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Mar 8, 2006

Bush and the Ports: The Honeymoon Is Over


Wednesday, March 8, 2006

 


When the story broke that the Bush administration had approved a British-owned company's sale of U.S. port operations to one headquartered in the United Arab Emirates, all hell broke loose.

The company at hand, Dubai Ports World, is owned by the United Arab Emirates, so not only would we be handing over operations of our ports to yet another foreign company, but also to a foreign government. The fact that the deal was approved without the legally authorized 45-day investigation normally required when acquisition by a foreign government and security concerns are involved, certainly doesn't help. Then there was President Bush's claim that he knew nothing about the deal until after it had been approved, which wasn't terribly reassuring.

On top of it all, the original report that only six ports were affected by the deal turned out to be misleading. It is in fact 21 ports that are at stake, which would give the United Arab Emirates control over almost every major shipping terminal on the Eastern Seaboard. For some reason, much of the media continues to report the lower figure.

The firestorm over the ports deal has exposed a rift on the right and a political opportunity for the left. On the one hand, you have the Bush administration and loyalists in the Republican Party and conservative media defending the ports deal. On the other, you have Democrats, Republicans, conservatives and liberals all justifiably concerned about a Muslim country, ally or not, having control of 21 U.S. ports in a time of war. According to polls, the majority of Americans fall into the latter category, putting them at odds with the Bush administration.

With this in mind, the accusations of "hypocrisy" and "demagoguery" against Democratic opponents are a bit pointless. Whether they're doing it for partisan reasons or not is immaterial. The president is weak on his right flank, and whoever is smart enough to take advantage of that is likely to succeed. If the administration had not left itself open to criticism on issues such as homeland security and illegal immigration, the Democrats would not have a foothold.

In addition to being politically tone deaf, the Bush administration has reacted to critics with arrogance and dismissiveness. Bush's threat to veto any legislation put forward to stop or delay the ports deal is amazing, considering that he's never once vetoed a bill. Forget any and all spending bills, the president's sole concern seems to be benefiting the United Arab Emirates. Since Dubai World Ports has requested a 45-day investigation to address critics' concerns, Bush's bluff will not be called just yet.

In response to concerns raised by opponents, the Bush administration has pointed out that the Bureau of Customs and Border Protection and the Coast Guard will continue to control port security. However, the Coast Guard has complained of intelligence gaps in trying to determine whether Dubai Ports World might be vulnerable to terrorist operations. While the company itself may be reputable, what's to stop infiltrators from securing jobs and smuggling in weapons of mass destruction?

The Port Authority of New York and New Jersey was so concerned about this possibility that it filed a lawsuit against the U.S. government to block the ports deal. New Jersey filed a similar suit the day before.


Dubai and Sept. 11

While the pros and the cons of the ports deal have been much debated, certain facts remain that should give pause. Troubling links between the United Arab Emirates and Islamic radicalism are among them.

It's been widely reported that along with Saudi Arabia and Pakistan, the United Arab Emirates was one of only three countries to formally recognize the Taliban. But according to a recent article by journalist Paul Sperry, the relationship went much further than that. Dubai acted as banker and travel agent for the repressive regime. This cozy relationship extended to the Taliban's "guest," al-Qaida leader Osama bin Laden. He and the Dubai royal family maintained close ties, with a 1999 visit to one of his camps in Afghanistan courtesy of an official United Arab Emirates airplane.

In fact, Bin Laden used Dubai as a launching pad for the Sept. 11 attacks on the United States. Thirteen of the 19 hijackers entered the United States from Dubai. Two were United Arab Emirates citizens, and one, Marwan al-Shehhi, served in the army. Dubai also became al-Qaida's financial base, with more than $100,000 in funds channeled through its banks.

As for the worry that terrorists might get their hands on weapons of mass destruction, the United Arab Emirates has done its bit in that department as well. Two Dubai companies were involved in shipping illegal nuclear components sold by Pakistan's nuclear scientist Dr. Khan to North Korea, Iran and Libya.

Paul Sperry, author of "Infiltration: How Muslim Spies and Subversives Have Penetrated Washington," also points to a possible conflict of interest involving the Council on American Islamic Relations and the United Arab Emirates. CAIR, which has had five officials convicted of ties to terrorism, has defended the ports deal and accused critics of "Islamophobia." But it just so happens that General Sheik Mohammed Bin Rashid Al-Maktoum, the emir of Dubai and point man for U.S.-based executives of Dubai Ports World, owns the deed to CAIR's headquarters in Washington. One has to wonder if that has just a little something to do with CAIR's endorsement.


