The states that comprise the UAE were formerly known as the Trucial States, Trucial Coast, or Trucial Oman. The term trucial refers to the fact that the sheikhs ruling the seven constituent states were bound by truces concluded with Great Britain in 1820 and by an agreement made in 1892 accepting British protection. Before British intervention, the area was notorious for its pirates and was called the Pirate Coast. After World War II the British granted internal autonomy to the sheikhdoms. Discussion of federation began in 1968 when Britain announced its intended withdrawal from the Persian Gulf area by 1971.
Originally Bahrain and Qatar were to be part of the federation, but after three years of negotiations they chose to be independent. Ras al-Khaimah at first opted for independence but reversed its decision in 1972. After the 1973 rise in oil prices, the UAE was transformed from an impoverished region with many nomads to a sophisticated state with one of the highest per capita incomes in the world and a broad social welfare system. In 1981 the UAE joined the Gulf Cooperation Council (GCC).
The fall of the shah of Iran in 1979, the growth of Islamic fundamentalism, and the Iran-Iraq War threatened the stability of the UAE in the 1980s. In 1990, Iraq accused the UAE and Kuwait of overproduction of oil. The UAE participated with international coalition forces against Iraq during the Persian Gulf War (1991). Since the Gulf War the UAE has expanded its international contacts and diplomatic relations. A dispute erupted with Saudi Arabia in 1999 over relations with Iran, a traditional enemy; while Saudi Arabia appeared willing to seek improved ties, the emirates still regarded Iran as a foe.
Sheikh Zaid ibn Sultan al-Nahayan, the ruler of Abu Dhabi, was president of the UAE from the founding of the federation until his death in 2004, when his son and heir, Sheikh Khalifa ibn Zaid Al Nahayan, was elected to succeeded him. The financial crisis that resulted in Dubai in 2009, as the speculative bubble there collapsed and the government-owned Dubai World conglomerate struggled with huge debts, affected all the sheikhdoms to some degree and shook the banking system, and Dubai was forced to seek significant financial aid from Abu Dhabi.
In 2011 Emirati forces aided Bahrain in suppressing prodemocracy demonstrations. The UAE itself did not experience Arab Spring protests, but in 2013 more that 60 people were convicted of plotting the government's overthrow. An Islamist group that has called for political reforms and engaged in social service work was said to be behind the plot.