06 December, 2009

What is Abu Dhabi's thinking?

He's back.

The man with his own UAE community blog category has added his voice to the speculation about what the Dubai default ways about relations between Abu Dhabi and Dubai:
The answer to this conundrum lies in both the past and the present, as an age-old rivalry has resurfaced that sees Dubai unwilling to part with its autonomy and come to the table. Dubai, after it broke away from the sheikhdom of Abu Dhabi in 1833, survived repeated attempts at reintegration only because of its peace treaties with Britain. Even in the 1940s, with Britain fully engaged in the second world war and less able to give attention to the region, there was an armed conflict between the two sheikhdoms. In 1979, just eight years after the UAE was formed, a constitutional crisis threatened to break the UAE apart, with Dubai resentful of increasing Abu Dhabi-led centralisation. It is remarkable that Dubai agreed to merge its armed forces - the Dubai Defence Force - into the federal military only in 1996.

In the light of this history of some tension, Abu Dhabi has taken an unexpectedly shrewd stance on the financial disaster. Its thinking appears to be that Dubai’s bad debts really are bad, and could well end up becoming black holes. Moreover, if Abu Dhabi gets involved now, then the lawsuits that will almost certainly be coming Dubai’s way may land on the desks of the federal government or even those of Abu Dhabi.

There is a deeper point. Sheikh Mohammed, his crown prince, and his top lieutenants are now all exposed as having long circumvented the truth; as a result, the ruling family has suffered a massive loss of legitimacy, both internationally and in the eyes of Dubai’s business elite and citizenry. Yet at the time of writing there have been no signs of humility; on the contrary, the ruler stated on 1 December that investors “do not understand anything”.
Read it all.

Christopher Davidson has not always been popular with either ruling family, but he's a favorite of the reporter looking for a quote.

14 comments:

Anonymous said...

Why discuss at all, when everything can be solved by claiming "Critics of Dubai are just jealous of its success"?

Niblick said...

anon 9.19 - lol

Interesting. Rivalry between AD and Dubai, or between Dubai and Sharjah is not really news. These factoids add to the picture.

But, it is very annoying to have to check each fact because the writer, with all this research, at his disposal is known to be liberal with facts - getting some wrong and using others selectively to prove his point (which IS very anti). There is a clever mix of historical facts with only SPECULATION on today's situation.

Here is one such check from globalsecurity.org:
"A major step toward unification of forces occurred in 1976 when Abu Dhabi, Dubai, and Ras al Khaymah announced the merger of their separate armed forces with the UDF. Sharjah had previously merged its police and small military units into the UDF. In 1997, Dubai disbanded its armed forces and integrated them into the federal General Headquarters, which are based in Abu Dhabi"

So the merger had happened earlier. In 1997, they were disbanded. Davidson himself says in a BBC article: "But this move [disbanding] was interpreted at the time as a means of transferring costly services to the federal government so as to allow Dubai to pursue its economic ambitions."

One seeks balance in reporting and it does not make for faith in a writer of an opinion piece if that is missing. What if we add this fact to the mix - Dubai and Abu Dhabi are the only two emirates to possess veto power over critical matters of national importance in the country's legislature.

And the fact that while the armies are located in Abu Dhabi, with the Crown Prince as the supreme commander, the minister of Defence is Dubai's Sheikh Mohammed.

I am not from Dubai or love it particularly but Davidson makes Dubai seem some resentful little kingdom with an attitude towards its superior, trying to maintain "an air of autonomy". While including the missing facts shows the distribution of responsibility indicating that its power is real and acknowledged as such. And secondly, the making of the federation was voluntary, it is not as if Abu Dhabi took over anything.

Alters the perception somewhat, doesn't it?

Anonymous said...

All I am interested in knowing is what deals were made between investors & Abu-Dhabi?

Also, does anybody have an indication on the timeline of payoffs now that the UAE has come out of hibernation?

Meanwhile, the new race course seems to be on track, at least that is the all-is-well-impression I got from an archived image in today's Gulf News.

fellow atheist said...

I think Abu Dhabi is missing out on a great opportunity of embracing Dubai and strengthening the union. The current signals coming from Abu Dhabi seem to confirm Davidson's assumption on their thinking.

Dubai's debts are NOT as bad as it sounds. There are many issues Dubai needs to deal with, such as transparency. What is state-owned and what is state-backed? Who owns what? These are things that may need to be worked on. However, life is going on here and it will pick up again. Dubai has created something that no one can match today. A superior infrastructure and relaxed business regulations. It attracts the young and ambitious. Without that, you ain't got nothing!

I think Abu Dhabi will come to regret a missed opportunity, as Dubai emerges from this mess, it will have stronger resolve to become even more autonomous.

P.S. These are just my opinions and I can obviously be off target.

Lirun said...

wow - rough..

wondering.. in todays uae society do people mix much between teh sheikdoms.. im speaking about the emiratis.. like does it matter if people inter marry between the different parts or is tehre separatism there as well..

Anonymous said...

Fellow Atheist,

Dubai has created something that no one can match today.

I'm curious to know how you arrived at this conclusion because I almost bought that line until I read your following post script:

P.S. These are just my opinions and I can obviously be off target.

