Thursday, 3 December 2009

Troubles play into Abu Dhabi's hands

Cars sit bumper to bumper along Abu Dhabi's clogged highways, decked out with the green, white, black and red flag of the United Arab Emirates. Young Emiratis toot their horns, lean out of their vehicles, wave yet more flags and cheer in celebration as fireworks explode in the background.

Their exuberant celebrations marked the UAE's national day yesterday - the 38th anniversary of the union that entwined seven emirates into one nation. But this year the festivities are occurring as the federal system faces unprecedented scrutiny and Dubai's debt travails have raised queries about its relationship with Abu Dhabi.

For many, the big question has been where is Abu Dhabi? Why has there been silence from the wealthy capital that many assumed would be on hand to support its neighbour? That was what many investors were banking on as they poured billions into Dubai. In the capital, however, observers say this miscalculation showed a lack of understanding of the federation, particularly the relationship between Abu Dhabi and Dubai, the most powerful and competitive of the emirates.

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