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TUESDAY, FEBRUARY 9, 2010
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6

Abu Dhabi Won't Bail Out Dubai With Blank Check

UAE capital will 'pick and choose' its aid

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(Newser) – Investors who hoped that oil-rich Abu Dhabi would write a blank check to cover the massive debts of Dubai—its flashier UAE sister city—got some bad news today. The capital city will instead "pick and choose" where to help. "We will look at Dubai's commitments and approach them on a case-by-case basis," a government official told Reuters. "It does not mean that Abu Dhabi will underwrite all of their debts."

Dubai set off tremors in world markets this week when it announced it would delay payment on $60 billion in debt. "Some of Dubai's entities are commercial, semi-government ones," said the Abu Dhabi official, whose government provided $15 billion in immediate relief through the central bank of the United Arab Emirates. No more is coming "until things become clearer. ... Many things have to be clarified by Dubai."

A camel keeper feeds his camels in the outskirts of Dubai. Burj Dubai, the world's tallest under construction tower is seen in the background.
A camel keeper feeds his camels in the outskirts of Dubai. Burj Dubai, the world's tallest under construction tower is seen in the background.   (AP Photo/Kamran Jebreili)
Laborers work on a bridge in Dubai, United Arab Emirates, Saturday, Nov. 28, 2009.
Laborers work on a bridge in Dubai, United Arab Emirates, Saturday, Nov. 28, 2009.   (AP Photo/Kamran Jebreili)
Laborers work on a bridge in Dubai, United Arab Emirates, Saturday.
Laborers work on a bridge in Dubai, United Arab Emirates, Saturday.   (AP Photo/Kamran Jebreili)
The Gate building, left, of Dubai International Financial Center.
The Gate building, left, of Dubai International Financial Center.   (AP Photo/Kamran Jebreili)
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6 comments
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divetrader
Nov 28, 09 1:48 PM CST
No blank check??? The banks must not be the ones struggling. Reply
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IN RESPONSE:
cochiserocks
Nov 29, 09 6:17 AM CST
@Yourself and @ Fondue, I've been out there a coupe of times and you're totally right - The oil is pretty much done too - but this was always the plan though. Abu Dhabi gave them free reign and just sat back and watched what worked and what didn't. Now they'll sweep in and cherry pick the best projects, leaving the worst to falter. They've already started construction in Abu Dhabi on a bunch of new cities in the desert - as well as a couple of those artificial islands. They're really much more classy and cautious than Dubai and knew all along this bubble was going to burst. We're watching some proper family dynasty power goames unfold here.
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Derni
Nov 28, 09 1:56 PM CST
The country with the $$$ has all the cards in its hand..Dubai ..well they're the rodent that never put away fdor the winter storm..and now they pay dearly to the oil rich friend Dhabi..And EnglAND WILL BE HIT BY THIS FINANCIAL MESS-AMERICA HAD ABOIUT 13-17 MILLION INVOLVED Reply
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IN RESPONSE:
Yourself
Nov 28, 09 5:33 PM CST
you make it sound like Dubai is a country... it's just a city in the United Arab Emirates. With that said, they don't have as much money as they make it look like they do, kinda like the banks in the US did before our market crisis. it's all a ruse, a ploy, a charade, a joke... Dubai is a big fake illusion of pipe-dreams...
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Fondue
Nov 28, 09 6:11 PM CST
Dubai is the new "Swampland" scam. Reply
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+1

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