Federated Emirates of Arabia

  

Federated Emirates of Arabia الإمارات العربية المتحدة‎
Flag Coat of arms
Anthem: Ishy Bilady (Long Live my Nation) Ishy Biladi File:Ishy Bilady.ogg
Federated Emirates of Arabia (green)
Capital	Abu Dhabi
Largest city	Dubai
Official languages	Arabic (Gulf Arabic)
Demonym(s)	Emiratis
Government	Federal Islamic semi-constitutional monarchy
• President	Mohamed bin Zayed Al Nahyan
• Prime Minister	Tamim bin Hamad Al Thani
• Vice President	Haitham bin Tariq Al Said
Establishment
• Federation under British Rule	March 1953
• Independence	December 1961
Area
• Total	409,263 km2 (158,017 sq mi)
Population
• 2021 census	18,460,015
• Density	50.08/km2 (129.7/sq mi)
GDP (PPP)	2022 estimate
• Total	$1,975.45 billion
• Per capita	$107,013
GDP (nominal)	2022 estimate
• Total	$1,347.50 billion
• Per capita	$72,995
Gini (2022)	33.7 medium
HDI (2022)	0.903 very high
Currency	Emirati Dinar (ED)
Time zone	UTC+4 (GST)
Date format	DD-MM-YYYY
Driving side	right
ISO 3166 code	FE
Internet TLD	.fea

The Federated Emirates of Arabia (Arabic: الإمارات العربية المتحدة), commonly known as the Federated Emirates, FEA or the Emirates, is a country located in the Arabian Peninsula, bordering Hashemite Arabia to the west, Yemen to the southwest, and having a maritime border with Hasa to the north by the Persian Gulf and with Iran to the east by the Arabian Sea.

It is a federation of 14 emirates and 3 federal governorates, with Abu Dhabi serving as the capital. Each of the 14 emirates is an absolute monarchy governed by an emir (sheikh) with membership in the Federal Supreme Council, the highest constitutional authority, which elects a President, a Vice President and a Prime Minister of the federation. In practice, the emir of Abu Dhabi is the President while the Vice President and Prime Minister are elected between the leaders of every emirate. It is considered to be an authoritarian state by the Democracy Index, sometimes being criticized by human rights groups.

The FEA is one of the wealthiest countries in the world, with a high-income economy centered around oil extraction and refining, natural gas, tourism, industry, banking and development projects. It is the richest country in the Arab world by per capita GDP, and has the largest and most diversified economy among Gulf Cooperation Council members. The FEA is the world's second-largest exporter of natural gas after Russia and the fourth largest oil exporter. The FEA has a total population of 20.30 million, out of which about half are Emiratis while the other half are foreign expatriates.

Over the years and with a full professionalized management of investments, the Emirates have been creating different sovereign wealth funds to channel strategic investments and diversify the economy. Currently (2022) FEA occupies the first position in the world in capitalization of its sovereign wealth funds with assets exceeding 2.5 trillion dollars, almost double its GDP. These sovereign wealth funds have allowed the country to take positions in some of the world's most important companies and markets and are actively used as a powerful tool in foreign policy and development of the country.

Considered a middle power and regional power, the Federated Emirates of Arabia is a member of the League of Nations, the Gulf Cooperation Council, the Organisation of Islamic Cooperation, the WTO, the IMF and the World Bank. For years, it has exercised a combination of soft power (investment and media) and hard power (military interventions) that has made it one of the most influential nations in the Middle East, extending its influence around the world.

History

Antiquity

Stone tools recovered reveal a settlement of people from Africa some 127,000 years ago and a stone tool used for butchering animals discovered on the Arabian coast suggests an even older habitation from 130,000 years ago. In time lively trading links developed with civilisations in Mesopotamia, Iran and the Harappan culture of the Indus Valley. This contact persisted and became wider, probably motivated by the trade in copper from the Hajar Mountains, which commenced around 3,000 BCE. Sumerian sources talk of the Magan civilisation, which has been identified as encompassing the modern eastern part of the country. Mesopotamian artifacts originating from the Ubaid period (c. 6500–3800 BC) have been discovered in abandoned coastal settlements along the Persian Gulf coast of the country.

There are six periods of human settlement with distinctive behaviours in the region before Islam, which include the Hafit period from 3,200 to 2,600 BCE, the Umm Al Nar culture from 2,600 to 2,000 BCE, and the Wadi Suq culture from 2,000 to 1,300 BCE. From 1,200 BCE to the advent of Islam in Eastern Arabia, through three distinctive Iron Ages and the Mleiha period, the area was variously occupied by the Achaemenids and other forces, and saw the construction of fortified settlements and extensive husbandry thanks to the development of the falaj irrigation system.

In ancient times, Al Hasa (today's part of Hasa and Hashemite Arabia) was part of Al Bahreyn and adjoined Greater Oman (today's FEA). From the second century CE, there was a movement of tribes from Al Bahreyn towards the lower Gulf, together with a migration among the Azdite Qahtani (or Yamani) and Quda'ah tribal groups from south-west Arabia towards central Oman.

During the classical period, different Greek historians have documented contacts with the northernmost parts of the country, especially the Emirate of Bharain which they referred to as Tylos. Nearchus is believed to have been the first of Alexander's commanders to visit the island, and he found a verdant land that was part of a wide trading network; he recorded: "That on the island of Tylos, situated in the Persian Gulf, are large plantations of cotton trees, from which are manufactured clothes called sindones, of strongly differing degrees of value, some being costly, others less expensive. The use of these is not confined to India, but extends to Arabia."

Between the years 200 AD and 400 AD there were massive migrations of tribes from central and northern Arabia to the coastal areas of today's FEA.

In 224 AD, the Sasanian Empire gained control over the territories surrounding the Persian Gulf. Emirates played a role in the commercial activity of the Sasanids, contributing at least three important commodities: precious pearls, purple dye and cooper. Under the Sasanid reign, many of the inhabitants in Eastern Arabia were introduced to Christianity following the eastward dispersal of the religion by Mesopotamian Christians. Monasteries were constructed and further settlements were founded during this era. By the fifth century, FEA had at least two bishops (Bahrain and Oman) being Etienne the last bishop of Oman in 676 CE.

