The UAE

Today is National Day in the United Arab Emirates and it might be a good time for them to reflect a little.

Last week saw one of the great Central Bank botch jobs. Dubai asked for a moratorium on what in today's market was a modest amount of debt in Dubai World, one of its flagship state entities. The markets, frothy but jittery, didn't like it at all. There was even talk that this might herald a new global recession. What should have happened is that Abu Dhabi, by far the richest of the seven emirates which we used to call the Trucial States (it has 90% of the oil) should have shut down rumours and told everyone there was nothing to worry about. They could have borrowed Peter Mandelson for two days and it would all have been OK.

Now we have Dubai's ruler, Sheikh Muhammed of horse racing fame, trying to calm things down and there is talk of rescheduling all of Dubai's $26bn of debt (nothing by the British Government's standards, of course).

Some people believe that underneath this lies a dispute between the ruling families al Nahyan in Abu Dhabi and Al Maktoum in Dubai. Time to pull your fingers out, gentlemen.