The Lesson Drawn from Investing in US Ports
Jawad Anani Al-Hayat - 16/03/06//
"Privatization" has been, as we have learned throughout the past three decades, a cornerstone to building the then predominant economic concept. Thanks to the so-called "Thatcherism" after Margaret Thatcher and "Reaganism" after Ronald Reagan in the 80s, privatization has become the engine of economic liberalization and the symbol of political management to re-distribute roles between the private and public sectors.
On our part, we have embraced and implemented privatization, thus meeting remarkable success in Egypt, Jordan, Morocco, and Tunisia, then recently after intimidating pressures, in some Gulf countries, like the Kingdom of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain. Interestingly, some Gulf countries have staunchly championed privatization in the past three years after having long lingered in this field. Most importantly, the plan to expand privatization will be broader, more comprehensive, audacious, and outward looking.
In truth, many reasons have hindered privatization in the Gulf countries, where the labor division between the private and public sectors is so different than in other Arab countries, and where the population is relatively low compared to the number of new incomers. Likewise, as officials were entitled in some countries to conduct trade and business, the call to privatize seemed odd and ambiguous. In addition, privatization in the Gulf economies has never been convincing. For these countries have not lacked funding, while their indebtedness has been both limited and under control. Moreover, forging partnerships with more technologically advanced countries may be compensated by the purchase of unavailable technologies.
Yet, the economic circumstances and the need to diversify the economic base, enhance performance, and preserve welfare, have all objectively pressed the Gulf countries to move in this direction. Therefore, the debate driven by the following questions: "What is the point of privatization? Why shall I trust foreigners?" is no longer valid in light of the current huge expansion in the Gulf region. In addition, the Gulf countries, willing to invest in successful projects and companies across the world, will be certainly depicted as vulnerable and backward if they tarry in embarking on privatization. Besides, thanks to the criteria governing the membership agreements to the WTO or the requirements of the Free Trade Agreements (FTA) concluded between Europe, the United States, and other Arab countries, privatization has become prerequisite to honoring these commitments.
All of a sudden an extraordinary story surfaced: a UAE corporation purchased a company in charge of operating 6 major ports in the United States - a deal that was about to comply with the enforced laws and predominant practices there. Nonetheless, some Congressmen exploited this transaction to attack the currently unpopular and un-influential administration of President George Bush - with the mid-term elections looming ahead. By these elections we mean that at the end of the second year of the initially 4-year US presidency, all 2-year elect Congressmen will be reelected. So will the thirds of Senators (34) and State governors. Let alone many civil servants in other local posts, such as the district police chief, the attorney general, municipal councils, and others.
It remains to be mentioned in this regard that these elections are scheduled for next November 2.
All rivals, whether those seeking to win another term or the new candidates, generally search for issues likely to attract the public attention. Here emerged the story of "Dubai Ports World - International" (DPW.YY) that purchased a British company managing six US basic ports; a story the said politicians could not but harness to serve their goals. Even more, some members of the opponent Democratic Party have attracted and mobilized the media outlets to advocate their cause. Though the Senate has pondered on this question and on all its security, economic, and administrative aspects, many Congressmen were still dissatisfied and resilient. Similarly, some Republicans have even renounced to their former stances, abandoning their widely unpopular president in an attempt to ensure their re-election.
Under these circumstances, "Dubai Ports" put forth many proposals to entrust the management to Americans only and to leave the security aspects for the US States and cities, where these ports are located. Amid the unwavering vociferous outcry, the corporation found itself obliged to withdraw and offer its shares for sale.
Even though the US President has understood the bad message such step will convey, especially to the so-called US friends and allies, the damage is already done and cannot be reversed. This lesson comes to remind us, we the Arabs, that the United States only wants us to deposit our funds at its banks or smoothly invest them in some hotels and real estates.
Adventurism and entrepreneurship characterizing Dubai's investments unveil the real intentions and double standards the US representatives adopt in dealing with the Arabs and their causes.
Still, such hardship may prove to be beneficial. It is time now to muster the political will to invest in Arab projects. By brandishing this slogan, we do not the least reject openness to the United States. But, in this vast world, we must give top priority to the neighbors. So must the United States.
* Mr. Jawad Anani is an economic expert in Al Basira Consultants
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