For centuries, the main sources of wealth were pearling, fishing, and trade. At one time, Qataris owned nearly one-third of the Persian Gulf fishing fleet. With the Great Depression and the introduction of Japan's cultured-pearl industry, pearling in Qatar declined drastically.

The Qataris are mainly Sunni "Wahhabi" Muslims. Islam is the official religion, and Islamic jurisprudence is the basis of Qatar's legal system. Arabic is the official language, and English is the lingua franca. Education is compulsory and free for all Arab residents 6-16 years old. Qatar has an increasingly high literacy rate.

When the Turks left, at the beginning of World War I, the British recognized Sheikh Abdullah bin Jassim Al Thani as Ruler. The Al Thani family had lived in Qatar for 200 years. The 1916 treaty between the United Kingdom and Sheikh Abdullah was similar to those entered into by the British with other Gulf principalities. Under it, the Ruler agreed not to dispose of any of his territory except to the U.K. and not to enter into relationships with any other foreign government without British consent. In return, the British promised to protect Qatar from all aggression by sea and to lend their good offices in case of a land attack. A 1934 treaty granted more extensive British protection.

In 1935, a 75-year oil concession was granted to Qatar Petroleum Company, a subsidiary of the Iraq Petroleum Company, which was owned by Anglo-Dutch, French, and U.S. interests. High-quality oil was discovered in 1940 at Dukhan, on the western side of the Qatari Peninsula. Exploitation was delayed by World War II, and oil exports did not begin until 1949.

During the 1950s and 1960s gradually increasing oil reserves brought prosperity, rapid immigration, substantial social progress, and the beginnings of Qatar's modern history. When the U.K. announced a policy in 1968 (reaffirmed in March 1971) of ending the treaty relationships with the Gulf sheikdoms, Qatar joined the other eight states then under British protection (the seven trucial sheikdoms--the present United Arab Emirates--and Bahrain) in a plan to form a union of Arab emirates. By mid-1971, however, the nine still had not agreed on terms of union, and the termination date (end of 1971) of the British treaty relationship was approaching. Accordingly, Qatar sought independence as a separate entity and became the fully independent State of Qatar on September 3, 1971.

In February 1972, the Deputy Ruler and Prime Minister, Sheikh Khalifa bin Hamad, deposed his cousin, Emir Ahmad, and assumed power. This move was supported by the key members of Al Thani and took place without violence or signs of political unrest.

On June 27, 1995, the Deputy Ruler, Sheikh Hamad bin Khalifa, deposed his father Emir Khalifa in a bloodless coup. Emir Hamad and his father reconciled in 1996. Since then, the Emir has announced his intention for Qatar to move toward democracy and has permitted a free and open press and municipal elections as a precursor to parliamentary elections expected to occur in 2003 or 2004.