The Dubai divide

December 13, 2006

The sale of Dubai Ports World's U.S. assets to New York-based AIG Global Investment Group brings to a close a rather sad chapter for this country and particularly for the shipping community. DP World divested itself of operations in Baltimore, New York, Miami and elsewhere with far more grace and diplomacy than the shameful circumstances warranted. The company's chief executive officer may politely describe last winter's political uproar as a "difficult experience," but it was something far worse - irrational and potentially self-destructive fear-mongering that tapped Americans' post-9/11 distrust of all things Arab.

The matter started out reasonably enough. When DP World purchased London-based Peninsular & Oriental Steam Navigation Co., or P&O Ports, the United Arab Emirates company secured significant U.S. assets. In Baltimore and elsewhere, P&O concessions mainly involved the supervision of Americans who load and unload container ships. The federal agency that oversees foreign investment in the U.S. saw no threat to domestic interests and approved the transaction. But the matter soon ran aground in Congress, where Democrats seized upon the sale to prove their get-tough foreign policy credentials and many Republicans (not wishing to be outflanked) soon joined them.

How ridiculous was this? Politicians were pointing fingers at one of the largest port management companies in the world and one that many other Western nations have happily permitted to invest in their countries for years. At the same time, many genuine concerns over U.S. port security - even something so simple as creating a standard ID system for port workers - have been neglected or woefully slow to get on track. How ironic that DP World can't be trusted with stevedoring in the U.S. but was recently given the potentially sensitive task of screening U.S.-bound cargo for nuclear weapons under a pilot Department of Homeland Security program.

The state of U.S. port security remains a concern, but it has little to do with whether DP World runs a terminal or manages a port. Despite recent congressional actions, port security is still badly underfunded, particularly compared with passenger aviation, and may represent the country's most glaring vulnerability. That cause is not helped when Americans are led to chase phantom threats - and are blinded to the difference between friend and foe.

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