To fight the financial zone Abu Dhabi Dubai

REUTERS

DUBAI/ABU DHABI

For a decade, Dubai has flourished as the Middle East top financial centre, treatment of tens of billions of dollars of oil wealth. That dominance can now be threatened if neighboring Abu Dhabi calls for a piece of the pie.

Last week, Abu Dhabi sketched plans for a full-service financial zone on an island near the city centre that have will have its own administration, Court system and tax incentives for banks and other companies from around the world.

The announcement caused consternation among thousands of banks, fund managers and other financial professionals in Dubai, some of whom might be in the future to commute along the highway from the 130 kilometers (80 miles) linking of the desert cities-or even permanently move to Abu Dhabi.

Dubai has large competitive advantages, including the deep-rooted status, a creative corporate culture and a cosmopolitan lifestyle that many expats executives to settle there convinces.

But Abu Dhabi has narrowing the gap in many of these areas, and it has more money than Dubai, which it bailed out with $ 10 billion emergency loans during the global credit crisis of 2009. If the hair is aggressively implements, financial firms the money hard to resist.

"Abu Dhabi makes a tough competitor for Dubai," said Jim Krane, Golf economic analyst at Cambridge University judge Business School in Britain, and author of "Dubai: the story of the world's fastest city".

Expressed or implied, Abu Dhabi can access to business use with its State-owned financial institutions as a way to convince enterprises set up there.

"If Abu Dhabi tough plays, banks give an ultimatum-move to Abu Dhabi or else-few of them will be able to resist, given the much larger economy and liquidity pool across the border." In the last few decades have different cities laid claim to the Middle East top financial center, including Alexandria in the 1950s and then Beirut until the Lebanese civil war in the 1970s allowed Bahrain to emerge.

Dubai snatched the title in 2004 after the opening of the Dubai International financial centre (DIFC), offering foreign investors benign regulation and efficient infrastructure.

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