federation of sheikhdoms (2005 est. pop. 2,563,000), c.30,000 sq mi (77,700 sq km), SE Arabia, on the Persian Gulf and the Gulf of Oman. The federation, commonly known as the UAE, consists of seven sheikhdoms: Abu Dhabi (territorially the largest of the sheikhdoms), Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Qaiwain. The city of Abu Dhabi (1991 est. pop. 798,000) in Abu Dhabi is the capital.
The land is largely hot, dry desert. Located in the eastern portion of the federation is a portion of the Jabal al Akhdar Mts. Less than half of the inhabitants of the UAE are Arabs; there are also Persians, Bangladeshis, Baluchis, Indians, and Westerners. Only about 20% of the UAE's population are native citizens. The nonindigenous population is mostly from E and SE Asia and was first attracted by the employment provided by the UAE's petroleum boom. Muslims comprise 96% of the population (80% of these are Sunni, the balance Shiite) and the remaining 4% are largely Christian and Hindu. The official language is Arabic, but Farsi and English are widely used, and Hindi and Urdu are spoken by many of the Asians.
Industries involving the area's oil and natural-gas deposits are still critical to the increasingly diversified economy, but international banking, financial services, regional corporate headquarters, and tourism are also important. The traditional occupations of fishing and pearling are still practiced. Imports include food, manufactured goods, machinery, and chemicals; trading partners are Japan, South Korea, India, the United States, and Great Britain.
The UAE is governed under the constitution of 1971, which was made permanent in 1996. A Federal Supreme Council (FSC), composed of the seven emirate rulers, is the highest constitutional authority in the UAE. A president and vice president are elected by the FSC for five-year terms. The highest legislative body is the unicameral Federal National Council, with 40 members. The members were previously all appointed by the rulers of the constituent states, but beginning in 2006 elections (initially participated in only by a select group of voters) were held for half the members; the rest are still appointed. Local matters are dealt with by the sheikhs. The UAE is a member of the United Nations and the Arab League.
The states that comprise the UAE were formerly known as the Trucial States, Trucial Coast, or Trucial Oman. The term trucial refers to the fact that the sheikhs ruling the seven constituent states were bound by truces concluded with Great Britain in 1820 and by an agreement made in 1892 accepting British protection. Before British intervention, the area was notorious for its pirates and was called the Pirate Coast. After World War II the British granted internal autonomy to the sheikhdoms. Discussion of federation began in 1968 when Britain announced its intended withdrawal from the Persian Gulf area by 1971.
Originally Bahrain and Qatar were to be part of the federation, but after three years of negotiations they chose to be independent. Ras al-Khaimah at first opted for independence but reversed its decision in 1972. After the 1973 rise in oil prices, the UAE was transformed from an impoverished region with many nomads to a sophisticated state with one of the highest per capita incomes in the world and a broad social welfare system. In 1981 the UAE joined the Gulf Cooperation Council (GCC). The fall of the shah of Iran in 1979, the growth of Islamic fundamentalism, and the Iran-Iraq War threatened the stability of the UAE in the 1980s. In 1990, Iraq accused the UAE and Kuwait of overproduction of oil. The UAE participated with international coalition forces against Iraq during the Persian Gulf War (1991). Since the Gulf War the UAE has expanded its international contacts and diplomatic relations. A dispute erupted with Saudi Arabia in 1999 over relations with Iran, a traditional enemy; while Saudi Arabia appeared willing to seek improved ties, the emirates still regarded Iran as a foe. Sheikh Zaid ibn Sultan al-Nahayan, the ruler of Abu Dhabi, was president of the UAE from the founding of the federation until his death in 2004, when his son and heir, Sheikh Khalifa ibn Zaid Al Nahayan, was elected to succeeded him.