By Robert J. Samuelson (THE WASHINGTON POST, 14/03/06):
The idea of letting an Arab-owned company, Dubai Ports World, run container terminals at some major U.S. ports struck many Americans as an absurdity. Why not just turn control over to al-Qaeda? In late February a CBS News poll found that 70 percent of respondents were against the deal and only 21 percent in favor. The company's withdrawal last week can be seen as a triumph of public opinion. Or it can be acknowledged for what it is: a major defeat for the United States, driven by self-indulgent politicians of both parties who enthusiastically fanned public fears.
Leadership in a democratic society requires a willingness and ability to challenge and change public opinion when it is based on misinformation, no information, prejudice or stupidity -- as it was in this case. There never was a genuine security problem. The Dubai company wouldn't have "taken over" the U.S. ports. It simply would have run some terminals. Cargo would still have been handled by American, unionized longshoremen. The Coast Guard and the U.S. Customs and Border Protection agency would still have been responsible for port security.
To be sure, the 9 million or so containers arriving annually in the United States do pose security threats. In congressional testimony, Stephen Flynn of the Council on Foreign Relations outlined one danger: a truck driver, sympathetic to al-Qaeda, picks up a container of sneakers in Indonesia; on the way to the port, he diverts the trucks so terrorists can load the container with a "dirty" nuclear device; and the container is shipped to Chicago, where it's detonated. Flynn urged more worldwide electronic and radiation scanning of containers at ports of departure. He estimated that screening would require about a $20 fee per container.
"We need to know what's in the box more than we need to know who is moving them around a container yard," Flynn testified. Both Flynn and James Jay Carafano of the Heritage Foundation testified that Congress had underfunded the Coast Guard. No matter. It was a free-for-all on Capitol Hill. Democratic Sens. Hillary Rodham Clinton and Charles Schumer of New York led the fearmongering. Republicans joined the chorus, some frightened of being cast as "soft" on terrorism. In a typical comment, House Speaker Dennis Hastert said: "We want to protect the American people."
As political theater, the posturing may be harmless. But all the grandstanding -- precisely because the criticisms were overblown -- damages American interests. It's a public relations disaster in the Middle East. The United Arab Emirates -- of which Dubai is a part -- has been a strong American ally, permitting the use of its ports and airfields for U.S. ships and military aircraft. Dubai's ruler, Sheik Mohammad bin Rashid al-Maktoum, is trying to integrate his city-state into the world economy. There's been a building boom of offices, malls and luxury hotels. Dubai has also gone on a global investment binge, buying the Essex House in New York, Madame Tussauds wax museum in London and (of course) the port operations of Britain's Peninsular & Oriental Steam Navigation Co.
If this isn't what we want from Arab countries, what do we want? Much bitterness is reported in Dubai, especially among those who are pro-Western. They blame racism. That's understandable and perhaps correct. A Post poll last week found that 46 percent of Americans had a negative view of Islam -- a crude proxy for Arabs. (Yes, not all Arabs are Muslim, and not all Muslims are Arabs. But the poll is still suggestive of American opinion about Arabs.) The ports furor also hurts the United States in another way. It weakens confidence in the dollar as the major global currency. The U.S. trade deficit now spews more than $700 billion into the world annually. To some extent, global economic stability depends on foreigners' keeping most of those dollars. Mass dollar sales could trigger turmoil on the world's currency, stock and bond markets.
People outside the United States hold dollars because they believe the currency maintains its value and offers a wide menu of investment choices. The message from Congress is that the menu is shorter than people thought. Once any investment is stigmatized -- rightly or wrongly -- as a "security problem," Congress may act against foreigners.
Every country has the right to protect its security interests. But those interests must be defined coherently and not simply as the random expression of political expediency. That's what happened here, as it did last year when Congress pressured a Chinese oil company (China National Offshore Oil Corp.) to withdraw its bid for a U.S. firm (Unocal Corp.). The more this process continues, the more it corrodes confidence in the dollar.
It will be said that other countries are equally nationalistic and political, so their currencies aren't realistic alternatives to the dollar. Not true. If we imitate the French or Malaysians, the dollar will have compromised its special status. The irony is that the people who are creating all these risks are the very same members of Congress who claim to be protecting us.