5 May, 2009
The global economic meltdown has pushed the United Arab Emirates (UAE) to the verge of a political crisis, a US-based think-tank says.
According to a report by Eurasia Group, UAE, the world’s fifth-largest owner of oil reserves is facing a “fat tail” political crisis from the impact of the ongoing global economic downturn, The Wall Street Journal reported.“The weakness of existing federal institutions and personalization in U.A.E. politics exposes Emirati leaders’ inability to respond in unison to the current crisis,” said the Group.
The country is among ten other nations, including Pakistan, Russia, and Mexico that are being affected by the crisis.
The report estimated the chance of a political crisis in the country at 10 percent and predicted that individual emirates of the UAE might seek more autonomy from Abu Dhabi which is currently the dominant sheikhdom.
The speculations have been fueled due the fact that the federal government has so far slowly reacted to the crisis while other sheikhdoms are in dire need for its assistance.
A fall of prices in the real estate sector and numerous fraud cases opened against UAE firms– mostly by foreign investors who claim that their UAE partners defraud them– have badly damaged the Arab nation’s economy.
Eurasia Group warns that rivalry and political tension between the UAE emirates might escalate if Abu Dhabi seeks to extend its dominance over other sheikhdoms.
“A particularly vulnerable moment comes when small emirates attempt to restart economic programs but face federal vetoes,” the report says, hinting that the country is even facing the threat of disintegration. - Press TV
The global economic meltdown has pushed the United Arab Emirates (UAE) to the verge of a political crisis, a US-based think-tank says.
According to a report by Eurasia Group, UAE, the world’s fifth-largest owner of oil reserves is facing a “fat tail” political crisis from the impact of the ongoing global economic downturn, The Wall Street Journal reported.“The weakness of existing federal institutions and personalization in U.A.E. politics exposes Emirati leaders’ inability to respond in unison to the current crisis,” said the Group.
The country is among ten other nations, including Pakistan, Russia, and Mexico that are being affected by the crisis.
The report estimated the chance of a political crisis in the country at 10 percent and predicted that individual emirates of the UAE might seek more autonomy from Abu Dhabi which is currently the dominant sheikhdom.
The speculations have been fueled due the fact that the federal government has so far slowly reacted to the crisis while other sheikhdoms are in dire need for its assistance.
A fall of prices in the real estate sector and numerous fraud cases opened against UAE firms– mostly by foreign investors who claim that their UAE partners defraud them– have badly damaged the Arab nation’s economy.
Eurasia Group warns that rivalry and political tension between the UAE emirates might escalate if Abu Dhabi seeks to extend its dominance over other sheikhdoms.
“A particularly vulnerable moment comes when small emirates attempt to restart economic programs but face federal vetoes,” the report says, hinting that the country is even facing the threat of disintegration. - Press TV