Arrival of Islam

The spread of Islam to the eastern tip of the Arabian Peninsula is thought to have followed directly from a letter sent by the Islamic prophet, Muhammad, to the rulers of Oman in 630 CE. This led to a group of rulers travelling to Medina, converting to Islam and subsequently driving a successful uprising against the unpopular Sassanids, who dominated the coast at the time. Following the death of Muhammad, the new Islamic communities south of the Persian Gulf threatened to disintegrate, with insurrections against the Muslim leaders. Caliph Abu Bakr sent an army from the capital Medina which completed its reconquest of the territory (the Ridda Wars) with the Battle of Dibba in which 10,000 lives are thought to have been lost. This assured the integrity of the Caliphate and the unification of the Arabian Peninsula under the newly emerging Rashidun Caliphate.

In 637, Julfar (in the area of today's Ras Al Khaimah) was an important port that was used as a staging post for the Islamic invasion of the Sasanian Empire. The area of the Al Ain and Al Buraimi Oasis was known as Tu'am and was an important trading post for camel routes between the coast and the Arabian interior.

Portuguese era

Portuguese settlements and bases in the Persian and Oman Gulfs

The harsh desert environment led to the emergence of the "versatile tribesman", nomadic groups who subsisted due to a variety of economic activities, including animal husbandry, agriculture and hunting. The seasonal movements of these groups led not only to frequent clashes between groups but also to the establishment of seasonal and semi-seasonal settlements and centres especially in coastal areas where the pearl industry was an important source of income. A decade after Vasco da Gama's successful voyage around the Cape of Good Hope and to India in 1497–98, the Portuguese arrived in Oman and occupied Muscat for a 143-year period, from 1507 to 1650. In need of an outpost to protect their sea lanes, the Portuguese built up and fortified the city, where remnants of their Portuguese architectural style still exist. Later, several more coastal cities were colonized in the early 16th century by the Portuguese, to control the entrances of the Persian Gulf and trade in the region as part of a web of fortresses in the region, from Basra to Hormuz.

However, in 1552 an Ottoman fleet briefly captured the fort in Muscat, during their fight for control of the Persian Gulf and the Indian Ocean, but soon departed after destroying the surroundings of the fortress. Later in the 17th century, using its bases in Oman, Portugal engaged in the largest naval battle ever fought in the Persian Gulf. The Portuguese force fought against a combined armada of the Dutch East India Company and English East India Company supported by the Safavid empire. The result of the battle was a draw but it resulted in the loss of Portuguese influence in the Gulf Region especially the northernmost areas of the current FEA that came to depend on tribes coming from the interior and later into Ottoman hands.

Portuguese influence, although culturally lost in the following years, is still maintained today in the remains (some perfectly preserved) of the coastal fortresses that he built to control the region's trade routes.

Omani Empire

Omani Empire at its peak in 1856

In mid-17th century, the Omani tribes were able to end the Portuguese presence in Muscat and the surrounding areas. Ya'rubid Dynasty managed to construct a powerful and well-organized state after the Portuguese had disrupted Arabian maritime trade in the region. The Portuguese encroachment which had engulfed the area in an economic crisis was challenged by the Omanis, where the latter managed to restore their traditional role as local maritime traders. Along with this, significant economic and political developments took place and new alliances began to be established with other tribes north of Muscat, (Bani Yas and Al Qawasim) in areas that today belong to FEA. At that time, the northernmost areas of FEA (Bharain and Qatar) remained mostly occupied by the Ottoman Empire. Under Ahmad bin Said, the first sultan of the al-Busaidi dynasty after a short civil war, dominance over the areas of southeastern Arabia was consolidated and an expansion into the Persian Gulf began. Within a few years, the territories of the Al Qawasim and Bani Yas tribes were integrated.

In the following decades, the Sultanate of Oman extended its dominions northwards until it wrested Bharain and Qatar from the Ottomans, but above all they expanded on the east coast of Africa. Beginning with the Socotra archipelago, the Omanis occupied large coastal territories from the north of present-day Somalia to present-day Mozambique.

When Sultan Sa'id bin Sultan Al-Busaid died in 1856, the “Omani Empire” was at the peak of its expansion. Although British influence in the Sultanate was already considerable, under the Sultan's rule a vast territory stretched from Bahrain in the north to Yemen in the south of the Arabian Peninsula and including the Socotra Islands. On the other side of the Persian Gulf, the coastal territories of Hormozgan and large parts of Balochistan also belonged to the Sultanate of Oman. In addition, the Sultanate had extensive territories on the eastern coasts of Africa stretching from Somalia to Tanzania, grouping these territories around Zanzibar and extending into the Lake District.

After the death of the Sultan, his sons, influenced by the British who were wary of such a vast territory, disputed the inheritance. As a result of the dispute, the British forced the division of the Empire into two separate principalities: Sultanate of Zanzibar (with its African Great Lakes dependencies and African Coast), and the Sultanate of Muscat and Oman with the Arab and Persian territories including the Socotra Islands. Although the Sultanate of Zanzibar continued to pay tribute to the Sultanate of Muscat and Oman for years to come, the two sultanates would never again be unified.

British era

By the end of the 19th century, British influence in the Sultanate was already total. In 1871 the Sultanate of Muscat and Oman formally became a British protectorate. At that time the pressure on the region was very strong from the Ottoman and Persian Empires that had claims on some territories belonging to Oman. The British agreed with the Persian Empire to return the Hormozgan territories on condition that they gave up their claims to the Bahrain territory while integrating the omani Balochistan into the British Raj. On the other hand, maintaining the integrity of the Omani territories in Arabia was seen as fundamental by the British to counter Ottoman and Hashemite influence in the region so they sought to strengthen the unity of the remaining Omani territories.

Despite British efforts at unification, the socio-economic and religious reality of the British Protectorate of Oman had two clearly differentiated zones:

• The coastal tradition: mostly Sunni, more cosmopolitan, open and more secular. Found in coastal emirates from Bharain to Muscat.
• The interior tradition: insular, tribal, and highly religious under the ideological tenets of Ibadism ruled by an imam.

These two opposing realities led the protectorate into civil war when Imam Azzan bin Qais Al-Busaid succeeded in leading the Hinawi and Ghafiri tribes into rebellion along with other tribes in the interior of Oman in April 1872.

