Friday, February 13, 2009

How the economic pressures could change the political dynamics

NYT:
Some analysts say the crisis is likely to have long-lasting effects on the seven-member emirates federation, where Dubai has long played rebellious younger brother to oil-rich and more conservative Abu Dhabi. Dubai officials, swallowing their pride, have made clear that they would be open to a bailout, but so far Abu Dhabi has offered assistance only to its own banks.

“Why is Abu Dhabi allowing its neighbor to have its international reputation trashed, when it could bail out Dubai’s banks and restore confidence?” said Christopher M. Davidson, who predicted the current crisis in “Dubai: The Vulnerability of Success,” a book published last year. “Perhaps the plan is to centralize the U.A.E.” under Abu Dhabi’s control, he mused, in a move that would sharply curtail Dubai’s independence and perhaps change its signature freewheeling style.

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1 Comments:

Blogger don_veto said...

Abu Dhabi has its assets invested in the Market spiralling downwards. It cannot sell them at a low to help out Dubai. It needs to find a balance of selling its assets with minimum loss and then helping Dubai.

5:13 PM  

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