During the 19th and early 20th centuries, the pearling industry thrived in the relatively calm sea, providing both income and employment to the people of the Persian Gulf. It began to become a good economic resource for the local people. Then the First World War had a severe impact on the pearl fishery, but it was the economic depression of the late 1920s and early 1930s, coupled with the Japanese invention of the cultured pearl, that all but destroyed it. The industry eventually faded away shortly after the Second World War, when the newly independent Government of India imposed heavy taxation on pearls imported from the Arab states of the Persian Gulf.
The decline of pearling resulted in a very difficult era, with little opportunity to build any infrastructure.
Beginning of the oil era
At the beginning of the 1960s, the first oil company teams carried out preliminary surveys and the first cargo of crude was exported from Abu Dhabi in 1962. As oil revenues increased, ruler of Abu Dhabi, Zayed bin Sultan Al Nahyan, undertook a massive construction program, building schools, housing, hospitals and roads. When Dubai’s oil exports commenced in 1969, Rashid bin Saeed Al Maktoum, the de facto ruler of Dubai, was also able to use oil revenues to improve the quality of life of his people.
In 1955, the United Kingdom sided with Abu Dhabi in the latter's dispute with Oman over the Buraimi Oasis, another territory to the south. A 1974 agreement between Abu Dhabi and Saudi Arabia would have settled the Abu Dhabi-Saudi border dispute; however, the agreement has yet to be ratified by the UAE government and is not recognized by the Saudi government. The border with Oman also remains officially unsettled, but the two governments agreed to delineate the border in May 1999.
Sheikh Zayed bin Sultan Al Nahyan and the union
In the early 1960s, oil was discovered in Abu Dhabi, an event that led to quick unification