Imamate war and Treaty of Seb

During the first months of the war the fighting was reduced to small skirmishes, but from 1873 onwards and with the support of the Hashemites the rebel troops began to approach Muscat dangerously close. On September 13, 1873 a bloody battle took place outside Muttrah. Although the outcome of the battle was finally favorable to the Sultan's troops, Sultan Turki bin Said al Busaidi was fatally wounded and died a few days later. He was succeeded as sultan by his son Faisal bin Turki, but Faisal lacked his father's ascendancy over tribal leaders and emirs and was unable to unify forces against the rebels who managed to gain a foothold in the mountainous areas of the interior of the country. Faced with this situation, the British fearful of the possible dismemberment of the protectorate, organized a military expedition while negotiating support directly with the local emirs of the protectorate. One of these emirs was Zayed bin Khalifa Al Nahyan, known as Zayed the Great, who was Sheikh of Abu Dhabi from 1855 to his death in 1909. Zayed soon emerged as a leader respected by the other emirs and very well attuned to the British. These two factors made him the most important political and military figure in the protectorate to the detriment of the Sultan. Under Zayed's orders, an army made up of troops from several northern emirates crossed the Hajar Mountains and attacked the rebels from the north. Meanwhile, expeditionary troops sent by the British pushed from the east jointly with Muscat troops. The rebels were unable to resist the push and finally surrendered after the death of the Imam Azzan in 1876.

The Treaty of Seeb was an agreement supervised by the British and reached between the Sultanate of Oman and the Imamate of Oman on 25 September 1876. The treaty granted some grade of autonomy to the imamate in the interior of Oman but recognized the sovereignty of the Sultanate of Oman. The treaty was named after Seeb (as-Sib), a coastal town. This treaty meant the pacification of the British protectorate of Oman for the following decades, although it meant the de facto end of the power of the Sultan of Oman, weakened by the growing autonomy of all the emirates.

The 20th century: industrialization and the discovery of oil

Information panel of the place where the country's first oil well was drilled in 1932

When Sultan Faisal bin Turki died in 1901, his power was completely confined to the territories of Muscat. Although he remains formally the local leader of the British protectorate of Oman, the reality is that each of the different emirates is now directly dependent on the British governor. His heir Taimur bin Feisal, aged 15 at the death of his father, was appointed Emir of Muscat but no longer Sultan of Oman. While the inland regions remained more or less the same, the coastal emirates underwent a major transformation from north to south. From Bahrain to Muscat, the emirates that had prospered through the pearl trade and industry began to be a stop on British trade routes with the East, allowing for the arrival of the first industries and a small technological revolution during the first decades of the 20th century. This industrialization, especially linked to the textile and food industries, served to alleviate the decline of the pearl industry, which was seriously affected by the arrival of cultured pearls in the 1920s.

The Bahrain Petroleum Company (BAPCO), then a subsidiary of the Standard Oil Company of California (Socal), discovered oil in the Emirate of Bahrain in 1932 just a few days after the Great War broke out. The outbreak of war delayed the start of production operations, but in January 1933 the first barrels of oil were sent to Britain to contribute to the war effort.

British Protectorate of Oman during the Great War

Main article: Protectorate of Oman during the Great War

As a British protectorate at the outbreak of the Great War, the Protectorate of Oman sided with the British although it did not formally declare war on any power directly. From the first months of the conflict, the ports of the different emirates of the protectorate were used on the British military routes that linked the metropolis with the Asian colonies, especially with India. In addition, the recent discoveries of oil in the Emirate of Bahrain served to contribute to the war effort, since as early as 1934 the first wells were already in full production.

Early on 19 February 1934, four Otoman bombers attacked British-operated oil refineries in the Emirate of Bahrain and Dhahran in Hasa. Although minimal damage was caused in both locations, the attack forced the British to upgrade Bahrain's defences. This war action prompted the Protectorate of Oman to formally declare war on the Ottoman Empire.

Although the situation in the protectorate did not change much after the formal declaration of war, it led to the creation of several battalions of tribal militias supervised by British officers for the protection of particularly sensitive areas such as oil installations, ports and airstrips. Some of those tribal battalions were grouped into the Oman Scout Regiment which took an active part in several British campaigns in northern Arabia, Palestine and Syria.

Hydrocarbon exploration, albeit at a slower pace, continued during the war and in June 1935 the Anglo-Persian Oil Company began oil production in the Emirate of Qatar.

Post war Oil Rush and steps for independence

Zayed bin Sultan Al Nahyan inaugurating an oil well

At the end of the war and after the successes in the explorations carried out in Bahrain and Qatar but also in neighbouring Hasa, interest in hydrocarbon exploration in the Arab Region grew exponentially. Numerous companies from various origins showed their interest which led to the signing of an agreement between the British government and the different emirates of the protectorate by which the British guaranteed their companies a majority of the shares in any future oil operation. In return, they would start paying royalties for the profits made. The agreement, signed in 1941, while clearly more beneficial to British interests, served to start the local communities in a process of development. By the mid-1940s, virtually all the emirates had oil exploration underway. Many of them, although unsuccessful in their main purpose, were used for the construction of water wells that contributed to the process of sedentarization and urban development.

Several wells came into production in Abu Dhabi between 1948 and 1953, also reaching production in Dubai, Sarjah and Ras al-Khaimah in the following years while offshore explorations began to take place in the waters of the Persian Gulf.

At the end of the 1940s, the British began to consider the independence of the Protectorate of Oman as part of the gradual wave of decolonization. However, in order to prevent tribal quarrels from leading to the instability of an area of special economic interest due to the potential oil wealth, the British tried to establish the necessary structures for a stable union. Negotiations were initiated between the 14 emirates under British supervision, while parallel negotiations were also taking place with the Imamate of Oman. (At first the British contemplated incorporating the territories of the Imamate into Aden.) Old quarrels between the emirates emerged during the negotiations, especially over the delimitation of borders, which came close to derailing the negotiations several times. But once again the figure of the Emir of Abu Dhabi, Zayed bin Sultan Al Nahyan, grandson of Zayed the Great, emerged as the leader capable of unifying the different emirs and tribal leaders and making the negotiations successful.

Finally in March 1953, the 14 emirates signed a federation agreement that would lay the foundations of the new state, which was accepted by the British. However, the new Federated Emirates of Arabia would remain under British rule until their full independence in December 1961. During the years between the creation of the federation and independence, work was carried out on the definitive delimitation of the borders with the assistance of British geographers and engineers. It was also at this time that the new federation began to create the necessary state structures for when independence finally came.

