Your Email:

Your Name:

To:

Subject:

Message:
By Sumayyah Meehan December 28, 2009 It’s been a long and winding road - the mixed messages, hurt feelings and absolute betrayal on both sides. And no, I’m not talking about Tiger Woods. The financial showdown between Abu Dhabi and Dubai, the mini-sheikdom neighbors of the UAE, finally subsided when Abu Dhabi finally opened up its enormous wallet and showed a little love to the cash-strapped Dubai in the form of a $10 billion bailout. However, the sum is not even a drop in the $60 billion bucket that the Dubai-based investment conglomerate ‘Dubai World’ owes to it creditors. And let’s not forget about the $20 billion that the city of Dubai owes on its own. Regardless, the cold hard cash injection was enough to shake the beleaguered UAE stock market out of its doldrums and shoot it right back up into the financial stratosphere where it is most comfortable. The Abu Dhabi politicians were quick to pat each other on the backs when speaking to local and foreign media. The bailout serves up a golden opportunity to mend the bridges that were burnt in Abu Dhabi’s initial response, which was basically to ignore its neighbor whole-heartedly. It was also a chance to avoid a huge PR scandal that would inevitably make Dubai look like a loser instead of the superstar financial hub it has always been groomed to be. The pieces of the bailout pie are pretty scant as almost half the money is already earmarked to repay bonds issued by Nakheel Property, which is just one branch of the giant Dubai World investment tree. The rest of the money will be trickled down into the thirsty hands of everyone else that Dubai World owes a pound of flesh to. Now all that is left for Dubai officials is to restructure its debt so that it can crawl out from under the cloak of poor judgment and financial stupidity it has been under for the past few weeks. The Dubai government is already making promises to future investors that it won’t squander their money again and that it can be trusted with other people’s money. It remains to be seen if the bailout will only serve as a bandage to the blood-soaked financial wound that could permanently put Dubai in its grave. Unlike its oil-rich neighbor Abu Dhabi, Dubai doesn’t have stockpiles of bubbling black crude oil to pin its economy up on. Dubai relies heavily on tourism and financial investments, which have all but dried up since the news of its financial troubles hit the airwaves. Souce: MSNBC http://www.elanthemag.com/index.php/site/blog_detail/dubai_gets_a_big_fat_bailout-nid513559455/