United Arab Emirates

strategic location along southern approaches to Strait of Hormuz, a transit point for crude oil; Abu Zaby (Abu Dhabi) and Dubayy (Dubai) together account for over 90% of UAE's area and two-thirds of the population

The Trucial States of the Persian Gulf coast granted the UK control of their defense and foreign affairs in 19th-century treaties. In 1971, six of these states -- Abu Dhabi, 'Ajman, Al Fujayrah, Ash Shariqah, Dubayy, and Umm al Qaywayn -- merged to form the United Arab Emirates (UAE). Ra's al Khaymah joined in 1972. The UAE's per-capita GDP is on par with those of leading West European nations. For more than three decades, oil and global finance drove the UAE's economy. In 2008-09, the confluence of falling oil prices, collapsing real estate prices, and the international banking crisis hit the UAE especially hard. The UAE did not experience the "Arab Spring" unrest seen elsewhere in the Middle East in 2010-11, partly because of the government's multi-year, $1.6-billion infrastructure investment plan for the poorer northern emirates, and its aggressive pursuit of advocates for political reform. The UAE in recent years has played a growing role in regional affairs. In addition to donating billions of dollars in economic aid to help stabilize Egypt, the UAE was one of the first countries to join the Defeat ISIS coalition, and to participate as a key partner in a Saudi-led military campaign in Yemen. In 2020, the UAE and Bahrain signed a peace agreement (the Abraham Accords) with Israel -- brokered by the US -- in Washington, D.C. The UAE and Bahrain thus became the third and fourth Middle Eastern countries, along with Egypt and Jordan, to recognize Israel.

federation of monarchies. Independence: 2 December 1971 (from the UK)

high-income, oil-driven Middle Eastern economy; fastest GDP growth of Gulf states; diversification through tourism, construction, and services; strong foreign direct investment orientation; continued government investment and business-friendly reforms