In the beginning of 1959, the Shah of Iran demanded sovereignty over Bahrain in a letter to the League of Nations, a move that prompted the British to undertake harsh measures including encouraging conflicts between Shia and Sunni Muslims to bring down the uprisings and limit the Iranian influence. The Foreign Office even went further by suggesting to rename the Persian Gulf to the "Arabian Gulf" and finally the Iranians abandoned their claims to the emirate. However, during July 1959 the Iranians seized control of the Tunb Islands from Sharjah in a military operation in which the British decided not to intervene. These events further encouraged the emirates to reach a definitive federation agreement as the only way to resist the pressures of their powerful neighbours while retaining their own personality.

Jebel Akhdar War

Main article: Jebel Akhdar War

The Jebel Akhdar War, also known as Jebel Akhdar rebellion, broke out in 1954 and lasted until 1958 in the British Protectorate of Oman, as an effort by the local Omani tribes in the interior of Oman led by their elected Imam, Ghalib al-Hinai, to protect the Imamate of Oman from what they believed was the illegal exploitation of oil in their territories by British companies. A year earlier, the explorations had been successful in the Natih area and the British were working on the necessary infrastructure for the operation of the first wells. This was, at least, the official reason but behind the revolt was the influence of the Hashemites. Faced with the prospect that the British would abandon the Protectorate of Oman, the Hashemites had begun to influence the Imamate to attract them to their area of influence in the face of a hypothetical independence of the Imamate, but when they learned of the British plans to integrate the Imamate in Aden, they instigated the Imam to declare war and seek independence.

The British were already in the phase of abandoning Arabia and also had other sources of tension in different parts of the world, so they changed their initial approach to the Imamate and proposed to the newly created Federated Emirates of Arabia to deal with the resolution of the conflict in exchange for integrating the territories of the Imamate into the new state after independence.

During the years of conflict, low-intensity guerrilla warfare was maintained, although some notable clashes took place between the newly created Emirati Scout Regiments and rebellious tribes. The war ended in 1958 when the last rebel-held territories were incorporated into the federation as the Federal Governorates of Al Wusta and Dhofar.

Also in 1958, and in view of the instability that existed in the territories of Aden with the proliferation of communist militias, the British decided to hand over the Socotra archipelago to the Federation, which was also incorporated into the new state as the Federal Governorate of Socotra.

First years of independence

Federated Emirates of Arabia became an independent state on December 1, 1961 and was accepted as member of the League of Nations one month later. During the first years, the structures of the state and each emirate were strengthened. Also the urban infrastructures necessary to definitively settle the population that until then had been semi-nomadic, began to be developed. During the 1960s, oil projects multiplied, especially in the emirates of Bahrain, Qatar, Abu Dhabi and Ad Dahirah. Oil money flowed and was invested in the economic and social development of the country, but it was clear that most of the pie was in the hands of foreign companies. On the other hand, despite the unequal oil wealth among all the emirates, tensions were beginning to arise. In this context, the President promoted reforms to establish solidarity mechanisms between the different emirates in terms of oil revenues. Given that as Emir of Abu Dhabi, it was his own emirate that had the most to contribute, the rest of the emirates accepted reforms in this regard.

In September 1969, the Emirates denounced the oil agreements signed with the British as abusive and not in line with international law. The complaint was made to the League of Nations. Although at first it created a minor diplomatic crisis with the British government, finally under the auspices of the League of Nations the agreements were definitively broken by both sides. From that moment on, the exploitation of hydrocarbons was nationalized and it was established by law that public companies should have a majority in each of the exploitation and refining projects. Although private companies around the world continued to take part in the projects, the new law allowed oil revenues to multiply and boost the local economy.

The Dhofar Revolt

Main articles: Dhofar Revolt and Arab Cold War

Oil reserves in Dhofar were discovered in 1964 and extraction began in 1967. In this context the Dhofar Liberation Front, a communist-inspired guerrilla group that emerged in the heat of the Cold War and Arab Nationalism, began the armed struggle in search of the independence of the territories of Dhofar and Al Wusta to become a communist state. The rebels also held the broader goals of Arab Nationalism which included ending British influence in the Persian Gulf region. Emiratis and British goals, on the other hand, were to maintain territorial integrity of the FEA and halt the spread of communist ideology in the region as part of the broader Cold War.

A number of factors such as the lack of preparation and professionalism of the Emirati troops and support to the rebels from the newly independent South Yemen, Egypt and Syria brought the rebels increased success, with the communists controlling the entirety of the Dhofar region by the late 1960s. FEA government asked the British for help in resolving the crisis, sending them weapons, equipment and monitors to train the Emirati troops. The British initiated a "hearts and minds" campaign to counter the communist rebels and began the process of modernising the Emirati's Armed Forces while simultaneously deploying the Special Air Service to conduct anti-insurgency operations against the rebels. This approach led to a string of victories against the rebels and the war ended with the final defeat of the rebels in 1974 after decisive battle won by Emirati troops in the surroundings of Salalah.

The Dhofar War taught the Emirati government that its survival would depend on being able to maintain a fully equipped and trained armed forces, something that has since become a government priority.

To the new millennium

During the 1980s and 1990s, the country continued to grow and develop. Oil production was growing year by year, and in the mid-1980s huge deposits of natural gas were also discovered. Natural gas production greatly increased national income, as in the mid-1990s the country became the world's leading exporter of liquefied natural gas, (LNG). Also in the mid-1990s, the country began to develop industry to process oil instead of exporting it as crude oil. Refineries and petrochemical factories were built to export petroleum products that provided higher revenues while developing better exploitation and recovery techniques in the fields. During this time, the urban model began to be consolidated, which would become the image of the country abroad. Cities grew in surface area but also in height with the construction of the first skyscrapers at the same time that cities were provided with first-class services. The construction of the first desalination plants took place at this time. Although at the end of the 1990s the economy was still highly dependent on oil revenues, the foundations for diversification had already begun to be laid with the attraction of innovative projects and the creation of financial hubs. It was also in the 1980s that the different sovereign wealth funds of the state and individual emirates were launched. A key tool in attracting projects, development and international projection. The entry into the capital of important companies from all over the world thanks to sovereign wealth funds also allowed the country to access technological resources that would help the development of local industry in the following decades.

In the 1990s, the country also consolidated its diplomacy, creating an extensive network of embassies and consulates that helped its international projection. This, together with the economic power of its sovereign wealth funds, helped to promote the country as an attractive place for companies as well as highly qualified professionals. A very important part of the country's diplomacy and international influence was the birth of the media conglomerate Al Jazeera in 1995.

