Ok... for those of you who haven't been following the news recently, the large seaport management firm "Dubai Ports World" received an OK from stockholders to purchase the British company "Peninsular and Oriental Steam Navigation Co." for about 6.8 billion dollars.
Why does this matter? Because Peninsular and Oriental Steam Navigation Co. manages and operates ports in the United States... six ports in fact: New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. The deal would put Dubai Ports World in charge of major shipping operations at those sea ports. Because ports are sensitive points of entry, the United States Government is required to investigate and approve the security plans of new companies seeking to operate such ports.
From everything I have read, Dubai Ports World cooperated fully with the government organizations charged with that investigation and approval process.
Under the process conducted by the Committee on Foreign Investment in the United States (CFIUS), officials carefully reviewed the national security issues raised by the transaction and its effect on our national security. Twelve Federal agencies and the government's counterterrorism experts closely and carefully reviewed the transaction to make certain it posed no threat to national security. (reference - emphasis added)
Dubai Ports World waded carefully through the bureaucratic quagmire that is the US Government approval process. And, recently, the administration approved Dubai Ports World's bid to acquire the Peninsular and Oriental Steam Navigation Co. As standard procedure, this process never rose above the Sub-cabinet level. It was a routine investigation that turned up no signficant security concerns.
Sounds like your basic bureaucratic approval process, right? So... what happened? Politics happened. Thinking more about November 2006 than anything else, a few choice Governors and Members of Congress basically threw a hissy fit. Talk about politics turning on its head... Bill Frist is siding with Hillary Clinton and Jimmy Carter has expressed his approval of President Bush's move. Woah! This is the weirdest Tag-Team match I've ever seen.
Anyways. Senator Frist has threatened to pass legislation to block the approval and acquisition process. Bush came out, said that was a stupid idea and threatened to veto. I'm sure I sound like a broken record on this one... but I'm gonna side with Bush on this one.
What is the problem? What are these senators complaining about so loudly?
1) Dubai Ports World is a partially state-owned operation in the United Arab Emirates.
2) Some of the 9/11 hijackers did their banking, lived temporarily, or sent packages through the United Arab Emirates.
3) Obviously the knee-jerk assumptions of politicians and press know more about a company's security plans than the various government organizations who wholeheartedly approved this acquisition.
Anyways, am I rambling? Have I lost anybody yet? I'm sorry, but I think background is important.
So, what did everybody learn in our basic Universty logic class? Anyone? Anyone? YES... we learned that CORRELATION IS NOT CAUSATION. Just because apples and oranges appear in the same basket doesn't mean that they came from the same tree.
Let me put it this way:
1) Dubai Ports World operates ports ALL OVER THE WORLD... in places like Dubai, Germany, Shanghai, Djibouti... oh yeah... and HONG KONG. Obviously they do a pretty decent job (especially since they seem to have $6.8 billion dollars to go around acquiring other large companies)
2) The United Arab Emirates is a growing economic powerhouse and a significant ALLY in the War on Terror. I will have to strongly disagree with your characterization of the UAE as a "government known to abide and associate with Al Qaeda." We need to open our eyes people. All Arab countries are not created equal. Now, I would be concerned if the government of Yemen or Syria or Iran was seeking to take over our ports. But, the UAE is a cooperative, or if not, a friendly government to the United States.
3) Many have criticized this deal because a foreign government (namely the Government of the Dubai City-State) would control the ports. But, what is the government of Dubai? The entire system is one big family-owned business. Yes, it is a government... but they are also a very profit-minded business. Citizens of Dubai are more like investors in a large company than subjects or citizens. So, I don't think we should freak out when a business-mined government is looking to make an aquisition.
4) The only real evidence anybody has against the UAE is that a few 9/11 terrorists were UAE Citizens, and they did some banking there. But, if that is our standard of judgement, why in the world did we allow a British company to run our ports? The infamous attempted Shoe Bomber was a Brit... and we know that terrorists have done business there. As I said above... correlation is not causation. We should not punish a government or a company for the actions of a few citizens (and, we shouldn't really do the opposite either, but I can see more justification for that).
