In the early stages of David Lean's Academy Award-winning 1962 epic "Lawrence of Arabia," Peter O'Toole as the larger-than-life T.E. Lawrence is lectured by General Allenby's cunning political consultant, Dryden, on what life is really like in the desert. "Lawrence, only two kinds of creatures get fun out of the desert— Bedouins and gods, and you're neither. Take it from me," he goes on to sermonize, "for ordinary men it's a burning, fiery furnace." But O'Toole, playing no ordinary man, is unperturbed by the harsh assessment and matter-of-factly retorts: "No, Dryden, it's going to be fun."

Perhaps he was on to something. In little more than 50 years, most of the tiny Gulf states that ribbon the northern coast of the Arabian Peninsula have morphed from a backwater of loosely organized trucial sheikhdoms, once nothing more than dhow-speckled pearling and fishing villages, to slick, tax-free hives for the mega-rich, anchored by the world's largest oil producer next door— itself undergoing something of a measured transformation.

Indeed, the frighteningly quick pace of change and development in the United Arab Emirates and Qatar, to say nothing of Bahrain, and to a lesser extent, Kuwait and Oman, from third-world insignificance into players on the international economic, tourism, aviation, sports and real estate stages, has been nothing short of miraculous.

Dubai, the pacesetter, is now a household name and destination, drawing six million travelers, with its world-class bounty of hotels and restaurants, world-beating golf courses, private residences built on artificial palm shaped islands, and a first-rate international airline—the head-spinning multi-billion dollar tourism innovations spearheaded by its ruler and de facto CEO, Sheik Mohammed bin Rashid al-Maktoum, notwithstanding. And this summer, the emirate became known for something even more remarkable: boasting the tallest free-standing structure on earth, when the jewel of its state-owned developer Emaar Properties, the Burj Dubai, surpassed Canada's Toronto-based CN Tower. All this after it became the highest skyscraper in the world in July, overtaking Taiwan's 1,667-foot Taipei 101, which had held that distinction since 2004.

Nearby Abu Dhabi, another of the UAE's seven semiautonomous emirates and its capital, is set to follow Dubai's centrifuge-like example. Its ruler, Sheikh Khalifa bin Zayed Al Nahyan, spearheaded the construction of the world's most expensive hotel, the part-Arabian Nights, part-Walt Disney, Emirates Palace, at a cost of over US$3 billion two years ago. But there is more. Development of its waterfront Corniche is moving apace,with buildings designed by boldfaced architects like Jean Nouvel and Frank Gehry, who has signed up to create the Guggenheim's newest outpost, on the horizon.

Down the coast, meanwhile, the island of Bahrain, which is now linked to Saudi Arabia by the monumental King Fahd Causeway that stretches 15.5 miles and is viewable from space, has marketed itself as a sporting destination, hosting the Bahrain Formula One Grand Prix, with a custom-made racetrack, among other international events, including sailing. For its part, Qatar, which had become synonymous as the forward U.S. base of operations for Operation Iraqi Liberation, has recast itself as a free economic zone with a luxe five-star airline. Most recently, Qatar has tried to up the ante in a regional race to establish a Persian Gulf and Middle East financial hub with a 30 percent part-purchase of the London Stock Exchange.

And the list goes on. So too does the influx of foreign investors—everyone from bearded Iranian entrepreneurs and newly-minted Russian oligarchs to dinner-jacketed Indian moguls, not to mention the throngs of visitors. (Think perma-bronzed British holidaymakers and perma-happy Scandinavians.) All are lured by a combination of R&R and investment opportunities, but arrive thoroughly uninformed about the nuances of the Arab World. They are consequently and summarily deposited into a cauldron of cultural unfamiliarity, governed by an alien code of customs that dictates everyday life in this decidedly un-Western and exceedingly religious part of the world.

In fact, according to many experts, obtaining one's cultural bearings is more involved in the Middle East than anywhere else. "The principle difference between doing business in Arabia and elsewhere is the extremely high value they put upon on who you are, and whether they trust you as a person first, and as the representative of a company they trust second," says David Solomons, chief executive of Culture Smart Consulting, a London-based firm which advises high net-worth individuals and Fortune 500 corporations on inter-cultural and diversity issues. "I think that's the central difference in the Arabian Peninsula and the Gulf states, principally because they've grown up in a completely family-oriented environment where family/tribe is central to their lives."

Indeed, historically, the Arabian Peninsula's handful of existing states were created out of tribal families, who, prior to the discovery of oil in the late 1960s, distributed the lands between them and relied on the income that was generated through the trade of much more basic types of goods. "They were just trading, traveling Bedouin tribes, and so their interest in knowing whether you were to be trusted was central to their lives, and that's something that's very much deep-seeded in their psyche," explains Solomons. "And despite how sophisticated they've become—and having been educated and trained overseas, they are thoroughly sophisticated—they still have this very basic instinct that they want to trust the people they want to do business with."

