Insights on the Ports Issue between the US and the UAE: Is the DPW Incident Over?
Richard W. Chaptini
Abstract:
The Dubai Ports World incident surfaced at a political level in the United States because of the perceived security risk; however the root of the problem is a lack of mutual cultural understanding. Attempting to solve this problem in any way other than dealing with the cultural aspect will not address the roots of the problem.
Article:
In January 26, 2006 a ports management political issue surfaced between the United States of America and the United Arab Emirates. Dubai Ports World of the UAE had purchased P&O, a British company that manages six major ports in the US, and the international political arena subsequently witnessed a hot debate in the United States over whether or not the deal should go through. On March 9, 2006, Edward H. Bilkey, DP World's Chief Operating Officer, said in a statement, “Because of the strong relationship between the United Arab Emirates and the United States, and to preserve that relationship ... DP World will transfer fully the US operations of P&O operations North America to a United States entity."
Political leaders on both sides of the deal got involved and issued statements of appeasement and assurance that this incident would not affect the relationship between the people of the two countries. An article posted in the Gulf News newspaper on March 6, 2006 quoted Dr. John Esposito during a talk given to students at the American University of Sharjah as saying, “Statements made by some of the members of Congress on the Dubai Ports World issue are racist.” Such a statement along in contrast to appeasing statements from President Bush and angry statements on the UAE political side show how this issue is mainly a cross cultural one and how it affects the relationship between the people of the two allied countries. After all, racism is anti-cross cultural communication and builds a frame or reference that does not accept others.
The relationship between the United States and UAE (and other Muslim countries) has been wounded by this incident and it will subconsciously affect most political interactions that happen in the future. This is to say that the level of trust is now lower which means communication is more difficult. After all, small incidents like this one build up and lead to larger political impasses.
In an article in Khaleej Times dated February 22, 2006 titled “Terror can’t be raised as an issue against DPW,” the writer (staff reporter) made it clear that this is a cultural issue in his analysis of the problem, stressing that the Dubai based company has nothing to do with security and it only manages the operations at the port. However, the writer differentiated between state policy and personal opinion or action by making an analogy with the Oklahoma City bombing, and that even though American domestic terrorists exploded a bomb, not all Americans are consequently terrorists and should not be punished as such. Umbrella punishments may be a valid form of discipline for small groups of people or institutional discipline, however when group punishment is wantonly applied for no reason, it is the same as ruling like a dictator rules: through fear.
In a famous statement after 9/11, President Bush stated “You are either with us or against us.” If the DPW incident is seen from this angle, the people of UAE and even leaders of this country may perceive that this statement has not been applied properly for the simple fact that the UAE has sided with the US in the war on terror against Al-Qaeda and yet was treated with suspicion by its ally. It was not without enormous risk and high political costs in the Middle East that leaders in the UAE decided on what side they want to be: with the United States. In return, when it came down to details and business interests (very often, national policy and economic interest affect each other), the US blocked the UAE from investing in American ports, citing security reasons.
The implication of the UAE siding with the US in the war on terror is huge at the street level. Those who are emotionally on the side of Al-Qaeda or perceive that the actual war on terror is a war between Muslims and the West now have a propaganda item against UAE policy: Their simple claim is that the government of the UAE wanted to befriend the US and yet was betrayed by its ally. In their opinion, Emirati leaders deserve such a pay off for siding with the United States.
In most parts of the Middle East and Islamic world, every decision, position, understanding or acceptance of a situation is filtered through Islamic beliefs, ethnic affiliation, and national identity. The port issue is and will be no different from any other one life issue, and as such will be looked at through both the screen of Islam and Arab identity. The influence of Islam affects other Muslim populations, who will feel offended by the DPW incident, as well as the Arab world, who will also feel offended as Arabs. In the nation of Islam, any issues that concern a fellow Muslim concern the entire Muslim population. Now that this issue concerns the UAE, a Muslim country, people from the Muslim world will feel concerned and targeted at the same time. Does the US want to encourage such a trend in the Muslim world, or was it looking to build closer rapport with this part of the globe?
Looking at the issue from the other side of the globe in the United States, after 9/11 people felt vulnerable and suspicious of any activity that was unfamiliar. After a terrorist attack in a major city and the normal post traumatic concerns that surfaced among the population, a US citizen would ask ‘Why would an Arab country manage the ports in the US and have control over it?” American policy makers, under the influence of the voters, are pressured to take the attitude of “Better safe than sorry” in international politics for domestic political reasons. The tendency of American politicians is to follow their constituent’s desires and promote their interests more than dictating what is best for their lives. Having said this, policy makers stood up and reflected the trauma Americans had experienced after 9/11. Understandably, it will be a long time before American society will heal from such an enormous wound, and people in the Arab and Muslim world both have to understand the American perception in this matter.
Seen from a Muslim, Arab, and UAE angle, the Emirati concerns and attitudes towards the DPW incident make sense. Seen from an American perspective, their attitude also makes absolute sense. However, the unfortunate result is that the two perspectives did not have a common denominator (or not enough effort was made to find one) and no flexibility was shown which resulted in a dead end for the port issue.
Is the port issue over? Of course not; this was an important interaction between the two countries during a critical phase of the relationship between the West and the Muslim world. The port issue is now part of history and can not be erased from history books. People on both sides will learn lessons from this deal and come to conclusions. Conclusions will always be drawn from a cultural standpoint and not from neutral ground, as this is human nature. So what are the possible repercussions of this incident?
