Sunday, Nov 01, 2009
(This item was originally published Thursday.)
By Andrew Critchlow and Nour Malas
Of ZAWYA DOW JONES
ABU DHABI (Zawya Dow Jones)--Abu Dhabi will play host this weekend to the competitive world of Formula One. But the start of the grand prix, intended to put the sheikdom on the world map, has stirred up rivalries off the track in the United Arab Emirates.
Motorsport's blue riband races are normally named after countries and the Etihad Airways Abu Dhabi Grand Prix starting Sunday on the emirate's expensively constructed Yas Marina Circuit has raised eyebrows amongst Emiratis in Dubai and the smaller emirates.
"What happened to the federation?" said one Emirati commentator in Dubai when asked by Zawya Dow Jones about Abu Dhabi's branding of the event.
Rivalry amongst the emirates and their tribal rulers has recently been set aside because of the global financial crisis. Oil-rich Abu Dhabi, where U.A.E. federal government resides, has rescued its poorer neighbors. In February, the Abu Dhabi-run central bank pumped $10 billion into Dubai's struggling economy. More help may be needed.
"Abu Dhabi is committed to centralizing the federation," said Christopher M. Davidson, Middle East lecturer at Durham University and author of the book Abu Dhabi: Oil and Beyond. "They're creating Abu Dhabi into a capital city and its development will create some tension with the other emirates."
To be sure, Abu Dhabi is the only member of the nation of seven semiautonomous sheikdoms capable of paying to host the world's most expensive sport. Five hours is all it takes Abu Dhabi's oil wells to pump enough crude to pay the $45 million fee to hold the final round of this year's championship.
The 5.5 kilometer Yas Marina circuit is estimated to have cost Aldar Properties--the developer part-owned by the Abu Dhabi government--at least $1 billion. Aldar has invested a further $600 million developing Yas Island itself, which includes seven hotels and F1's most essential facility, a yacht marina.
Khaldoon Al Mubarak, chairman of Abu Dhabi's Executive Affairs Authority and a mastermind behind the grand prix, says the race will "make the people of Abu Dhabi, the United Arab Emirates and the broader motor sports community proud."
But Durham University's Davidson argues the naming of the event could create "resentment amongst the emirates."
Abu Dhabi is the wealthiest of the emirates, holding 90% of the U.A.E's oil reserves. It's ruler Sheik Khalifa bin Zayed Al Nahyan is also the unelected president of the U.A.E., the highest authority in the country which has stayed with Abu Dhabi since it gained independence in 1971.
After years of being content to simply pump oil and squirrel the proceeds away in its vast sovereign wealth fund, Abu Dhabi's rulers have unleashed a $100 billion infrastructure program when other emirates are cutting back because of the financial crisis.
Guggenheim and Louvre will open Middle East museums in Abu Dhabi funded by its petrodollars, while the financial crisis has forced neighboring Dubai to delay some of its most prestigious projects. Abu Dhabi royal Sheik Mansour bin Zayed Al Nahyan bought last year English Premier League team Manchester City for about $400 million to promote the emirate.
The grand prix is part of the same Abu Dhabi strategy that has seen it pump billions of dollars into projects that compete directly with Dubai, the second-largest sheikdom in the federation. These include Etihad Airways, which now rivals Dubai's Emirates Airline and a media business park called twofour54 that competes directly with Dubai Media City.
Dubai will fight back in December to regain the limelight with the opening of Burj Dubai, the world's tallest skyscraper, an event it's coordinating with the country's national day.
"Abu Dhabi's star is rising," says Victoria Barbary, a London-based sovereign wealth funds analyst at Monitor Group. "Regardless of Dubai's few years when it was the pinnacle of the U.A.E., Abu Dhabi is the boss."
-By Andrew Critchlow and Nour Malas, Dow Jones Newswires, +9714-364-4960; andrew.critchlow@dowjones.com
Copyright (c) 2009 Dow Jones & Co.
(END) Dow Jones Newswires
01-11-09 0419GMT
