Thursday, March 09, 2006

End of port controversy - beginning of consequences

Dubai threat to hit back
By Roxanne Tiron, The Hill

This ports deal has gone down in flames, and gone down badly. Congress rushed to legislation to block the deal, outright rejecting the 45 day investigation. DP World, seeing they were never to be given a chance, released the US assets, turning them over to a yet unnamed American company.

The controversy has ended. And now... the consequences begin.

As the House Appropriations Committee yesterday marked up legislation to kill Dubai Ports World’s acquisition of Britain’s Peninsular and Oriental Steam Navigation (P&O), the emirate let it be known that it is preparing to hit back hard if necessary.

A source close to the deal said members of Dubai’s royal family are furious at the hostility both Republicans and Democrats on Capitol Hill have shown toward the deal.

“They’re saying, ‘All we’ve done for you guys, all our purchases, we’ll stop it, we’ll just yank it,’” the source said.

Retaliation from the emirate could come against lucrative deals with aircraft maker Boeing and by curtailing the docking of hundreds of American ships, including U.S. Navy ships, each year at its port in the United Arab Emirates (UAE), the source added.

It is not clear how much of Dubai’s behind-the-scenes anger would be followed up by action, but Boeing has been made aware of the threat and is already reportedly lobbying to save the ports deal.


But when it comes to the emirates’ cooperation in the war on terrorism and in intelligence gathering, there is concern that some help may be pulled.

“If we reject the company in terms of doing the [ports] work, they are going to lose a lot of face. In the Arab culture, losing face is a big deal,” a former government official said. “We risk losing that help. It is not an empty threat.”

Dubai is a critical logistics hub for the U.S. Navy and a popular relaxation destination for troops fighting in the Middle East. On many occasions since the ports story erupted, the Pentagon has stressed the importance of the U.S-UAE relationship.

Last year, the U.S. Navy docked 590 supply vessels in Dubai, plus 56 warships, Gordon England, deputy secretary of defense, said in a Senate hearing last month. About 77,000 military personnel went on leave in the UAE last year, he added.

During the hearing, he warned about the implications of a negative decision on the ports deal: “So obviously it would have some effect on us, and I’d not care to quantify that, because I don’t have the facts to quantify it. It would certainly have an effect on us.”


Senate leaders have indicated that they would wait to take action until the new 45-day Committee on Foreign Investment in the United States (CFIUS) review is completed.

From an article in the Khaleej Times...

Analysts said the political furor was bound to provoke businesses in the world's biggest oil exporting region, which is an increasingly important source of financing for the huge US current account deficit.

'It's American double standards. Do you think that businesses and governments here won't react and even retaliate?' said Wadah Al Taha of the National Bank of Abu Dhabi.

He said the issue was likely to feature prominently in trade talks later this month between the United States and the UAE, a federation of seven emirates that includes Dubai.

The Dubai Ports row has reinforced fears in the Middle East that investments in the United States have become politically risky for Arabs and Muslims. Some Arabs say the US opposition to the deal smacks of racism.


The UAE is a close ally of Washington and a frequent port of call for American warships. Concerns are growing that the fallout from the ports row will affect US economic ties with the Gulf.

UAE Economy Minister Sheikha Lubna Al Qassimi said last week the furor could prompt other countries to divert funds away from the United States.

American businesses in the UAE warned on Wednesday that trade worth more than $8 billion between the United States and the United Arab Emirates could be in jeopardy.


Rastus said...

You know, the more I learn about this whole affair, the more tragically ironic it all appears. To a large extent, Bush has played right ito the hands of the Democraps and their MSM cronies by approaching this deal almost solely from a business perspective. The more I learn about it, the better the deal looks. But it doesn't matter. It could be the salvation of America's economic future and it would still have problems politically in a post-911 America. And only a blind man couldn't see that, or a too arrogant one ignore it.

The fact is -- and this is political reality, whether we like it, or approve of it, or not -- that the image of Arabs laughing and celebrating in the streets after 9/11 is indelibly burned into the psyches of practically every American. That, and the near total lack of any denunciation of such acts by the Islamic community at large has bred a potent and enduring distrust of ALL Muslims in the minds of most Americans. One can complain about xenophobia all one likes, but xenophobia is bred in precisely these kinds of images. In such a climate, it is the height of folly and arrogance to think that one can simply announce that "this is a good deal and all the proper agencies approved it", and Americans will simply accept such a declaration on its face. Remember, Americans have also learned to distrust their own government nearly as much as they now distrust Muslims.

Don't get me wrong -- I'm not saying that these perceptions are necessarily correct, only that they are fact, and that fact MUST be taken into account in any dealings with the Arab world. I think Bush's problem today is that he has been approaching his second term as though he has an almost carte blanche mandate to pursue his policies. He doesn't seem to understand that even if he was given a mandate, that doesn't mean that those who gave it to him don't want to be consulted on the details of its implementation. This IS a representative republic, after all, and politics ALWAYS prevails. People need reassurance, the kind of reassurance that tells them that their concerns have been addressed.

That was what made Ronald Reagan so successful as a president: He always, ALWAYS communicated his rationale with the people, and he did so clearly, simply and concisely. People didn't always agree with his decisions, but because they understood the reasoning behind them, they at least trusted that those decisions were well-informed and rational. But the way this was handled came across as almost patronizing. Little wonder the furor that arose.

And this worries me, because the potential consequences include a reversion to a leftist government, after all the hard work that finally brought us out of a 60 year long political travesty. Bush needs to get his political gurus together NOW, and start taking his message to the people more effectively once more, lest he end up handing the nation right back to the Clintons. As it stands, it almost appears as though that's what he's trying to do.

MataHarley said...

You are right on in many cases, Rastus. And the irony is that the day after the deal crashed and burned, all the media started writing articles about how it may not have been a bad deal afterall.

Can you say... "too little... too late"

Xenophobia, a trait we don't care to admit to, is a reality. And it is not confined to Americans. Muslims have it as well. And, unfortunately, the best way to cure that is to establish relationships ... such as this port deal... so that over time we become more comfortable and civil.

I have no fault with Bush on this. Congress set up the CFIUS process themselves. They wrote the statutes, and set up the committee to do their job. And when doing so, the WH doesn't see the results of investigations until after the review period, just as Congress doesn't. So if Congress don't like the process, they have only themselves to blame.

Nor can they say they weren't in the know. It was public last fall. To claim ignorance now is merely to disquise the fact that, if genuinely concerned, they were asleep at the wheel months ago. But since it isn't about national security, but about posturing for mid-term elections and appearing more "security conscious", perhaps the timing was not as advantageous back then. Remember that for all the talk about low Bush approval ratings, Congress has an even lower number amongst voters.

And I must agree... the weakest link in this WH is Bush's PR people and handlers. How many times have I screamed at the TV screen information they should be imparting themselves. They are absolutely the worst at communications. They should just turn Bush loose in townhalls and let him interact where he's most comfortable.

And the result of all this will be a change. The Republican sweep of power has proven to be a wasted opportunity. And again the winds of power will switch hands. Not because Dems can do it better, but because it is merely a change... and done with a hope in the voter's heart that maybe someone down the line will do it right.