UAE Leaders Try To Douse Dubai Flames

Stock markets in the Gulf reacted negatively for the second consecutive day on the back of Dubai’s debt crisis, even as the UAE leadership tried to reassure investors, according to the Wall Street Journal. The Dubai ruler stressed on cooperation and federal unity across the UAE, while some feared that oil rich Abu Dhabi may not come to the fore to help its neighbor. The stock markets in Dubai and Abu Dhabi closed down for the second day where Dubai Financial Market’s index closed 5.6% down Tuesday after falling 7.3% Monday.

The Prime Minister of the UAE Sheik Mohammed attacked the press for exaggerating and blowing up matters, which comes a month after he had flayed the press for criticizing Dubai and its close and crucial ties with Abu Dhabi. Investor worries came about when the Dubai government indicated that it was not responsible for debts of the state-owned Dubai World that owes a whopping $26 billion. Dubai world has total liabilities of close to $60 billion and has diversified assets that include the much hyped Dubai Palm Shaped islands and Barneys department stores in the US. Unfortunately, Abu Dhabi which has 90% of the UAE’s oil reserves has remained on the sidelines and refused to bail out Dubai World.