Dubai is an emirate in the United Arab Emirates (UAE). A city within the emirate is also named Dubai. The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi. Dubai and Abu Dhabi are the only two emirates to have veto power over critical matters of national importance in the country’s legislature. Dubai City is located on the emirate’s northern coastline.
In 1966, the year oil was discovered, Dubai and the emirate of Qatar set up a new monetary unit to replace the Gulf Rupee. The oil economy led to a massive influx of foreign workers, quickly expanding the city by 300% and bringing in international oil interests. The modern emirate of Dubai was created after the UK left the area in 1971. At this time Dubai, together with Abu Dhabi and four other emirates, formed the United Arab Emirates. The following year Ras al Khaimah joined the federation while Qatar and Bahrain chose to remain independent nations. In 1973, the monetary union with Qatar was dissolved and the UAE Dirham introduced throughout the UAE. A free trade zone was built around the Jebel Ali port in 1979, allowing foreign companies unrestricted import of labor and export capital. The Gulf War of 1990 had a negative financial effect on the city, as depositors withdrew their money and traders withdrew their trade, but subsequently the city recovered in a changing political climate and thrived.