Wednesday, December 02, 2009

dubai and abu dhabi

NYTimes | Dubai is seen as the brash, secular upstart of the seven emirates, and Abu Dhabi is known as the religious and conservative big brother. Tensions between the two are common, but when reporters questioned Sheik Mohammed of Dubai about problems last week, he told them to “shut up.”

Nevertheless, the debt crisis of the last few days has fed the speculation that Abu Dhabi would impose conditions for any bailout, including a stake in prominent Dubai enterprises like Emirates Airlines. Officials of the federation have rejected those rumors.

The United Arab Emirates’ central bank said in a statement Sunday that it would stand behind foreign and domestic banks operating in the emirates. It did not mention Dubai World, which is $59 billion in debt.

Analysts said the statement would not be enough to allay fears that the Dubai government could default on part of its sovereign debt.

Still, as fear from Dubai’s debt crisis circled the globe, an unaccustomed quiet settled here at the center of the storm.

Foreign bankers and other professionals here are simmering in anxiety as the world talks about Dubai like a bad seed of the global economy.

“A lot of people are pretty freaked out,” said one American businessman with long experience in the region, who spoke on condition he not be identified for fear of repercussions. “They’re all watching CNN and going: ‘Is Dubai going to default?’ ”

Many in Dubai have a different perspective.

“Dubai is a victim of media distortion,” wrote one reader to a Web forum of one of the emirates’ most popular newspapers. “All the Western countries have ganged up on Dubai. Why? Because it has succeeded.”

Another reader wrote, “This is all because of jealousy from the Western world,” adding that “Dubai has been at the forefront of development in the Arab world.”

Many Dubai citizens seem inclined to dismiss all talk of tension among the emirates, saying that they are not worried about their country’s future.

“Only a few decades ago, this country was nothing, just a desert,” said Thani al-Falaasi, a 31-year-old Emirati businessman who was shopping Sunday with a friend in the Dubai Mall. Referring to Dubai’s leader, Sheik Mohammed, he said: “He built it up. Even if there is a crisis, he can solve it. We have great confidence in him.”