The oil-rich emirate of Abu Dhabi may be set to take over where Dubai, its far more glamorous sister state down the the coast, has left off.

Twin deals initiated out of Abu Dhabi on Monday could signal a major change in power in the United Arab Emirates – the seven state federation which both Abu Dhabi and Dubai belong.

First, Abu Dhabi has subscribed to half of a $20 billion bond offering floated by the government of Dubai to help the emirate pay off the more than $80 billion in debt it racked up during the boom years.

Dubai, which has little oil wealth, borrowed heavily to build a bevy of flashy projects, including its man-made palm-shaped islands, the world’s largest airport and the world’s tallest tower. The city-state now sits on a debt load that is 1.5 times its gross domestic product — a staggering figure.

By assisting Dubai in paying off part of its huge debt, Abu Dhabi is sending a signal that it has the money and the power to lead the U.A.E. through the current economic downturn.

It also forces Dubai’s ruler, Sheik Mohammed bin Rashid al-Maktoum, to eat a bit of humble pie. In accepting the cash, the city-state knows that it cannot run wild like it did during the boom years and must please its far more conservative sister state. Dubai needs another $5 billion this year to meet its $15 billion debt payment. So far, no private investors have stepped up to lend the cash, leaving just Abu Dhabi to make up the difference.

Second, the International Petroleum Investment Company, or I.P.I.C., a state-owned company controlled by Abu Dhabi, made a significant overseas acquisition on Monday y with the purchase of Nova Chemicals of Canada for a healthy $2.3 billion. Nova, which was heavily levered like Dubai and represented in the deal by the Swiss bank UBS, was in dire need of cash to service its debt. Its revenue stream came under pressure because of the decreased demand for its product, caused, in part, by the slowdown in the global economy.

The cash infusion by I.P.I.C. will allow the big chemical manufacturer to ride out the current economic storm. Through the acquisition of Nova, Abu Dhabi shows that it can also afford to do deals despite the jumpy market environment.

In contrast, Kuwait’s national oil company recently canceled a $17.4 billion joint venture with Dow Chemical because of the unstable oil and financial markets. If I.P.I.C. completes the deal, not only will it take control of one of the world’s largest chemical plants in the world, which is worth around $5 billion, but will also be seen as one of the most serious dealmakers in the region.

–Cyrus Sanati