During this time, the Armed Forces were also consolidated. With the mistakes learned in the Dhofar Revolt, the armed forces were partly professionalized and resources were invested in the purchase of the means and equipment necessary to perform at the level of the most militarily advanced nations. Along with the purchases of military equipment from Britain and Sierra, joint training programs were established to improve the performance of officers and troops. This modernization of the Armed Forces would be decisive for the Emirates to be called "Little Sparta" in the years to come due to their active and effective military role and power projection compared to their relative size.

The Bharain Crisis

Main article: Bahrain's Shia crisis

In December 2000, a group of youths from a Shia affiliated organization threw stones at female runners for running bare-legged during an international marathon. The resulting clash with police soon grew into civil unrest that ended with the Islamic Front for the Liberation of Bahrain orchestrating a failed coup attempt under the alleged auspices of Iran, although the Iranian government always denied its involvement. The coup would have installed a Shia cleric exiled in Iran, Hujjatu l-Islām Hādī al-Mudarrisī, as supreme leader heading a theocratic government.The perpetrators were harshly punished, which served to further sour the climate among the Shia population. Later in may 2001 a popular uprising occurred between in which leftists, liberals and Islamists joined forces to destabilise the emirate. The event resulted in approximately forty deaths in clashes with Bahraini police and ended with federal intervention and the dispatch of troops to restore law and order.

Although the problem was apparently resolved by force, in the months that followed the federal government imposed reforms on Bahrain to meet some of the demands of the Shia population, especially those aimed at ensuring their equality. The crisis also led to the abdication of the Emir of Bahrain, Isa bin Salman Al Khalifa, in favour of his son and heir Hamad bin Isa Al Khalifa.

Burj Khalifa. The tallest human structure ever built.

First years of the 21st century

On November 2, 2004, Zayed bin Sultan Al Nahyan, the Father of the Nation, passed away at the age of 86. He was replaced as head of state by his son Khalifa bin Zayed Al Nahyan.

The first decade of the new millennium served to consolidate the Emirates as a regional power and boost its influence around the world. Participation in the invasion of Syria, as well as the subsequent presence among ISAF forces in the aftermath of Syrian Civil War, showed the nation as a major regional player. The investment power of Emirati sovereign wealth funds consolidated its control over leading companies around the world. The world of sports was also no stranger to investment fever and some of the most renowned sports clubs in Europe and North America were acquired by Emirati funds. By the time of the global financial crisis in 2008, the industrial and financial transformation of the state that had been underway to limit dependence on hydrocarbon revenues had managed to limit them to just over 50%. In 2009, the Burj Khalifa, since then the tallest building in the world, was inaugurated to reign among Dubai's skyscrapers as a sign of the nation's economic potential.

The 2008 crisis affected the national economy, but in the long run it became an opportunity to undertake reforms necessary to optimize and eliminate duplication between federal agencies and each emirate. Although some emirates initially saw it as a reduction in their autonomy, they soon assumed the competitive advantages it represented for the country in a complex and global environment. State-owned enterprises were also streamlined by merging many of them to improve their overall competitiveness. At the end of 2019, dependence on hydrocarbon revenues was only 26%, a milestone that was virtually unthinkable just 20 years earlier and made the Emirates the most dynamic and diversified economy in the Middle East.

For the past few years, the Emirates have tried to maintain their own line in international policy. Although they continue to maintain their traditional ties with Britain and Sierra, disagreements over the management of the intervention in Syria and the withdrawal of ISAF in 2014 have made the Emirati leadership rethink the role that the country wants to play in the region regardless of the interests of the great powers. In addition, pragmatism in business has become a constant in the last decade and there are currently trade agreements with nations with which until recently there was no relationship. In addition to the leading role in the region, since 2010 the focus has begun on Africa, where it has been participating in projects for the development of large infrastructures. Using soft power (media and wealth funds), the FAE has become the most influential country in East Africa, closing priority economic agreements and permits to deploy the armed forces.

Geography

Main article: Geography of the FEA

The Federated Emirates of Arabia is located in the southeastern quarter of the Arabian Peninsula and covers a total land area of 409,263 km². The land area is composed of varying topographic features: valleys and desert account for 80 percent of the land mass; mountain ranges, 12 percent; and the coastal plain, 8 percent. The country is flanked by the Persian Gulf, the Gulf of Oman, the Arabian Sea, Yemen and Hashemite Arabia. It also share maritime borders with Hasa and Iran. The Federal Governorate of Socotra lies amidst the Guardafui Channel and the Somali Sea to the south.

Administrative divisions

The Federated Emirates of Arabia is made up of 14 constituent emirates and 3 federal governorates. The borders between the different emirates were the result of tough negotiations carried out before the country's independence under the supervision of British engineers and surveyors. Since independence, although with a few minor disputes, they have remained stable.

FEA Political Map

Flag	Emirate	Capital
	Abu Dhabi	Abu Dhabi
	Ad Dakhiliyah	Nizwa
	Ad Dhahirah	Ibri
	Ajman	Ajman
	Al Batinah	Sohar
	Al Buraimi	Al-Buraimi
	Bahrain	Manama
	Dubai	Dubai
	Fujairah	Fujairah
	Muscat	Muscat
	Qatar	Doha
	Ras al-Khaimah	Ras al-Khaimah
	Sharjah	Sharjah
	Um al-Quwain	Um al-Quwain
Flag	Federal Governorate	Capital
	Al Wusta	Haima
	Dhofar	Salalah
	Socotra	Hadibu

Economy

Main article: Economy of the FEA

Dubai's skyline with the Burj Khalifa in the background. Symbol of the economic power of the Emirates

The FEA has developed from a juxtaposition of Bedouin tribes to one of the world's wealthiest states in only about 50 years, boasting one of the highest GDP per capita figures in the world. Economic growth has been impressive and steady throughout the history of this young confederation of emirates with brief periods of recessions only, e.g. in the global financial and economic crisis years 2008–09. Between 2000 and 2018, average real gross domestic product (GDP) growth was at close to 5%. It is the largest economy in the GCC, with a nominal gross domestic product (GDP nominal) of $1.35 trillion. Since its full independence in 1961, the FEA's economy has grown by nearly 400 times. Supported by the world's fourth-largest oil reserves and second-largest gas reserves, and aided by prudent investments coupled with a resolute commitment to economic liberalism and strong governmental oversight, the FEA has witnessed its real GDP increase by more than four times over the past four decades. Presently, the FEA is among the wealthiest countries globally, with GDP per capita nearly 80% higher than the OECD average.

