Saket Vora

This column of mine ran in the March 17, 2006 Issue of the Technician, NC State’s school newspaper.

Last week, Dubai Ports World (DPW) relented under vitriolic political opposition to its takeover bid and will divest ownership of its American ports to a U.S. entity. Though this DPW-initiated move saves face for the Bush administration, we must realize who the only winners are: the politicians in Congress, not the American people.

First some background. Dubai Ports World is one of the largest shipping and port operations companies in the world. It is owned by the government of Dubai, one of the seven emirates composing the United Arab Emirates. Two of the 9/11 hijackers carried passports from the UAE (lest we forget, fifteen hijackers were from Saudi Arabia, arguably our closest major Arab ally). In mid-January, DPW finalized the acquisition of Peninsular & Oriental Steam Navigation Company, a British firm that owned and operated six ports in the U.S. The deal stayed under the radar until a Miami company, who was a partner with P&O, hired a lobbyist to protect its business interest. The takeover bid was re-framed as a national security issue with a Arab-country controlling six U.S. ports, and by late January Congress was rustled from its slumber to champion the cause of stopping passage of the deal.

Though the deal was mentioned in business and trade journals weeks before, the mainstream media’s first portrayal of the DPW deal was that of a threat against America. The surface details of the story lend itself towards a typical knee-jerk reaction: how could it possibly be a good idea to let an Arab country control our ports, where only 5% of the cargo is screened? Had the media fulfilled its role of informing the public, more facts and details would be known. The industry of port operations is incredibly globalized, 90% of all container shipping is handled by foreign companies. Foreign companies operating American ports is not without precedent either. The authorities handling the security and customs at the ports would remain the same. The immigration policies would remain the same, with foreign workers from Dubai needing to go through the vetting process for visas. As reported in The Economist, “[t]he United Arab Emirates is a member of America’s Container Security Initiative, which allows American customs officials to inspect cargo in foreign ports before it leaves for America.” Oman is the only other Arab country currently a member of the initiative. Existing problems concerning port security, an issue that desperately needs more attention, would continue to exist with or without DPW taking over P&O’s operations. Instead, media attention was paid to the political drama that was unfolding on Capitol Hill.

Politicians in Congress fed off the public’s ill-informed knee-jerk reaction. Democrats were finally able to gain ground in the coveted issue of ‘national security’, which Republicans have successfully dominated for the past six years. Republicans who were becoming increasingly wary of the administration’s handling of the budget, Iraq, and Katrina (among other things) saw this as the perfect opportunity to distance themselves away from the Bush White House. For some politicians, it was a short-term decision for this November’s mid-terms elections. For others, like Senator Bill Frist, it was a chance to shape a 2008 presidential run. Instead of finding ways to properly fund port security measures, there is isolationist talk against foreign companies. Important lobbying reform that began after the Abramoff scandal has been forgotten, and business analysts are worried about a chill in foreign investments or ‘insourcing’ to the U.S.

I’ll be curious to see the reaction in Congress if the H5N1 avian bird flu were to start spreading in the US and widespread vaccinations were needed. Two of the four leading vaccine providers are based in America, but only one of them is seriously working on a H5N1 vaccine. Far along in development of a vaccine is the French company Sanofi Pasteur, which was contracted by the U.S. Dept. of Health and Human Services last September to produce a stockpile valued at $100 million. The French company runs a vaccine production facility in Pennsylvania. Surely we cannot allow a foreign company to own and operate a facility that plays a vital role in the health security of our country, right America?

Link: Technician Website