Dubai looks to oil-rich neighbor for possible aid

[Joanne98]

Source: AP

DUBAI, United Arab Emirates — As world markets absorbed the shock of Dubai's debt crisis, the ruler of the once-booming city-state left town for an important meeting in a desert palace. His hosts: the leaders of neighboring Abu Dhabi whose balance sheets are flush with oil revenue.

It's not known what promises were made inside the halls in Al Ain during the parade of visitors for an important Islamic feast day on Friday. But their new relationship is clear. Abu Dhabi has the cash and cachet 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.

The direction Abu Dhabi takes will likely set the tone for the coming week as analysts try to sort out what banks and institutions have the most at stake in the money crunch — which has suddenly shifted Dubai's image from a desert dream factory of indoor ski slopes and a "seven-star" hotel to a reckless spender sideswiped by the recession and unable to pay its bills.

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 "shut up."

"Depleting market confidence in Dubai carries serious risks for Abu Dhabi," said Hani Sabra of Eurasia Group, a U.S.-based research firm that assesses political risk for foreign investors in Dubai and the Gulf.

"Differences between the two city-states remain on how to approach the economy and the financial crisis," Sabra added. "But now Abu Dhabi is obviously the more dominant emirate."

Dubai's empty pockets — mostly drained by collapsing real estate prices and overambitious development plans — touched off panic selling across world markets on fears that the reckoning from the global recession is not over.


Read more: http://www.google.com/hostednews/ap/article/ALeqM5jgIwsGJtixo-F6a2j5e8hebIbaEwD9C8SL780

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You know this Dubai collapse may be renewing my faith in GAWD!

[anonymous171]

1. Gommorrah part duex. nt

[dugaresa]

2. someone please explain to me why Dubai spent so much money on resort like expenditures?

is it that popular a destination in the middle east?

what gives?

I just don't get it.

[JI7]

4. because they don't have oil wealth so they wanted their wealth from tourism which is fine

they could have done it without all that man made islands and other crap that most of the world could not even afford.

there is probably some ego thing with the sheik also.

[cowcommander]

8. Wasteful stupidity

Didn't even get more than 20% completed.

[MUAD_DIB]

10. Global warming would flood that in short time. Idiots...

[Ter]

3. Dubai needs nothing

If ever there was a fantasy, fairy tail rich nation this is it. Poor to them is having a million dollars.

[Deja Q]

5. Well, do unto others - if they imprison their own for having debt...

:evilgrin:

In seriousness, a society is judged on how it treats its poor.

[Aramchek]

6. good thing we didn't allow these clowns to take over our ports

[dipsydoodle]

7. Abu Dhabi said

they would provide limited selective aid.

There is no love lost between the two Emirates. Abu Dhabi held the role of head of the Emirates but Dhubai has seeken to adopt that role. Broadly speaking I'd guess that Abu Dhabi's attitude is that Dubai can go fuck themselves.

[HughMoran]

9. So a "theme park" loses money and 1) markets crash and 2) they think they deserve support?

OK, the world has officially gone insane.

Here's my support - let's use Dubai as a testing ground for the MOAB (mother of all bombs).

[Selatius]

11. They should go to the IMF for help. I mean, they fucking helped Argentina slam into the ground.

Dubai needs good help of THAT kind.