As impressive as economic growth has been in the FEA, the total population has increased from just around 1.7 million in 1975 to close to 18.5 million in 2022. This growth is due to policies implemented to encourage the increase in the birth rate over the last 5 decades, but also due to the influx of foreign workers into the country, making the national population a bit less than a half of the total population. The FEA features a unique labour market system, in which residence in the FAE is conditional on stringent visa rules. This system is a major advantage in terms of macroeconomic stability, as labour supply adjusts quickly to demand throughout economic business cycles. This allows the government to keep unemployment in the country on a very low level of less than 3%, and it also gives the government more leeway in terms of macroeconomic policies – where other governments often need to make trade-offs between fighting unemployment and fighting inflation.

During last years, the accommodation and food, education, information and communication, tech, arts and recreation, and real estate sectors over performed in terms of growth, whereas the construction, logistics, professional services, public, and oil and gas sectors underperformed.

The FEA government implemented value added tax (VAT) in the country from January 1, 2018 at a standard rate of 5%, which has helped to ensure the financial stability of public accounts and allows for further reductions in dependence on oil and gas. While the government may still adjust the exact arrangement of the VAT, it is not likely that any new taxes will be introduced in the foreseeable future. Additional taxes would destroy one of the FEA's main enticements for businesses to operate in the country and put a heavy burden on the economy.

See also:

• Central Bank of the Federated Emirates of Arabia
• Federal Budget of the FEA
• Emirati Dinar
• List of top Emirati companies

Emirati sovereign wealth funds

Since the formation of the country, and unlike other surrounding states, the Emirati leadership considered that the future of the country lay in the efficient management of oil revenues. Since the 1980s, various sovereign wealth funds have been created to channel investments in different sectors, both abroad and inside the country. By the end of the 2000s, there was a plethora of federal and emirate sovereign wealth funds that made management and competitiveness difficult. That is why, taking advantage of the financial reforms following the 2008 crisis, from 2010 to 2015 a process of consolidation and simplification of the structure of national sovereign wealth funds was carried out. The current structure has been simplified and most of the funds are managed at the federal level, with the percentage of participation of the emirates having been reduced. Of the more than $2,500 billions (almost double GDP) in total managed by FAE's sovereign wealth funds, more than 90% are federally managed in 2021.

At present, the funds can be grouped into four main groups:

• Financial Funds. This group includes funds aimed at achieving long-term returns and ensuring financial stability. They invest in international financial institutions, in public debt and, in general, with a moderate to conservative profile. The main fund of this group is Emirates Assets Management.
• Infrastructure Funds. The mission of the infrastructure funds is to provide funding for the development of infrastructure projects in the Emirates. In this group there are local funds and federal funds.
  • Emirates Infrastructure Fund, Emirates Development Fund, Dubai World, Qatar Future Investment and Abu Dhabi 2050
• Investment Funds. Funds called investment funds, group together sovereign wealth funds used to acquire ownership of companies and other key assets around the world. In addition to profitability criteria, they are also used as a tool for international promotion and to buy companies with key technologies for national development.
  • Mubadala Investment Company, Mumtalakat Holding Company and Emirates Green Fund
• Cooperation Funds. The purpose of the funds in this category is to finance international cooperation projects in countries or regions of special interest to the FEA. Traditionally, they have been used to increase influence and outreach in priority areas of action.
  • Emirati Arab Cooperation Fund and Emirati African Development Fund.
• Local Emirates Funds. As part of the restructuring, the three richest emirates retained sovereign wealth funds of their own.
  • Abu Dhabi Investment Authority, Qatar Investment Authority and Investment Corporation of Dubai.

Business and finance

The FEA offers businesses a strong enabling environment: stable political and macroeconomic conditions, a future-oriented government, good general infrastructure and ICT infrastructure. Moreover, the country has made continuous and convincing improvements to its regulatory environment and is ranked as the 26th best nation in the world for doing business by the Doing Business 2017 Report published by the World Bank Group. The FEA are in the top ranks of several global indices, such as the Doing Business Report published by the World Bank Group, the World Economic Forum's (WEF), Global Competitiveness Index (GCI), the World Happiness Report (WHR) and the Global Innovation Index. The Economist Intelligence Unit (EIU), for example, assigns the FEA rank one regionally in terms of business environment and 15 worldwide. From the 2018 Arab Youth Survey the FEA emerges as the top Arab country in areas such as living, safety and security, economic opportunities, and starting a business, and as an example for other states to emulate.

The weaker points remain some limitations in the financial and labour markets, barriers to trade and some regulations that hinder business dynamism. The major challenge for the country, though, remains continue translating investments and strong enabling conditions into innovation and creative outputs to continue to decrease dependence on oil and gas.

FEA law does not allow trade unions to exist. The right to collective bargaining and the right to strike are not recognised, and the Ministry of Labour has the power to force workers to go back to work. Migrant workers who participate in a strike can have their work permits cancelled and be deported. Consequently, there are very few anti-discrimination laws in relation to labour issues. This is a matter of controversy and has at times led to criticism from international public opinion. Emiratis – and other GCC Arabs – have preference in public sector jobs. In fact, just over fifty per cent of Emirati workers hold government posts, with many of the rest taking part in state-owned enterprises. Emiratisation is an initiative by the government of the FEA to employ more FEA Nationals in a meaningful and efficient manner in the public and private sectors. While the program has been in place for more than a decade and results can be seen in the public sector, the private sector is still lagging behind. However, as new generations of Emiratis become educated and enter the labour market, there is an increasing inclination towards entrepreneurship and private enterprise, especially in technological and innovative sectors.

To get it, investments in education have reached record levels with education now accounting for 17.5% of the overall federal budget planned for 2023. Multiple governmental initiatives are actively promoting Emiratisation by training anyone from high school dropouts to graduates in a multitude of skills needed for the – essentially Western – work environment of the FEA.

The investment and innovation ecosystem in the economy of the Emirates has turned many cities in the country into financial, technological and innovation centers not only in the Middle East but around the world. Some of the most important international exhibitions and fairs in the world take place at the FEA. A clear example can be found at the IDEX (International Defence Exhibition) event, which has become the most important military fair in the world.