Skyscrapers and Repression

Despite the glittering skyscrapers and excessive wealth of the United Arab Emirates, it is a society that has very little in common with our own. According to the State Department, "There are no democratically elected institutions or political parties ... [and] there are no general elections." Freedom of the press does not exist in the United Arab Emirates, nor does unrestricted Internet access. Sunni Islam is the official religion and non-Muslims are prohibited from proselytizing or distributing religious literature to Muslims. Human trafficking involving foreign women used as prostitutes and young boys as camel jockeys is rampant.

While the United Arab Emirates would hardly be the first human rights-compromised ally of the United States, is rewarding such countries with lucrative business deals really the best approach to pushing democratization?

Furthermore, the United Arab Emirates is a participant in the Arab boycott against Israel and refuses to recognize the country. A certificate of origin has to be checked on all imports, lest they come from the Jewish state. When asked about the boycott, Muhammad Rashid a-Din, a staffer at the Dubai Customs Department, stressed that "If a product contained even some components that were made in Israel, and you wanted to import it to Dubai, it would be a problem." The fact that American companies are prohibited by law from cooperating with Arab governments in their attempts to boycott Israel seems to matter little in this case.

State-run media, such as satellite channel al-Arabiya, seem to be more concerned with spreading anti-American and anti-Israel propaganda than with reporting the truth. According to Cliff Kincaid at Accuracy in Media, the Iraqi government ordered al-Arabiya to leave Baghdad in 2003, accusing it of inciting violence against citizens and U.S. troops.


Kincaid also quotes Ali Al-Ahmed, the director of the Institute for Gulf Affairs, who claims that the United Arab Emirates "has been fueling the insurgency in Iraq" by providing sanctuary for "Sunni insurgent supporters and Sunni insurgents." Al-Qaida members have bragged about infiltrating the United Arab Emirates' security apparatus, among other agencies. This is the "valuable partner" President Bush insists has been so helpful in the war on terrorism?


Security vs. Business

Just because a country is an ally does not mean that we have to jeopardize our security. Even supposedly moderate allies in the region, such as Jordan, are hardly pillars of progress beneath the surface. Others, such as Saudi Arabia, are given a free pass because of the United States' energy dependence. Isn't it time we started expecting more from our allies than lip service?

Some have suggested that the Bush family has its own conflicts of interest with the ports deal. CNN's Lou Dobbs reported that United Arab Emirates investors provided funding to an educational software company owned by Neil Bush, the president's brother. But that's the least of it. A series of financial entanglements involving the Bush family, the Carlyle Group and Dubai investment entities owned by the United Arab Emirates are also raising eyebrows.

Now we find that another dubious Dubai deal is on the table. Dubai International Capital wants to buy London-based Doncasters Group, which would put it in charge of plants in Georgia and Connecticut that make components for military aircraft and tank engines. Having learned a thing or two from the ports debacle, the Bush administration has launched a national security investigation of the Dubai-owned company. But much like the ports deal, the investigation is more a delaying tactic than an impediment.

In response to such concerns, a bipartisan group of senators has put forward legislation that would require Congress be given the report from the 45-day review of the United Arab Emirates ports deal as well as final say on the arrangement. Additional changes involving oversight of the Committee on Foreign Investments in the United States, the administration panel that approved the ports deal, and foreign ownership where national security is at risk are also being proposed.

But the fact that such acquisitions are even being considered points to the larger problem of increasing foreign ownership. As it stands, China, Denmark, Japan, South Korea and Singapore have control over terminals in 36 American port cities. And now we're going to add the United Arab Emirates to that list? The strong reaction to the ports deal speaks to a growing dissatisfaction among Americans at the level of foreign ownership, outsourcing and illegal immigration in our country. If that's "protectionist," then so be it.

There's also the small matter of being at war. Despite the politically correct pronouncements of our president, we are currently engaged in a war with elements of the Muslim world. Is simply acknowledging that fact and exercising the appropriate caution really tantamount to the "anti-Arab bigotry" alleged by Bush?

The president's record on homeland security doesn't exactly inspire confidence. In addition to the outsourcing of America's ports, Bush has left the country's southern border largely defenseless, while increasing illegal immigration with guest-worker proposal announcements. The Department of Homeland Security is one massive pork-barrel spending opportunity, with funds going mostly to the wrong people in the wrong places. At the same time, the Bush administration has allowed Saudi oil money to purchase far too much influence in American society, particularly in its educational institutions.

Transnationalism as Usual

Much like previous administrations, the president is simply making the world safe for transnational corporations. It's no coincidence that former presidents Bill Clinton and Jimmy Carter are out pushing the Dubai deal. Administration after administration has brought America to the point it's at today, where everything is for sale to the highest bidder. When President George H.W. Bush introduced the concept of a "new world order," it was a harbinger of things to come.