And haggle. According to Solomons, that sometimes uncomfortable practice for Westerners, be it hard bargaining in the souks of Tunisia or the medinas of Marrakech, is a common business custom that materializes full-on in the boardroom. "This is a culture that won't do business unless they can haggle and feel as though they've really got a good deal, so be prepared for a really thorough bartering session," he says, referring to their trading provenance.

But more Western-style business rituals are infiltrating the otherwise long-established traditions of the region. Golf or horse-racing, for example, are becoming an ever-more accepted backdrop on which to conduct and close-deals, according to Neil Payne, managing director of Kwintessential, a U.K.-based company that works with businesses and organizations on cross-cultural etiquette. "It is important to understand what these people may like, so if they are into golf or any sport for that matter, it may be worth hacking it around for a day or showing up at an event," he explains. "It is more about putting yourself in a context where both parties can be relaxed, and both parties can get to know each other as people—not just as business people."

Yet, the more liberal ethos and laissez-faire religious attitudes of the majority of the Gulf States stand in stark contrast to the severe philosophy and customs of Saudi Arabia, where the populace maintain a strict and unwavering adherence to the puritanical Wahhabi interpretation of Islam. Unlike its neighbors, whose bounty of oil is set to run out in a handful of decades, the custodian and keeper of Islam's most sacred cities and the world's largest oil reserves, isn't in any rush to create industries that can complement its energy sector. And unlike Dubai's ruler, who realized tourism was the way to keep his tiny emirate afloat, Saudi Arabia's King Abdullah bin Abdul Aziz al-Saud, whose country is awash in oil—and will be for the foreseeable future— doesn't see any need to open his doors to any large number of outsiders. This has, in small ways and large, kept most industries outside of defense, construction and energy—and visitors—at bay.

"Life, especially for foreigners living, working, visiting and doing business in Saudi Arabia, is far more strictly regulated and linked through the tenets of the religious establishment," says Solomons. He cites Shariah Law, which prohibits banks from charging interest—which is called "Riba" in Arabic—as an example of one of the many reasons financial institutions had, until recently, been sidelined from doing business in the country. Today, a handful of multinationals have tentatively waded into the waters, agreeing to work within the complex system.

But these commercial impracticalities dwarf the everyday complexities that foreigners working in Saudi Arabia must contend with. "Those doing business in Saudi Arabia will very quickly appreciate the difference in styles from, say, Kuwait, or Dubai," says Payne. "Interaction between genders is virtually nonexistent, meetings or conferences are halted by the adhan (call to prayer), and one should not be surprised if business meetings are opened with a brief supplication. Although on an individual level, Saudis are equally as hospitable as their neighbors, the hierarchical and bureaucratic nature of the country requires the Western visitor to perhaps exercise more patience than normal."

Despite these otherwise insular mores, Saudi Arabia shares a few key traits with its neighbors; namely how they like to close a deal. "The way most Arab or Gulf state businessmen like to do business is in a social environment," says Solomons. "They prefer that. And they use very basic approaches to the way they want to do business: they are not interested in the very sophisticated contracts and paperwork; those are the sorts of things that can be worked out by their lawyers. What they want is to meet the top people in the company, the president or the CEO, and not someone in middle management, because they ultimately just want to do a deal."

And, according to Solomons, who has been present for such transactions, this is an area where multinationals often make crucial and deal-breaking blunders. "I've come across companies that are very mystified by this practice, because in their culture, the middle management or the upper-middle management ratifies deals that are then signed off by the board. But in the Gulf states they are much more used to dealing with a high level of management. In one instance, a company wouldn't be able to do a deal unless they got their CEO into the room with someone from the main ruling families that were involved in this particular deal."

Beyond the boardroom, experts consult those who wish to conduct business in this part of the world to learn about the particular customs of each locale, keeping in mind that most Arab associates will be alcohol-abstaining, Ramadan-observing followers of Islam.

"Essentially, when doing business in the Arab world, people must be aware of what I call the "two pillars"—Islam and relationships," advises Payne. "If you underestimate the importance of both, you never truly get to grips with the people. Islam governs life in the region, even more so in traditional countries such as Saudi Arabia and Yemen. Appreciating simple dos and don'ts is always useful, but essentially what the Western mind has to grapple with is the Muslims' world view. As to relationships, Westerners tend to build relationships through doing business, whereas Arabs build business through relationships. If they don't feel they can trust you, and if they don't like you, getting anything done in the region is practically impossible."

And that's certainly no fun, as Mr. Dryden would surely agree—and revel in.