorab 141). The UAE reputation was well established, and the country was chosen to hold meetings of the World Bank and the International Monetary Fund (As’eed and Shorab 141). However, global crises challenged the development of the country, as well as the development of other nations.

Compared to many countries, the UAE is able to recover from economic crises fast. It is explained by economic openness and the desire to provoke free and beneficial trade movements. Such an approach encouraged new investments and positive changes in gross production. For example, in 1995, GDP was 156.9 billion dirhams, and in 2001, it rose up to 248.8 billion (As’eed and Shorab 142). Annually, 8-10% increase in GDP is still observed in the country (As’eed and Shorab 142). Due to regular access to natural resources and oil export, low inflation and unemployment rates are observed today. People are satisfied with the opportunities they received, and the government tries to maintain high living standards and meet the needs of every citizen.

Changes in Social Life

Taking into consideration the fact that the discovery of oil resulted in multiple economic and political changes, it is expected to observe certain transformations in social life. Zakaria made a strong remark on this point that “the wealth and oil might have changed the Emirati lifestyle, but haven’t changed much about the society that’s still connected to core values and traditions”. It means that oil production and export added multiple benefits to the quality and the style of life in the UAE.

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Still, the role of traditions cannot be ignored, and Emirati citizens prove their loyalty and respect to the history of the land. In some emirates, people are able to enjoy “the simplicity of the place”, their remoteness, and people’s charm (Henderson 29). Therefore, oil did not spoil the nation but made it more stable and confident compared to the characteristics that were inherent to it a century ago. The absence of other nations’ domination and unity not only between people but between emirates can serve as a good example for other countries to follow. In 2019, it will be a 48th anniversary of the UAE foundation, and the road chosen, as well as the progress achieved, is a good reason for pride and recognition.

Conclusion

In general, the discovery of oil in the UAE is characterized by multiple changes in the country’s politics, economy, and social life. The leaders of emirates were able to recognize the potential benefits of this industry and diversify their pearl diving and fishing with oil extraction and export. With time oil-related products and services helped to improve and stabilize international trade relationships. Instead of British domination and American control, Emirati people preferred local union and personal freedoms. As a result, this country establishes new standards on the quality of life, the effectiveness of tourism, and business behaviors. The UAE could prove that despite its religious and social norms and restrictions, it is possible to stay loyal and respectful in the relationships with the representatives of other nations.

Works Cited

As’eed, Mohammad, Tohail and Yousef Mohammad Shorab. United Arab Emirates Society: Originality & Modernity. Translated by Hashim Al Tahir. 3rd ed., Al-Falah Books, 2016.

Henderson, Edward. This Strange Eventful History: Memoirs of Earlier Days in the UAE and the Sultanate of Oman. Motivate Publishing, 1988.

“How Was the UAE Founded?” Euronews, 12 Jul. 2018, www.euronews.com/2018/12/07/how-was-the-uae-founded. Accessed 25 Mar. 2019.

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International Business Publications. How to Invest, Start and Run Profitable Business in the UAE Guide: Practical Information, Opportunities, Contacts. International Business Publications, 2014.

Zakaria, Sherouk. “Before the Oil Era Began, It Was Simple Village Life in UAE.” Khaleej Times, 2018, Web.

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Premium Papers. 2022. "Oil Discovery in the United Arab Emirates: Historical Research." January 21, 2022. https://premium-papers.com/oil-discovery-in-the-united-arab-emirates-historical-research/.

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Premium Papers. "Oil Discovery in the United Arab Emirates: Historical Research." January 21, 2022. https://premium-papers.com/oil-discovery-in-the-united-arab-emirates-historical-research/.