Oil & Gas

Main article: Oil & Gas in FEA

The FEA is the world's second-largest exporter of natural gas after and the fourth largest oil exporter. FEA is the world leader in the production and marketing of liquefied natural gas. It also ranks fourth in terms of oil reserves and second in terms of gas reserves. Emirati leadership initiated economic diversification efforts even before the oil price crash in the 1980s, resulting in the FEA having the most diversified economy in the Middle East and North Africa (MENA) region at present. Although the oil and gas sector continues to be significant to the FEA economy, these efforts have yielded great resilience during periods of oil price fluctuations and economic turbulence. In 2022 the oil and gas sector contributed 24% to overall GDP and 32% of the total government revenue.

Although for many years the management of oil and gas policy was managed independently by each emirate, the federal reforms passed to optimize the economy after the 2008 financial crisis have given the federal government greater control. At the national level, the supreme body responsible for the petroleum sector is the Supreme Petroleum Council (SPC).

Electricity & water

Main articles: Electricity in FEA and Water management in FEA

Fujairah F1 Independent Water and Power Plant

The production, transmission and distribution of electricity and water in the FEA is considered by law a strategic activity and its management must be through public companies, companies with a majority of public capital, although potentially open to incorporating private partners in a model similar to that which has been carried out in oil and gas production. Until 2010, each emirate had its own independent company, but as a result of the reforms aimed at optimising public companies and bodies carried out after the 2008 crisis, there was a total restructuring of the electricity and water sector in the country. In the electricity sector, the generation, transmission and distribution businesses were separated. Transmission activity was detached from the utilities of each emirate and the Emirates National Grid was created to manage the transmission network at the federal level. The figure of independent production companies was created to promote the development of renewable energy generation projects, and finally a process of mergers between utilities (electricity, gas and water) was carried out to gain competitiveness and economies of scale. Currently, 6 companies are responsible for the distribution of electricity, gas and water throughout the country.

Per capita electricity consumption stands at 13,206 KWh per year. Although consumption has decreased in recent years due to energy saving and efficiency policies, it is well above the global average. The forecast is that although energy saving policies continue to be implemented, consumption will gradually increase due to the advance in electric mobility. Electricity production is currently 74% from gas combined cycles, 12% from nuclear, 3% from oil fired plants and 11% from renewable sources. The medium-term goal is to reduce dependence on natural gas by increasing nuclear power to 26% and renewables to 20%. Construction of the country's second nuclear power plant is currently underway as well as several new renewable projects.

With regard to water management, 100% of the population currently has access to safe drinking water and 88% to sanitation infrastructure. The increase in the need for water in recent years has led to the construction of numerous desalination plants, which in turn have increased electricity consumption. In recent years, mixed desalination and electricity production plants have been put into operation to better optimize consumption and improve efficiency. The country's total water consumption was 16302 MCM in 2021, with agriculture being the largest consumer with 56% of the total and desalination being the main source of water with 46% of the total. In recent years, large investments have been made in water treatment for reuse and it currently accounts for 18% of the total water consumed.

Agriculture & fishing

Since the first human communities began to settle seasonally in the Emirates, agriculture has been one of the most popular activities of the Emirati people. The key agricultural areas for farmers has been been Diqdaqah in Ras Al Khaimah, Falaj al Mualla in Umm al Quwain, the coastal area of Fujairah, Wadi adh Dhayd in Sharjah, Al Awir in Dubai, Al Ain and Liwa Oasis in Abu Dhabi, Al Batinah coast, the valleys and the high plateau of Ad Dhahirah and Ad Dakhiliyah, the interior oases of Al Wusta and Dhofar and along the narrow coastal strip of Dhofar. The cooler climate on the high plateau of the Al Jabal al Akhdar enables the growing of apricots, grapes, peaches, and walnuts. The only wine produced in the Arabian Peninsula comes from that area. The Al Batinah coastal plain accounts for about two fifths of the land area under cultivation and is the most concentrated farming area of the country. Annual rainfall along the coast is minimal, but moisture falling on the mountains percolates through permeable strata to the coastal strip, providing a source of underground water only about two meters below the surface. Diesel or electric motors are used to pump water for irrigation from these shallow wells.A freeze on new wells was imposed in addition to delimiting several "no drill zones" in areas where groundwater supplies are low. Recharge dams are designed to hold rainwater in the wadis for a period of time to facilitate the trickling of water down into the ground.

In the early 1990s, interior farming areas accounted for more than one-half of the country's cultivated land. Rainfall, although greater in the interior than along the coast, is insufficient for growing crops and most of the water for irrigation was obtained through the falaj system. Over the last few years, with the improvement of irrigation techniques, the obtaining of subterranean water, the reuse of treated water and, above all, desalination, the water available for agricultural use has grown considerably. Today, there are more than 48,000 farms surveyed in the FEA ranged from a few hundreds or square meters to several hectares, an exponential increase from around 4,000 farms in the early 1970s. The rapid development of agriculture in the FEA was seen during the 1980s, when the country started getting locally up to 30% of its food requirements. Both federal and emirate governments provide incentives to farmers. For example, the government offers a 50 percent subsidies on fertilizers, seeds, and pesticides and also provides loans for machinery and technical assistance. Federal government also operates experimental farms and agricultural research stations.

Although it has lost weight in total production, dates are still the main agricultural crop. The hot climate of the FEA actually favours the growth of dates, which is why they are in abundance in the region. The country produces more than 750,000 tons a year, making it the fourth largest producer in the world. In addition to dates, the major fruit crops are citrus and mangoes. Among the different crops grown in the FAE, there are also vegetables including tomatoes, cabbage, eggplant, cauliflower and squash. Grains such as barley, wheat, and corn along with forages such as alfalfa accounts for about 40% of the total agricultural production.

Front and centre in FEA’s agriculture strategy is food security, which is being tackled on multiple fronts by setting up new production facilities, expanding domestic agriculture, and building food storage and distribution infrastructure to facilitate imports. In the pursuit of food security, the government has invested heavily in developing organic and hydroponic agriculture. Currently, about 5 percent of the country's vegetable harvests already come from such farms. In terms of livestock, cows, goats, camels and poultry account for the majority of national livestock. Poultry farms provided 85 percent of local requirements for eggs and 70 percent of poultry meat needed. Local dairies produce 92 percent of domestic demand.

