Abu Dhabi's changing role in UAE
Abu Dhabi's changing role in UAE
When people around the world think of the United Arab Emirates, its capital, Abu Dhabi, is not the first emirate that comes to mind. Rather, Dubai is the most famous of the seven entities that united in the 1970’s.
Indeed, it was Dubai and Abu Dhabi that took the first tentative steps together to create the federation that those in the UAE now enjoy. But it has long been Dubai that has garnered the most fame world-wide for its extravagance, visits by celebrities and the ambitious property developments that contributed to its pre-2008 real estate boom.
The ongoing effects of the 2008 financial crisis have had a crippling effect on Dubai’s financial security though, and in the wake of defaults on loans and a rapidly declining construction industry, Dubai has had to come hat-in-hand to Abu Dhabi for assistance.
This sudden and unforeseen development has led much of the international media to represent the historical relationship between Dubai and Abu Dhabi as (rather unimaginatively) a sibling rivalry.
Dubai is cast as the younger brother, the free-spending, popular one, better-looking and, on the face of it, more successful. But the younger brother now finds himself in debt, and the older, more mature brother, who has always been careful with his money and careful with his friends, is now supporting him through the hard times.
The older brother is of course, Abu Dhabi. His time has now come, the financial recession has embarrassed Dubai, and prompted the international community and, crucially, international investors, to see Abu Dhabi in a new light.
The capital emirate has played it cool, but there are clear signs that a major shift is happening in the political dynamics of the UAE. Abu Dhabi and Dubai have always been on an almost equal footing with one another, but Dubai’s power seems to have diminished somewhat.
The renaming of the iconic Burj Dubai to the Burj Khalifa (emphasis added), was the first.
The Burj was meant to symbolize the pre-imminence of Dubai, the little city that could, a city that has grown from humble beginnings into an international destination on a-par with Monaco or Los Angeles, a playground for the rich.
Instead, Dubai officials, at the launch of the Burj tower on January 5th, carefully changed their message and said that the changing of the name now represented the unity of the UAE federation.
This seems simply to be the diplomatic way of saying thank you to Sheik Khalifa, President of the UAE and ruler of Abu Dhabi, for assisting Dubai financially when Dubai World, a government entity, came face-to-face with financial reality.
It is no secret that Abu Dhabi had, for a long time, grown weary of Dubai’s exceptionally ambitious antics, relying as it did, on a never-ending economic boom.
“There is no doubt that the success of the UAE is the direct result of Sheik Khalifa’s vision,” Abu Dhabi news media quoted Dubai billionaire, Abdul Aziz al-Ghurair, owner of Mashreqbank saying at the opening of the Burj Khalifa. Perhaps it would be more accurate to say that the survival of the UAE is a direct result of the interventions of Sheik Khalifa, whose careful fiscal practises created a surplus by which Dubai could be given financial assistance.
Abu Dhabi has not shared the limelight until now, because it has focused on unexceptional and unglamorous policies. It invested heavily in nuclear energy, for example, instead of in man-made islands, and explored the options available in renewable energies for when its oil reserves run out.
Abu Dhabi may be the careful, unadventurous, perhaps even rather dour older brother of the UAE. But it’s because of this that the federation is weathering the economic storm so well.