We have entered the era of transnationalism, otherwise known as globalism, and it is sweeping away national identity in favor of an international marketplace. America is becoming nothing more than a hub for the exchange of money, goods and cheap workers. Concern over this issue spans the political spectrum, including the anti-globalization forces on the left and the protectionists on the right. Each faction is opposed to the outcome, for different reasons.

Many of Bush's constituents have awakened to this reality, and the rumblings of discontent have greatly increased. Adding to a series of disappointments since Bush's re-election in 2004, the ports deal may turn out to be the last straw.

The honeymoon is definitely over.

Cinnamon Stillwell is a San Francisco writer. She can be reached at cinnamonstillwell@yahoo.com



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Posted: Mar 8, 2006 8:53pm
Mar 4, 2006

Gushing Over China, and Exploring the Reality

Submitted by editor4 on March 3, 2006 - 3:45pm.
By Paul McLeary
Source: CJR Daily

Business reporters, and the media in general, have long feared and bowed before the awesome economic potential of the Chinese market.

To be sure, there's plenty to write about. In January, the country's gross domestic product finally surpassed that of Britain and France, making China the world's fourth-largest economy. One month before that, China bumped the United States from its position as the world's top exporter of technology goods.

Those are significant achievements. But the media's coverage of China's phenomenal growth has nonetheless managed to be both breathless and simplistic.

Consider, for example, BusinessWeek's story last August on the "moon shot of an initial public offering" by Chinese Internet search engine Baidu.com. The company's launch price of $27 a share on August 4 rocketed to $154, crushing a five-year record for the best debut on NASDAQ. The article, which carried the flashy headline, "There's More Where Baidu Came From," could barely conceal its glee over the emerging Chinese Internet market.

This seemed to lean a bit towards tabloid journalism given that BW's article itself noted that "of the 10 Chinese tech companies that went public last year, 7 are trading below their offering price."

After reporting the IPO, BusinessWeek, and most other journalists, seem to have lost the thread of the Baidu story. Which is a shame, because every China-watcher knows that the IPOs of Chinese Internet companies always soar to phenomenal heights in the early days, and then quickly return to earth. Baidu's stock began a steady decline three weeks after its IPO, and is now 50 percent off the $153.94 high it hit on the second day of trading.

It suffices to say that business reporters often get a little too excited about the potential of Chinese companies and markets, at the expense of fully recognizing some troubling long-term problems. Moreover, China coverage is unlikely to improve as news organizations decimate their Asian bureaus. BusinessWeek stopped publishing an Asian edition, and maintains only a skeletal staff in the region. And there are many others that are making similar cuts. For example, Time Inc., which until recently maintained a formidable presence in Asia, just retired its bureau chiefs in Beijing and Seoul (along with those in Jerusalem and Moscow).

Instead of being the exception, this is more and more becoming the rule, and as a result there are fewer reporters to cover an increasingly important and complex story. As a measure of the China story's many layers, consider Minxin Pei's article in the March/April issue of Foreign Policy.

She points out that "China may be rising, but no one really knows whether it can fly." Despite the positive predictions of many business writers, the Chinese economy actually rests on pretty shaky ground -- all the more so, given the rampant corruption and theft regularly practiced by the Communist party officials who pull the strings. Pei writes, "Beijing oversees a vast patronage system that secures the loyalty of supporters and allocates privileges to favored groups. The party appoints 81 percent of the chief executives of state-owned enterprises and 56 percent of all senior corporate executives ... In large- and medium-sized state enterprises (ostensibly converted into shareholding companies, some of which are even traded on overseas stock markets), the Communist Party secretaries and the chairmen of the board were the same person about half the time."

Alarming, but hardly beyond imagination. China is nothing if not a grand experiment in blending capitalism and authoritarianism. But journalists tend to whitewash the fact that this experiment has, in Pei's words, "bred a virulent form of crony capitalism, as the ruling elites convert their political power into economic wealth and privilege at the expense of equity and efficiency."

Some of the most corrupt businesses in China are in its banking sector, which regularly dishes out loans to undeserving crony companies. But in a Bloomberg report on Goldman Sachs' possible role in the Industrial & Commerical Bank of China's IPO, the wire merely hinted that there has been some political maneuvering behind the deal. It completely failed to mention the sheer volume of nonperforming bank loans the government-controlled monopoly takes on every year.

In addition to Pei's warnings, an article in today's International Herald Tribune preached caution to those who might overvalue the Chinese market. Author James Ku noted the economy he witnessed while working as a manager at a Shanghai start-up firm was rife with "fraud, deception and general incompetence," and that "some of the world's most experienced businesspeople have ... made the mistake of ignoring basic business principles when chasing China's seemingly limitless potential for profit."

We wonder how many American business people have been burned in China because the media had convinced them that the nation's roads were paved with gold.

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Posted: Mar 4, 2006 2:09pm

 

 
 
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