3.20.2006

The Other Side

The ports controversy has been a godsend for the Democrats. They have managed to put President Bush and the Republicans on the defensive on the one issue where they’ve consistently lead the Democrats – national security. It has allowed Senator Clinton to sound hawkish, perhaps, for an eventual presidential run. The controversy has allowed newly appointed Sen. Menendez (D-NJ) to win greater name recognition and to establish a small lead over his likely challenger in November – Thomas Kean Jr. The ports issue allows Democrats to appeal to multiple constituencies, disparate constituencies ranging from security moms to protectionists in the labor movement to Islam-bashing conservatives, all under the purportedly well-intentioned garb of national security. In turn the Republicans jumped on the bandwagon, and the bipartisan cacophony sank the DP deal.

I won’t beat a dead horse – plenty has been written, the details scrutinized, the angles analyzed. Instead I was curious about the reaction in UAE, something that had received very little coverage in the US. Here are some excerpts from UAE-based news and media outlets:


No Ports or Nukes for Muslims - BY ERIC S. MARGOLIS
THIS is not a good time to be a Muslim. Today, in the Western world, openly expressed hatred and contempt for Islam and Arabs has become the only socially acceptable prejudice.

The collapse of the Dubai ports deal is the latest striking example. The highly professional port operator, DP World, was forced to give up a deal to manage East Coast US harbours after an enormous political uproar in America. At the heart of the uproar was the fact that DP World was owned by the Arabs.

…A bi-partisan coalition of Islam-hating conservatives, evangelical Christians, publicity-seeking Democrats and the mighty Israeli lobby, forced President George Bush to back down on the port plan. UAE, a staunch US friend and ally, was slapped in the face. But it had the good sense and good taste to withdraw from the no-win battle.

Opinion, Khaleej Times, Bill O’Brien and Matein Khalid
...Yes indeed, thanks Bill and Hill. Oh by the way, where was the ‘maximum control’ and opposition to ‘foreign government’ approach when the Clintons allowed the Chinese Government-controlled companies to get control of terminals on the US West Coast? When reporters queried the Clinton Administration’s Press Office in the late 90s about a Chinese firm getting control of the Panama Canal operations, the reply was the administration viewed the fury over port control as ‘silly stuff’...

Official Reactions, Gulf News
The UAE Central Bank Governor yesterday said the controversy surrounding the DP World deal to manage port operations in the US would not affect the free trade negotiations but could impact negatively on the business relations between the two countries.

"What happened is very bad and it is not right to mix up political issues with commercial issues," Sultan Bin Nasser Al Suwaidi said. "What the US is doing goes against the tenets of international trade, which they created in the first place."

Gulf News Headline: CNN's online readers prefer mafia over Arab company
When CNN readers online were asked who they would rather have overseeing operations at US ports an Arab-based company or the US-based mafia roughly 63 per cent of more than 30,000 voters felt the mafia was more trustworthy.

CNN's QuickVote is not a scientific poll, but the results were more than hypothetical.

We heard you loud and clear.
According to a Gulf News poll, 64 per cent of readers say the DP World affair "changed their opinion for the worst" about investing in the United States. A number of businessmen told the newspaper yesterday that Arab investors would think about other destinations. The majority agreed that DP World has been forced out of the US port operations due to "racism"...

...We don't feel that DP World lost. It in fact won the respect of the international business community when it won the bid to acquire the British P&O Company. It gained the admiration of the political community when it showed the maturity to bow out with grace.

Nevertheless, the whole affair served as a lesson for other Arab companies who may have thought of investing in what has proved to be a hostile US atmosphere. All the free trade talk proved to be just empty rhetoric. Another irony is that the Democrats, the supporters of globalisation, were the key opponents of the deal. There must have been something else behind the sudden change of heart.

It was definitely not the concern for national security, as they fully know the Bush administration had run a meticulous review of the deal, which established it was not a threat. Was it the "Israeli element" as some have suggested? Maybe. Otherwise, why would some Congress members bombard the DP World executive, during last week's hearing, with questions about the Arab boycott of Israel? Did they want to force the UAE to end the pan-Arab boycott of Israel in order approve the deal?

These questions need to be investigated. But the fact remains it was an ugly scene in Washington. Other foreign-owned companies run US ports but they were not Arab. That is the message.

And we got it.

(Gulf News, March 6, 2006)

The Ports Deal: A View from the UAE, Abdulkhaleq Abdullah
The hostility against DP World will further dent US credibility in the region, said Abdul Khaleq Abdullah, a professor of political science at UAE University.
"Dubai was forced out [of US port operations] as a result of racism and politicisation of a purely business transaction," he said…

…Swapping a sound business package, which is in the best interest of the US, for petty political gains is not what the outside world expects from champions of free trade and economic liberalisation in the US Congress.

The UAE is a moderate country and a good friend of the US in the Arab World, in itself a rare commodity. This Arab Gulf state which is referred to by the US State Department as "key partner in the war on terror" has succeeded in staying clear of Islamic fundamentalism.

Its record of fighting global terrorism is impeccable. There is no denying, however, that some of the financing for 9/11 has gone through its banking services.

But then again most of the pilot training for the 9/1 1 took place in the US and most of the elaborate planning for the tragic attack on New York and Washington took place in Hamburg, Germany.

No one has ever suggested punishing Germany or thwarting the Daimler takeover of Chrysler, a strategic US asset of similar magnitude to the DP World acquisition of US ports. The DaimlerChrysler partnership created a world class entity that strengthened trans-Atlantic business cooperation.

The ports deal has similar potentialities to strengthening Arab-American relationship. This is a fundamental American objective. The ports deal is a huge strategic asset. It comes at a time when US is investing heavily in political and economic reform in this deeply turbulent region. This is a godsend opportunity to show the seriousness of reform intentions in Washington.

Since 9/l1 the UAE government has done everything conceivable to clear its financial sector and bring it in line to world standard. However, there will always be a bad guy who will try to exploit our open economy and free society.

This however, is no reason to punish a county that adheres strictly to the principle of free trade which has been fundamental to its emergence as the second largest economy in the Arab World and eventually as a possible Arab Gulf Tiger.


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