The UAE is a Federation established in 1971 between seven Emirates namely  Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaima, Sharjah and Umm Al Quwain in the area previously known as the Trucial Coast in the Gulf which were, until W.W.I, under Ottoman rule and becoming later British protectorates. The UAE is also a member of the GCC.

The UAE is one of the relatively larger countries in the Gulf with a land area of over 83,000 square Kilometres with a population of 2.6 million. During the comparatively short period since its foundation the UAE managed to create a stable country with a thriving economy based on free trade. The reputation of the Emirates as a free trade area was enhanced with rapidly developing free zones especially the Jebel Ali free zone in Dubai. Oil production which started in the early sixties mainly from fields in Abu Dhabi and to a lesser extent Dubai and Sharjah helped to maintain the development momentum. The average production in 1998 was 2.26 million bpd with over $10 billion in revenues. The UAE is also a member of OPEC.

The UAE similar to other countries in the Gulf adopts a free market economy with a thriving private sector. However, the State ownes or has majority shares in public utilities and important trades. Their privatisation programme was recently started with the privatisation of the water and electricity department (WED) in Abu Dhabi.