While world markets struggle to absorb the shock of Dubai's financial woes (Take a peak at my previous post for a recap), the hitherto ambitious leaders of the Emirate meet their counterparts of the neighbouring state whose balance sheet is flushed by revenues from oil aka AbuDhabi. Few are aware of what actually went inside the august halls in Al Ain on an important Islamic feast day on Friday. But their new relationship is clear. Abu Dhabi has the cash and cache to be Dubai's white knight -- in a Gulf version of a too-big-to-fail bailout or to help calm markets with promises to intervene if Dubai's fiscal mess deepens.
It seems like the decisions Abu Dhabi takes will likely determine the fate the one dreamland-in-the-desert state.Thus it seems mocking that just this month, Dubai's ruler, Sheik Mohammed bin Rashid Al-Maktoum, assured international investors that all was well with Dubai's finances and told media critics to literally "shut up."(Too bad the Maktoum was too angry to put up a show of courtesy)
However,it would be wrong to classify Abu Dhabi's intervention as pure filial sympathy.The intervention might be symbiotic: a stronger Dubai is necessary for a thriving Abu Dhabi.Thus, Abu Dhabi is also moved by its own economic well-being to help Dubai.
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