A Blog by the Editor of The Middle East Journal

Putting Middle Eastern Events in Cultural and Historical Context

Monday, February 23, 2009

Abu Dhabi Bailing Out Dubai?

Dubai has been struggling due to the international real estate bubble's bursting, and from the sound of this Wall Street Journal article, it's been thrown a line by its rival Abu Dhabi. (When the WSJ headline says that the "UAE" is bailing out Dubai, it effectively means Abu Dhabi.

Abu Dhabi has usually held the balance of power in the federation but Dubai has always managed to maintain its own autonomous policies (even its own defense forces) and has, of course, lately been the boom town of the Gulf. If Dubai becomes more beholden to its neighbor and rival for its economic survival, it will be interesting to see if there is a shift in the overall political relationships within the federation as well. I'll leave commentary on the bailout details to those who have been following the specifics of Dubai's problems, but thought I would note the political aspects of the rescue.

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