ABSTRACT
This chapter deals with the geographical features of the Emirates, their economic activities and fiscal policies in the pre-oil period, and the evolution of the Sheikhdom political system, topics which illuminate some of the basic factors determining the way in which the oil revenue is allocated. The Emirates, apart from petroleum resources, hold very few natural resources. The natural resources that exist are mainly sea resources, non-metallic mineral resources and agricultural resources. The pearl industry was the leading activity upon which the whole economic life and even the settlement and social life of the Emirates used to depend. The people of the Emirates have a long history of seafaring and trade. Since the region was a coastal one with few natural resources, the population was forced to look to the sea to meet their essential needs. The chapter is concerned with the political evolution of the ‘sheikhdom system’ and its impact on the use of the public revenue.