On the economic front: The level of trust between the US and Islamic world, the US and Arab world, and the US and the United Arab Emirates has been impacted, and the issue has been brought up through all media platforms. The first reaction to the US decision was the postponement of the fifth round of free trade agreement talks that was supposed to take place in Abu Dhabi at the end of March 2006 and had begun about a year earlier, in 2005. In purchasing power terminology, the Muslim world has a population of over one billion people and strong purchasing power in some countries, and this incident and other similar incidents will both heighten the level of resistance against American products and hamper the ability of American companies to penetrate Muslim markets. Of course this is not to say that the DPW incident will have all those implications, however events are heading in this general direction and this incident is just one brick laid in a growing wall against America in the Middle East. If, at a strategic level, policies are not changed, attitudes are not moderated and guidelines are not defined on how the two populations will be dealing with each other, the port issue will help grow the gap that already exists between the two different civilizations. The financial implications will be on the following sectors:
Consumer goods in the Muslim world
Investment in the US
Tourism industry in the US from Muslim visitors
US oil industry
When thinking at a macro economic level, the short term is of lesser importance than the mid to long term, where critical thinking has to prevail over reacting and considering only the short term. The United States has lost an investment of over 5 billion US Dollars as a result of the DPW deal gone bad. Such an amount may seem minimal to an economy as large as the US, but what will happen to other Middle Eastern capital investments planned for the United States? The Middle East is a cash-heavy region and the flow of regional capital to the US may slow in favor of other regions of the world as a form of retaliation. In addition, an investment of this size in the United States creates thousands of jobs that have been lost somewhere in the economy. One cannot ignore such a small detail and pretend that the impact will not affect the American national economy, because what seems to be a minor loss may turn into the loss of a major source of income for the national economy.
In the Muslim world, due to the cultural gap with the United States, American aid spending will become harder to get. Technology transfer may slow to the Muslim world as well, with a relationship to the West that is shaky and a level of trust that is declining. The Muslim world buys technology instead of investing in research and development and the region will be impacted by the unwillingness of US corporations to sell them the technology for fear of seeing a deal fall through for political, legal or security reasons. Business leaders will have to think twice before engaging in negotiations with any company from this side of the world; concerned about political and cultural attitudes from all sides.
At the political level this incident will impact the relationship between the US and the UAE and the Muslim and Arab worlds at large. The impact will be perceived in the following areas:
1) Maintenance of a double standard policy in the Middle East: The US is already accused of implementing a double standard policy and this image has to be changed. From a Middle Eastern perspective, both the UAE and the British are part of the same alliance in the War on Terror, and DPW purchased a British company business that was managing six ports in the US. The simple question that will be asked is “Why what was acceptable for a British company unacceptable for an Emirati one?” The first thought that will come to mind in answering this question is that one country is Western and the other is Middle Eastern, which will widen the perceived cultural gap between the West and the Middle East.
2) The feeling of rejection from the US felt in this case by citizens of UAE or the greater Arab and Muslim worlds will have a negative impact. The American administration and politicians often talk about winning the hearts and minds of the people in the Arab and Muslim worlds; however this issue is being widely covered by media in the region and discussed in intellectual circles of the society as a negative event. For example, Dr. John Esposito’s statement in his talk at the American University of Sharja about racism is spreading out in both the media and within intellectual circles. Racism and rejection are two sentiments that are contrary to a strategy of winning hearts and minds and also act to widen the cultural gap between the people of the two societies.
In the global economy, borders are supposed to be more fluid and the world should be seen as one, however such an incident has raised cultural border walls and thickened them in a paradox to the trend of globalization. People on each side of such a deal must learn about each other and understand where the other party stands from a cultural standpoint. Approaching such deals is similar to a marriage agreement where two people have to be side by side looking at the same direction instead of looking at each other through a screen of cultural misunderstanding. When one considers the trend of mergers and acquisitions and joint ventures in the business world, these negotiations are both energy and time consuming and financially expensive regardless of the outcome. As the DPW issue points out, not every attempted merger is finalized with an agreement, and even if finalized may run a great risk of falling through within two or three years for human communication incompetence.
Leaders of the world should understand the importance of human communication and the role it can play in generating positive outcomes in the national psyche and during economic or political international interactions.
The DPW issue cannot be forgotten or ignored; it has to be managed and solved in a proper manner in order to defuse its impact. This is a conflict resolution issue and a relationship building challenge between two societies that have common interests. The Arab world and the US are in a relationship that they can not get away from. The Arab world generates the largest oil production in the world and contains the largest global oil reserves that are strategically vital to the US economy. On the other hand, the Arab world is in need of US technology and scientific research which is vital for its economy and society.
The following course of action is one that we find would work in such a situation:
The incident must be isolated so negative repercussions can end.
A damage assessment has to be conducted on both sides.
A damage control plan must be implemented on both sides.
Leaders on both sides must to be culturally educated so the level of cross cultural communication is adequate.
Such complex deals require the involvement of professional experts in the field of cross cultural communication, negotiation and conflict resolution. Having such experts involved in mediation, assisting in negotiation, or facilitating meetings in a culturally, politically, and managerially adequate manner will result in avoiding much of the damage caused by such an incident. The world is moving at such a speed that international communications require extreme attention to detail with little room for major mistakes.
About the author:
Richard W. Chaptini is President of EITS, Inc. and lectures on cross cultural topics around the country.
June 6, 2006
Copyright © 2006 by EITS, Inc.
