History

Although little is known about the ancient history of this area, archaeological finds suggest that humans have been living here since at least 3000 BC. Other evidence links the peoples of what are now the United Arab Emirates (UAE) and Oman to the mysterious Bronze Age Magan civilization. Magan ships sailed to Babylonia, Mesopotamia and beyond, trading copper from Oman and pearls from the mouth of Dubai Creek with the heavyweights of the Bronze Age economy. The Magan civilization waned around 2000 BC, but Dubai's instinct for trade remained.

Excavations at Jumeira, about 10km south of Dubai, recently unearthed a 6th-century AD caravan station, proving that the area's population was still keeping the trade routes well oiled. Around this same time, the Sassanids, a Persian dynasty who had inhabited the mouth of Dubai Creek since 224 AD, were driven out by the Umayyads, who came to stay and brought Islam with them.

Exploiting their prime location between the Mediterranean Sea and Indian Ocean, the new inhabitants, working with the old, began reestablishing old trade routes and spreading the word of Allah, all the while making folks fantastic deals for the lowest everyday prices in the Gulf. As trade began to match pearl diving's importance to the local economy, merchant dhows (ships) sailed as far as China, returning with silk and porcelain for Middle Eastern and European markets. This maritime madness reached its peak between 750 and 1258 AD.

Soon everyone wanted a piece of the Gulf's action. By the late 16th century the Portuguese were attempting to control local trade. Their success was limited, and they retreated when faced with French, Dutch and British attempts to take over the ancient trade routes. The British finally gained control of the region's waterways in 1766. Dubai was caught between local power struggles and the Europe's imperial dreams, but somehow turned this bad situation to its advantage, expanding its pearl trade through every channel.

In 1833 a neighboring tribal power, the Bani Yas of what's now Saudi Arabia, decided that Dubai would be its new turf. Eight hundred Bani Yas moved into the Bur Dubai area under the leadership of Maktoum bin Butti, founder of the Al-Maktoum dynasty that still rules the emirate today.

The region's two economic epicenters, neighboring Sharjah and Lingah in modern-day Iran, were already losing business to bustling Dubai. Shaikh Maktoum decided to capitalize on the opportunity. In 1892 he signed an exclusive business deal with the British and in 1894 permitted a full tax exemption for foreign traders. Persian merchants were the first group of expats to take advantage of the deal, but traders the world over were on the way. In 1903, when the Shaikh convinced a major British steamship line to make Dubai a port of call, a 25-year boom began.

The Great Depression, compounded by the emergence of artificial pearls in 1929, cast a dark cloud over Dubai's newfound prosperity. Young Shaikh Rashid bin Saeed al-Maktoum, convinced that the pearl trade was dead, decided that this cloud had a 24-karat gold lining. Dubai wasn't duty-free for nothing. Soon, the barely legal re-export business (other nations might have refered to it 'smuggling'), whereby goods were cheaply imported into a duty-free port and immediately exported to another market, exploded. After Dubai Creek was dredged in 1963, allowing almost any boat safe harbor, the gold smuggling and re-exporting business took off like a rocket.

Dubai's lucky streak had only just begun. In 1966, oil was discovered and the economy kicked into overdrive. The British had already decided to pack up the empire and head home, and in 1971, Dubai became the seventh emirate of the newly formed UAE. Shaikh Rashid agreed to a formula that gave the emirates of Abu Dhabi and Dubai the most weight in the federation, and made sure that Dubai would continue living life in the fast lane. Border disputes and friction about the integration of the Emirates led to some tension, but in 1979, Shaikh Rashid and Shaikh Zayed of Abu Dhabi sealed a compromise; in effect, Dubai would remain a bastion of free trade while Abu Dhabi imposed a tighter federal structure on the rest of the Emirates.

When Shaikh Rashid, the architect of Dubai's success and unrivaled financial freedom, passed away in 1990, his son Shaikh Maktoum took the reins of power (but let Adam Smith's invisible hand continue to do most of the steering). The core of Maktoum's policies is economic freedom and the no-holds-barred promotion of Dubai, which makes the city a very fun place. By the mid-1990s, the Dubai Desert Classic had become a well-established stop on the Professional Golfers Association (PGA) tour. World-class tennis tournaments, boat and horse races, desert rallies and one of the largest air shows in the world attract millions of visitors to the city. Other high profile events, such as the Dubai Shopping Festival and Dubai Summer Surprises, bring hordes of tourists into town. Tourism matches trade and oil in importance to the emirate's economy.

The story of Dubai reads like rags to riches tale, and indeed, it is hard to imagine anywhere else in the world that has developed at such a pace, in such a short time, for so many different people.