The government has supported traditional fishing in the rich waters off the FEA, an activity that has provided a livelihood for centuries along the coasts of Persian Gulf, Gulf of Oman and Arabian Sea offering a variety of catch, including sardines, bluefish, mackerel, shark, tuna, abalone, shrimp, lobsters and oysters. The government offers a 50 percent subsidy on fishing boats and equipment and has opened marine workshops that offer free repair and maintenance. Cooperatives assist fishermen in marketing their catch. FEA is a net exporter of fish, especially to nearby countries.

Mining

FEA has a history of copper mining dating back to 5000 years. The country is rich with a number of mineral ores, metallic such as copper, chromium, cobalt, iron, and Manganese, and non-metallic such as marble, limestone, gypsum, clay, silica, dolomite, sandstone, Kaolin, and other different crusher’s products. Also in smaller quantities of precious metals and stones. Nowadays, quarry mining develops actively due to the policy of appealing to direct investments. In recent years, in addition to industrial and ornamental rocks, important metal mines of copper, iron and other metals have been put into operation. The country applies the most advanced technologies and the best scientific methods in the mining industry and the infrastructure within the FEA is a haven for the mining industry with port facilities and land transport facilities functioning optimally.

The federal government's vision is for non-oil mining to reach 5% of GDP by 2030. Since 2012, the Emirates Mining Development Agency has coordinated all mining policies at the federal level and promotes the development of mining exploration and research projects. The agency has conducted geological and mineral surveys, produced geological maps, and built a geological and geophysical database. The first mineral survey was carried out in 1975, resulting in the preparation of various geological maps. From 2002 to 2006, modern geological maps were developed for mountainous regions and adjacent areas through detailed geological studies, including fieldwork, covering the remaining areas of the country. This phase produced over 47 geological maps, both paper and digital, and approximately 20 specialist reports covering various geological fields. Additionally, the agency established a geological and geophysical database representing the outcomes and outputs of its geological and geophysical surveys.

Industry

Main article: Industry in the FEA

Transport

Dubai International Airport

Main article: Transport in the FEA

With a fast-expanding population and substantial economic growth over the past decades, a reliable and extensive transportation network became increasingly necessary within FEA. So far the government (at the federal or emirate level), the primary transport developer, has done well in terms of keeping up with the demand for new transportation options. In 2004 was created the Emirati Public Works Authority (EPWA), as the federal body that oversees infrastructure development in order to streamline and modernise the country in preparation for major project expansions across all segments in the near future. EPWA works in tandem with every emirate's Transport Planning and Development Authority, and designed the transportation master plan, instituted in March 2006 and running to 2025. The Transport Planning and Development Authority of each emirate has responsibility for public works and transport considered local (inter-emirate roads, light railways and metros, non-international ports and airports as well as inland bus lines) while the Emirati Public Works Authority is responsible for the motorway network, railways and international ports and airports.

As driving is the primary mode of transport in the FEA, the road network is a major focus of the plan. However, in recent years rail transport has experienced a huge expansion not only with the construction of metros or light railways in the metropolitan areas of the largest cities, but also with the construction of the first inter-city railway lines and the planned international connections.

The country has several international airports, with Dubai International Airport being the most important as the busiest airport in the world by international passenger traffic in 2022. Other international airports with high passenger traffic include, Hamad International Airport in Doha, Muscat International Airport, Bahrain International Airport, Abu Dhabi International Airport and Sharjah International Airport. In recent years, the country's airports have become international hubs, accounting for the vast majority of air traffic between Europe and Asia.

Country is increasingly developing its logistics and ports in order to participate in trade between Europe and Asia or Africa. For this purpose, ports are being rapidly expanded and investments are being made in their technology.The Emirates have historically been and currently still are part of the Maritime Silk Road that runs from the Chinese coast to the south via the southern tip of India to Mombasa, from there through the Red Sea via the Suez Canal to the Mediterranean, there to the Upper Adriatic region and the northern Italian hub of Trieste with its rail connections to Central Europe, Eastern Europe and the North Sea.

Telecom

After independence, the first telecommunications services were for government buildings. Each emirate provided its own services, which later gave rise to public companies with a monopoly in each of the emirates. In 2001, the first federal telecommunications law was enacted and mergers between public companies were promoted. From this restructuring were born the two main integrated telecommunications companies in the country: Qtel and Etilsalat. In 2005, the telecommunications market was liberalized and private companies were allowed to enter. From the first wave of liberalization, after the reorganization of the market, there are currently only two companies left as integrated communications providers: VIVA, belonging to the Hashemite STC group, and du, with national capital. In the field of mobile telecommunications, several providers have appeared in recent years such as Vodafone, Zain and Ooredoo.

5G wireless services were installed nationwide in 2019 through a partnership with Huawei. According to 2021 data, there are more than 22 million mobile lines in the country, which means a penetration of 120%. On the other hand, 84% of households have a broadband internet connection.

Tourism

With the spectacular growth in the last decade, tourism acts as a growth sector for the entire FEA economy. FEA is the top tourism destination in the Middle East. According to the annual MasterCard Global Destination Cities Index, Dubai is the fifth most popular tourism destination in the world. The FEA has the most advanced and developed touristic infrastructure in the region. Since the 1980s, the FEA has been spending billions of dollars on touristic infrastructure. These developments are particularly evident in the larger emirates of Abu Dhabi, Dubai and Qatar, but the other emirates are rapidly following suit, providing major incentives for developers of residential and commercial property.

The nation is also on course to experience a major jump in athletic and corporate tourism with hosting world-class tournaments such as the and the awaited 2022 FIFA World Cup or the 2030 Asian Games. The country also hosts three Formula 1 grands prix each season. Powerful airlines as well as world-class airports, provide travelers with one of the best transportation services in the world, and this has increased tourism in FEA. FEA has one of the most diverse environments in the Middle East with various natural tourist attractions and is becoming particularly well known for adventure and cultural tourism. The archaeological legacy of five thousand years of civilisation is also a great tourist attraction.

Tourism employed more than 987,300 people as for 2021. It is expected to continue expanding, with the revenue increased to 12,4% of the country's GDP in 2030.

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  Resort at Banana Island, Qatar

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  Dubai Marina Beach

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  Dubai Archipelagoes

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  Al-Bustan Palace Hotel, Muscat

Culture and sports

Attribution notices
This page uses material from the Wikipedia page United Arab Emirates, which is released under the Creative Commons Attribution-ShareAlike 3.0 Unported License (view authors).