Aubyn Hill
DUBAI IS a most amazing city. A long time ago, it produced oil but that soon ran out and, today, it is part of the United Arab Emirates which is a loose federation of sheikhdoms that is collectively rich in oil.
Maybe two decades ago, the then very young Sheikh Mohammed bin Rashid decided that Dubai was going to become the Hong Kong of the Middle East in terms of its free market capitalism approach and he also decided that Dubai would possess a kind of cosmopolitan élan and sophistication that would be hard to beat anywhere else in the world.
Dubai is tiny and lacks oil, but has a leader of great vision and execution in Sheikh Mohammed. Most any objective observer would have to concede that Sheikh Mohammed bin Rashid has been successful in reaching his clearly stated objective.
SUCCEED IN OBJECTIVE
Today, Dubai is not only a really wonderful place to visit in order to see its world-class hotels (one or two a little bit over the top), its outstanding attractions including a genuine ski facility in the middle of the desert, its hosting of the annual ATP tennis tournament which concluded last week and saw Raphael Nadal of Spain beat the number one-seeded player in the world, Roger Federer of Switzerland, but its restaurants, cafés and entertainment are absolutely very first world.
Having lived in the Arab Gulf region for over 20 years, I have had the privilege of watching Dubai grow and I have stayed in some of its really outstanding hotel facilities.
But today the very tiny state of Dubai is also at the centre of a controversy that is testing America's commitment to the principles of globalisation and free-enterprise capitalism.
It was good to see United States President George W. Bush standing firmly behind these American principles even if the loud cacophony from various chest-beating 'patriots' in Congress who represent a variety of special interests, served to persuade the Emiratees who own Dubai Ports World (DPW) to exclude the six controversial ports from the deal to purchase the British firm P&O which currently manages these six important U.S. ports. The six ports are New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.
GLOBALISATION AND XENOPHOBIA
Many members of both houses of the U.S. Congress - from both the Republican (President Bush's party) and the opposition Democrats - have taken strong and sometimes very caustic positions against DPW getting control of these six ports.
Most strident have been the two senators from New York, Chuck Schumer and Hillary Clinton. Along with Senator Barbara Boxer of California, and others, they tend to forget that the stakes are not small for Americans in this international quarrel. Americans own US$2.9 trillion worth of shares in foreign companies through mutual funds, pension funds and direct invest-ments.
In 2005 U.S. exports totalled US$1.12 trillion or roughly 10 per cent of the country's gross domestic product, according to Commerce Department data.
Just as important, foreign direct investment (FDI) in the U.S. exceeded US$1.5 trillion in 2004, the most recent year for which statistics were available from the Commerce Department (Jamaica's FDI total in 2003 was in excess of US$750 million - in the scheme of things quite small but still by far the largest recipient of FDI in the English-speaking Caribbean in that year).
Of the U.S. amount, roughly two-thirds came from Europe, compared with US$17.8 billion, or about one per cent from the Middle East.
The Dubai-based airline Emirates placed a US$9.7 billion order for large Boeing 777 planes in November last year.
A spokesperson for DPW said that the order for the 42 Boeing company 777 aircraft is a separate issue from DPW.
Another airline is also said to be contemplating the purchases of planes either from Chicago-based Boeing or its European competitor European Airbus. It will be interesting to see who gets those new deals.
Naturally, companies like Boeing will work hard with their contacts in the region to patch things up. However, a former Bush administration economist and American Enterprise Institute Fellow, Phillip Swagel, says the Gulf states should send emissaries to meet with outspoken port deal opponents like New York Senators Chuck Schumer and Hillary Clinton and explain to them the economic power of the Gulf region.
Ambitious and politically powerful politicians such as Schumer and Clinton who are opposed to the idea that DPW should be able to buy the British company that operates several U.S. ports wrap their arguments and positions tightly in and under the U.S. flag; national security; the rights of Congress; and the quality of decision making about foreign investment.
The truth is that their position is much closer to personal political ambition and plain old xenophobia.
When the U.S. and Europe were shaping the political and economic world after the Second World War, they couldn't see the time in the 1970s and 1980s when countries like Japan would demand to join the exclusive European-American club.
The G7 economic club of rich countries came into being and Russia eventually had to be accommodated. China kept knocking at the door and had to be allowed into the WTO.
