Dubai was originally a small fishing settlement, which in about 1830 was taken over by a branch of the Bani Yas tribe from the Liwa oasis to the south. The take over was led by the Maktoum family, who still rule the Emirate today. Traditional activities included herding sheep and goats, cultivating dates, fishing and pearling. The liberal attitudes of the rulers made Dubai attractive to traders from India and Persia. By the turn of the century, foreign traders began to settle in the growing town, which soon developed a reputation as the leading commercial market for the region.

Dubai and the other Emirates accepted the protection of Britain in 1892. In Europe, the area became known as the Trucial Coast, a name it retained until the departure of the British from the northern coast of the Arabian peninsula.

Oil was discovered offshore in 1966 by a consortium named Dubai Marine Areas (Duma) together with Dubai Petroleum Company (DPC) and production was commenced in late 1969.

In 1968, Britain announced its withdrawal from the region, and in 1971 the federation of the United Arab Emirates (UAE) was created. The new state was composed of the Emirates of Dubai, Abu Dhabi (the capital city), Ajman, Fujairah, Sharjah, Umm Al Quwain and, in 1972, Ras Al Khaimah.

The oil revenue allowed its rapid development that laid the foundations for today's modern society. Much of the credit for this development can be traced to the vision of the late Ruler, H.H. Sheikh Rashid bin Saeed Al Maktoum, who ensured that Dubai's oil revenues were deployed to maximum effect. His work has been continued by the present Ruler, H.H. Sheikh Maktoum bin Rashid Al Maktoum and his brothers, Their Highnesses Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance and Industry, and General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence.

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