The United Arab Emirates’ vaguely-worded statement of support yesterday for Dubai—which didn’t actually mention the city-state by name—isn’t reassuring investors, who fear rocky relations between emirates, the cash-strapped Dubai and oil-rich Abu Dhabi. The latter could easily wipe out Dubai World’s delinquent $59 billion debt, but the predominant speculation is that it’ll want major concessions in any bailout, the New York Times reports.
The cities are nearly polar opposites—Dubai the brash, secular upstart, Dhabi the established, religious older brother. When reporters asked Sheik Mohammed bin Rashid al-Maktoum, Dubai’s ruler, about tensions last week, he told them, in English, to “shut up.” Yesterday, the UAE central bank in Abu Dhabi issued a statement that it would make money available for local banks, but pointedly didn’t name Dubai World. Investors also fear that secretive Dubai's total debt could be as high as $120 billion.