Monday, March 06, 2006

Dubious Dubai Deal

"Smearing all things Arab remains the last acceptable form of ethnic bigotry in America.....(Politicians) ought to be ashamed."
James J Zogby, President of the Arab American Institute (1)

This is an example of the reaction to objections by members of Congress to the impending take-over of a port-management contract by Dubai Ports World (DPW), which is controlled by the government of the United Arab Emirates (UAE). The contract to manage 21 American ports had been made with Penninsular and Oriental Steam Navigation Company of London, which DPW is buying for $6.8 billion.

On one hand, DPW has an impeccable record (so far) of port security. On the other hand, Dubai complies with the Arab League boycott of Israel. On the other hand, DPW will have to deal with Israeli ships docking at US ports. On the other hand, some of the September 11 hijackers were subjects of the UAE. On the other hand, the UAE is allied with the US in the War on Terror, even sending troops to help our struggle in Afghanistan. ( I don't know about you, but I am running out of hands.)

The real problem is that the American people are like film-goers who arrived about half-way through the movie-----they see that the characters are in trouble, but have clue about how they got themselves into it. Until the DPW takeover, most of us (including your author) had no idea that management of American ports had been outsourced to a foreign company at all. Since we have been allied with the British on virtually every conflict either country has been involved in the last hundred years (2), we would tend to trust the Brits more than other foreigners on security matters.

Mr Zogby and the Bush Administration maintain that the same trust be accorded the UAE, and here is where some members of Congress (including some Republicans) part company with them. Although the government of Dubai and the rest of the UAE are firmly allied with the United States, we are not so sure that all the people of these Emirates feel the same way.

The UAE, like Saudi Arabia and Kuwait, are monarchies. US interests in Saudi Arabia have been attacked repeatedly despite the friendship of the royal family and government officials. Those who attack Americans there are also enemies of the regime, which is not entirely effective in dealing with the rebels. The people we are fighting against in Iraq and Afghanistan have allies and sympathizers in every Arab country, including Dubai. It is plausible, though not provable, that some secret enemies of America have (or will get) jobs with DPW.

Some people say that our port security today is so weak that Arab management won't make any difference. They also point out that security is in the hands of American agencies such as Homeland Security and the Coast Guard. This is true right now, but efforts to improve security in the future cannot succeed if the details of these efforts are leaked to smugglers or terrorists. Given that DPW has an Arab Muslim staff, the chance that security secrets shared with this staff will be leaked to the wrong people is too great to risk.

Looking back on the entire issue of outsourcing port-management, it is obvious that the contract should have included a "poison-pill provision" that would have cancelled it upon the takeover of the managing firm. Apparently the US can still cancel the contract now, but only by publicly repudiating Dubai and thus incurring the wrath of the Arab World.

Despite the protests, it looks like DPW will get a chance to manage American ports. There is a strong incentive for the firm to adopt stringent security measures and meticulous background checks for new employees. OK, let the Dubais have their chance; but one security breach is one too many for them to stay on.

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(1) The Baltimore Sun, reprinted in the Milwaukee Journal Sentinel on page 6J March 5, 2006.

(2) Except that the 1956 British invasion of the Suez Canal Zone, supported by France and Israel, was opposed by the United States.

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