Still, I'd appreciate if you could list them credibly from a sustainable point of view.

Anonymous said...

I think Abu Dhabi will come to regret a missed opportunity, as Dubai emerges from this mess, it will have stronger resolve to become even more autonomous.

Fellow Atheist,

I think that's a pretty far-fetched assessment considering your mentioning of the word 'transparency'.

The general public here (citizens & expats) can only speculate based on what's been fed to them through the local media. For that matter, we will never know the truth or the extent of this whole mess and what deals were made in the best interests of the country.

Posted by Anonymous 6 December, 2009 15:57

EnglishTeacher365 said...

I read somewhere that Dubai's debt is the equivalent of 50% of its annual GDP, whereas the debt mountain in the UK is equal to FOUR TIMES its annual GDP. In other words, Dubai's debt is only one eighth of the UK's.

I think that puts a bit more of a balanced perspective on things. Though what it means for Dubai (and the UK) I have no real idea!

BuJ said...

will there be a bloodbath of commenters here?

Anonymous said...

To follow-up from the anon comments:

Dubai has created a brand image that is very attractive to the younger Arabs. All the glitter and glamor that Dubai sells to the world is undeniably attractive. The relative social freedom is not to be underestimated. Saudi may have better opportunities for many, but many would prefer Dubai just for that.

I remember when I was working for a major Saudi company here in Dubai. Our entire department was laid off overnight. Then we had some guys come in from Saudi to assess how many of us could be valuable to them in their Saudi office. Out of the 15 people they talked to, NONE accepted moving to Saudi. Zero. The general thinking is, I would rather go out looking for a job or even go back home than work in Saudi.

Now don't get me wrong. I know people who would never want to set foot in Dubai and think Saudi is as close as they can get to heaven. That's great. If we all thought the same way it wouldn't work. I am just saying, the young and educated Arabs are attracted to Dubai.

You also have the infrastructure that the government spent billions on. The roads here are superior to any I have seen. There is no denying the strides made in that direction. The metro alone is testament to that. This is not to mention communication, etc. These are things we take for granted here, but a lot of other countries don't have the luxury of a consistent electrical connection even. Ask a Lebanese.

Safety. Yes, crime happens but seriously.. for what it is.. Dubai is super safe. My wife never felt scared walking around Dubai. She would get mad and frustrated at the "how much?" idiots.. but never scared. She was scared in Paris' underground. Safety is a relative thing. Statistics are great, but what makes a difference is how we FEEL about it. Most people FEEL safe in Dubai.

In the words of a friend of mine (a GCC citizen -- not from the UAE): You have EVERYTHING in Dubai. This is his answer when I complain about something.

As long as Dubai succeeds in attracting the young, educated and ambitious, I will continue to have faith in its ability to survive.

So, the leaders got carried away with mega-projects.. so they over-extended themselves.. it's not the end of the world.

And yes, there is no way for any of us to really know what's going on behind closed doors. All we can do is speculate and guess. However, we all know that the relationship is not all 'brotherly' and there is rivalry and this fuels all the speculation.

Anonymous said...

Greetings,

I am a post graduate student, writing a research paper about UAE blogging community and general management as well as HRM.

How can I contact the manager of this blog? Please email me resha.alhussaini@gmail.com

Anonymous said...

@ Anonymous 7 December, 2009 10:47

Thanks for taking the initiative to respond to my comment addressed to Fellow Atheist.

I'll reiterate once more my question to Fellow Athiest' line: Dubai has created something that no one can match today.

(I'd appreciate if you could list them credibly from a sustainable point of view?)

I don't deny all that you have written in comparison to Saudi Arabia, the safety standards, the metro, etc. I believe any country that depends on imports (commodity & human) has to consider these aspects; being liberal in a veiled manner, safety, reliable transit amongst others. But do these qualify for a one of a kind label?

I again don't deny that there several positive factors about Dubai. Sadly, they are on a decline, as I write.

I'll tell you what's the reason for the current crisis in Dubai. It's the curse of the common man & woman that Dubai treaded over & trampled under its feet in its blind quest for synthetic fame & glory.

Please apply this curse not only in the case of Dubai but every place on Earth that treads & tramples upon every common man & woman who were their first & foremost reason for success & growth in the first place.

That's the Moral of this Day.

Post by Anonymous 6 December, 2009 20:47

rosh said...

Anon 07 December, 2009 19:46 - There's a lot of truth to that. A lot of people share that sentiment. Perhaps a wake up call.

B.D. said...

So, the leaders got carried away with mega-projects.. so they over-extended themselves.. it's not the end of the world.

I agree with the sentiment of Anonymous 10:47. This Dubai crisis is just another part of the larger Western-economy led crises, just as Dubai's boom was a part of that.

Dubai played that game extremely well, even better than those who created it and that is why we have the Dubai we have today. Despite now hitting the brakes mid-stream you have here a very developed economy--with some of the world's best ports, best urban infrastructure and countless impressive, already completed property projects.

I don't doubt that a lot of the hoopla in the media about Dubai's debt crises springs from resentment at how Dubai had somehow managed to play the game even better than those who started it.

Anyway, for the man on the street, Dubai is still a convenient, comfortable, safe and much more developed city than it was 5, 6, 7... years ago at the start of the boom.

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