5) The primary tasks of inspecting incoming cargo still fall upon the US Customs Administration and the Coast Guard. Dubai Ports World will take over none of the National Security aspects of running the port. That is still our government's job. They need only prove that they will obey the rules and regulations of the United States when hiring workers for sensitive positions... just like every other company.
President Bush put it this way:
If there was any chance that this transaction would jeopardize the security of the United States, it would not go forward. The company has been cooperative with the United States government. The company will not manage port security. The security of our ports will continue to be managed by the Coast Guard and Customs. The company is from a country that has been cooperative in the war on terror, been an ally in the war on terror. The company operates ports in different countries around the world, ports from which cargo has been sent to the United States on a regular basis. (February 21, 2006)
In summary, I agree with Bush and the Arab World on this one. The adverse reaction to this deal is nothing but Islamophobia. It is a frantic attempt to pander to the uninformed public through false stereotypes. Domestically, it is a silly attempt to discredit President Bush in the area where he is strongest. And, as you can likely tell, it all makes me mad!
Dubai Ports World should be subject to the same scrutiny and security precautions as any other port management company. But, we should not discriminate against the company just because it is from a country that speaks Arabic. C'mon people... put your thinkin' caps on!
Now, we could have a long debate over whether foreign companies should be managing our domestic ports. If we want to ban foreign countries from operating... let's do it. That will shut down all but the state-managed ports in the USA... basically shutting down both coasts to international shipping. You think foreign products are expensive now? If that is our priority, let us be consistent... all or nuthin'!
The deal between Dubai Ports World and that British company with a long silly name should go forward under the laws of the United States. If the DOC, DOD, CIA, and the rest of the 12 agencies said that Dubai Ports World is compliant... then what is holding us up??
Overall, if Frist follows through with his Hissy Fit... I think Bush should follow through with his veto. I think Bush is in the right on this one (see statements here and here). Dubai Ports World has every right to bid and invest in the United States if they are willing to play by the rules. I hope we can get over this soon and continue a strong economic and strategic relationship with the United Arab Emirates. Plus... I'm all excited to go skiing.
That is all.
Horatio the Pragmatist
PS: Since I wrote this, Dubai Ports World has voluntarily agreed to reopen the investigation to help placate congressional furor. They will voluntarily subject themselves to an extra 45 day investigation so they dont' have to sacrifice a 7 billion dollar deal. Overall, this is silly politicking... an example of people inside the beltway trying to freak everybody out before the 2006 election.
I can only hope that we continue to have politicians who go to Washington seeking to make it better... and less superficial and political.
2 comments:
Re points 2 and 4 - several years ago, the UAE was by definition one of the worst enemies of the United States - when only three regimes recognize the Taliban-led government of Afghanistan, and the UAE is one of them, it certainly puts the UAE on a blacklist.
Certainly one can claim that the UAE "got religion" (as it were) and subsequently joined the Good Guys, and that the past should be forgiven. And if Bush is willing to reward every country who has exhibited good behavior over the last few years, and ignore those whose sins occurred more than a few years ago, more power to him. Obviously North Korea and Iran don't fall into this category, but what about Cuba? Or are there different standards for different countries?
Personally, I think we should start negotiating with Cuba. But, since there is really no strategic reason for us to acknowledge Cuba, why should it be a priority.
The UAE is coming out into the open and trying to build relationships with the world. DP World does exceptional work (from everything I have read), which is why it is expanding so quickly.
Is the only evidence we have against them that they recognized the Taliban? I would guess that was a business decision, rather than a stamp of approval on the governmental system.
Regardless, this is a company that has already been VERY cooperative with this process. Even in the face of an unprecedented and seemingly unwarranted congressional freak-out, they are offering themselves for further scrutiny.
This deal was not done in the dark. Rather, it was painted such for a political purpose. Maybe the further investigation will prove me wrong... but I doubt it.
I think we need better relationships with these kinds of companies. Maybe they'll help improve our oil port infrastructrue.
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