Right now, the quaintly named Peninsular and Oriental Steam Navigation Company (P&O), an old, privately owned British shipping firm, manages six of our busiest east-coast ports. Dubai Ports World (DPW), a shipping company owned by the government of the United Arab Emirates (UAE), wants to take over from the Brits. Not to worry, proponents of the deal tell us: the UAE is a friendly country, and besides, in today’s global economy, this is a perfectly ordinary commercial transaction–a business deal, not a political one. As Daniel Henninger put it: “Presumably they are in the port management business for the money.”
It would be comforting if either of these claims were true. Alas, available evidence raises serious doubts about both. Let’s start with the friendliness claim. Proponents of the deal insist that, whatever hostilities may have existed in the past, the UAE rallied to our side after September 11, 2001. If so, the people living there didn’t seem to get the message. Zogby International pollsters asked a representative sampling of citizens of the UAE if their overall impression of the U.S. was favorable or unfavorable in 2002, after 9/11 had demonstrated our vulnerability to the world. Only 11 percent responded that their impression was favorable; 87 percent responded that it was unfavorable.
Things did improve a bit when he asked them again in 2005, after we had demonstrated our military might, and our willingness to use it, in Afghanistan and Iraq. Only 73 percent hate us now. Compare that with a 2005 poll in Afghanistan, where World Public Opinion.Org found that 81 percent of the people view us favorably, or India, where the Pew Global Attitudes Survey found that 71 percent do, and it’s clear that it’s a misperception to see the UAE as a friendly country.
Even if we make special allowances for the fact that the UAE is an Arab state, and compare it only to other Arab states, it’s a stretch to call it friendly. In Morocco, for example, in that same 2002 Zogby poll, 38 percent of the people viewed us favorably–hardly a ringing endorsement, but more than three times as many “friendlies” as in the UAE.
But Morocco doesn’t sit on the strategic Persian Gulf. The UAE does; it has the best deep-water port and the most modern airfields and air training facilities in the Gulf region, and it lets our military make extensive use of them. This is very useful for us, but it’s even more useful for the UAE for geostrategic reasons that have nothing to do with friendliness, and will not change if we reject the Dubai Ports deal (especially if we do it as Bill Bennett and Seth Leibsohn suggest, by sending a back-channel message to the UAE to withdraw its offer, as China withdrew its UNOCAL offer last year).
Americans who worry that this is somehow “unfair” should realize that, with the limited exception of the Jebal Ali manufacturing complex in Dubai, the UAE requires at least 51 percent Emirati ownership of all businesses operating in their country. Still, some Americans will doubtless object that, after all, DPW is not owned by the people of the UAE but by its government, and it is unfair to blame a government for the hostility of its people. There may be some truth to that in countries with multiple parties and a free press, but the UAE is not one of those countries. There has never been an election there, all political parties are illegal, and the press is not free. If the UAE government objected to the anti-American propaganda that fills the Emirati press, that would be the end of that. A journalist who flouted the government’s well-known unwritten rules wouldn’t last five minutes.
We should reject the Dubai Ports deal, not just because it is risky to have a hostile country managing critical parts of our infrastructure, but because the claim that the UAE’s desire to do so is “just business” presents us with a mystery. At the very least, those who make this claim need to explain why the UAE agreed to pay P&O a 70-percent premium over existing share prices to buy the company. If P&O is really worth $6.8 billion, why didn’t any other international shipping company offer anything remotely like that (see also)? Apologists for the deal say the problem is that few privately-owned companies have pockets deep enough to pay that much. Maybe, but DPW is hardly the only deep-pocketed, government-owned international shipping giant, and none of the others made any attempt to outbid DPW either. Apparently, no one else thought they could pay that kind of money to manage our ports and still make a profit. Perhaps DPW knows something no other shipping company does. Then again, it may be that DPW has some other motives for wanting to take over the management of key American ports.