Bloomberg: Dubai Surrenders Autonomy as Crisis Bolsters Oil-Rich Abu Dhabi
Until last month, a billboard at one of Dubai’s busiest roundabouts featured one photo, of Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum. The new billboard says “Long live our Emirates union” and also shows United Arab Emirates President Sheikh Khalifa Bin Zayed al Nayhan.
Sheikh Mohammed in February turned to Abu Dhabi, holder of the world’s sixth-largest crude reserves, for a $10 billion bailout. The central bank, which has its headquarters in the country’s capital of Abu Dhabi, bought the entire bond issue.
Dubai’s ruler is seeking an extra injection of $10 billion by the end of the year, Sheikh Ahmed bin Saeed Al-Maktoum, chairman of the emirate’s Supreme Fiscal Committee, said Nov. 16. The bond would get “majority government” participation, Mohammed Ali Alabbar, chairman of Emaar Properties PJSC and a member of the Dubai Executive Council, said Oct. 9.
“The whole strategy of diversification was a consequence of oil running out and wanting to keep their independence,” said Eckart Woertz, an economist at the Gulf Research Center in Dubai. “Now this diversification model is in dire straits and Abu Dhabi is the one that can help Dubai out.”