Posted on 03/10/2006 9:18:02 AM PST by Dark Skies
DUBAI, United Arab Emirates - Gulf investors, feeling scorched by what they see as an anti-Arab backlash in the U.S. Congress, will likely be wary of high-profile investments in the United States after the ports controversy with a Dubai company.
Analysts said Friday, however, that with Gulf nations awash in cash from oil profits, the United States remains a tempting market to invest. So instead of retreating, over the longer term, Arab investors and governments may campaign to shore up their image among Americans to ensure their money is welcome.
President Bush said Friday he was worried over the message the fallout of the ports controversy will send to the Arab world. On Thursday, Dubai-based DP World announced that it would give up management of six U.S. ports after an outcry in Congress over security.
In Dubai and elsewhere in the Gulf, the controversy was largely seen as reflecting an anti-Arab bias. DP World's concession was likely to solidify that belief.
"It's a sobering moment," said Eddie O'Sullivan, Dubai-based editorial director of the Middle East Economic Digest. "People are going to have to be much more careful. There's a fear they (members of Congress) may move on to other targets in the Arab world. If it happened once it can happen again."
Investors and businesses in UAE, Kuwait, Qatar and Saudi Arabia reviewing portfolios for U.S. holdings that could spark a similar uproar in Congress, O'Sullivan said.
"I'm sure they will be reviewing their portfolios. Most of them are in dollar-denominated assets. They'll want to see how vulnerable it is to the U.S. Congress," O'Sullivan said. "It'll be more difficult to finalize an investment proposal that involves an American bank or an American asset."
A short-term backlash could follow: Perhaps a government-owned company will favor European or Asian suppliers over American ones in the future.
Few observers believe it will torpedo recent orders by two UAE airlines of Boeing passenger jets. But Chicago-based Boeing Co. may have to look outside the Gulf for future deals, said Youssef M. Ibrahim, managing director of Dubai-based risk consultancy Strategic Energy Investment Group.
"The next deal they will do with Airbus," the European aircraft consortium, Ibrahim said. "Dubai's ability to react is constrained. You can't punish America much if you are so small."
Last year, Dubai companies invested $5.5 billion in the West, much of that in the United States. In the next five years, the six Gulf countries will have a half-trillion dollars in assets to invest.
They may be more disposed to look to Europe or Asia for investment now - but in the end, the amount of cash is so huge that only U.S. assets can soak it up, O'Sullivan said.
"The United States represents 50 percent of the world's economic market, 50 percent of the world's consumption and 50 percent of the assets in which you can put money," Ibrahim said. "At the end of the day, there aren't too many places where you can invest that kind of cash overflow."
The Emirates is unlikely to retaliate strongly for the slight, for instance by blocking the U.S. Navy and Air Force access to critical bases here, a prospect that has worried top U.S. military leaders.
Governments of other cash-rich Gulf countries like Kuwait, Qatar and Saudi Arabia will be loath to ruffle relations with the United States, analysts said.
Shehab Gergash, chief executive of Al-Daman, a Dubai-based investment bank, said he had seen no drop in investor interest in American products or securities.
"Time will tell whether it has any effect" on Arab investment in the States or Arab purchases of U.S. goods, Gergash said.
Many here blame the controversy on American politicians for playing to a deepening anti-Arab bias in the United States. Dubai-based Gulf News said U.S. Democrats were trying to "score political points" against the Bush administration on national security by ignoring the facts of the case.
"It is deemed better to jump on the bandwagon of anti-Arab, anti-Middle East, anti-Muslim tirade that has been popular since the 9/11 attacks," the paper's editorial page said Friday.
Ibrahim said the UAE may move to boost its image among Americans who fear closer ties with the Middle East. It may embark on opinion-shaping ventures that mimic Israel's deft public relations maneuvers: hosting visits by members of Congress, business leaders and chiefs of unions like the Teamsters, which opposed the deal, Ibrahim said.
"They should've invited these people here and shown them around, so they had friends who would defend them instead of attacking them without knowing anything about Dubai," Ibrahim said.
But how will we ever replace that hundredth of a percent of economic activity? We're DOOMED, I tell ya, DOOMED!
LOL, I hope those politicians jobs were worth it.
These countries should be charged for any protection they request.
The Emirates Group airline will decide later this year whether it will buy Boeing’s new 787 Dreamliner or its competitor, Airbus A350. The airline last fall placed an order worth $9.7 billion for 42 Boeing 777 aircraft, making Dubai Boeing’s largest 777 customer. Dubai in mid-February also established the Dubai Aerospace Enterprise, a $15 billion investment to create a company that will lease planes, develop airports and make aircraft parts to tap into growing demand for air travel in the Middle East and Asia.
Reconsider this: we don't like you, we have old men in suits insult you. Notice the absence of hijackers, suicide bombers, IEDs, RPGs, mortars, rockets, missiles, car bombs, truck bombs, shoe bombs... Heck, we don't even throw any cartoon bombs.
Now for something completely different:
Why don't these countries use the money to invest in their OWN countries? They could launch spending programs to build better roads, housing, schools, infrastructure. They could give back the money to their people so they could buy TVs and stereos and new cars.
Why do they feel they have to send all the money to outside investments?
As they should, Congress only likes the ChiComs to run our ports and invest in our infrastructure.
How can this be?
Simple we just sent a message to the entire Arab world "Ragheads need not apply." I hope all the anti ports Know-Nothings are really happy and pleased with themselves. Yes they've saved America from having the UAE from managing some terminals.
tell me just how would you react if someone you thought was being your friend/ally told you to go F yourself?
Get ready for blowback
Yep a great day for America.
If they buy Airbust instead of Boeing they will do themselves far more damage than they do us. Either way, our national security should not be subservient to Boeing's business interests. Boeing will do just fine no matter what the UAE chooses to do.
I'd probably deny them, say, a ports deal, if they repeatedly told us to go F ourselves, as, by amazing coincidence, the UAE does every time it casts a vote in the UN.
The UAE doesnt have a ton of oil. They only recieve 10 percent of their revenues from oil. They have tied their economy to the health of Western business. Thats what we have been saying. Again the ignorance of the UAE and ignoring advice from people that live there, the military, and American business interest have led us to make a mistake. I am not sure why people refused to listen to the most knowledgeable sources. I think I know the answer but I dont wish to contemplate it that much.
However, now is time to repair the damage. I would suggest that the first thing to do is not treat this as a some sort of how the Romans used to treat ancient Egypt. They are a soverign Govt and friend.
Haha You're right, the sky is falling....we're doooooooomed!!!!
Thats the whole point, this had nothing to do with national security.
I finally saw the great study that everyone was referencing when talking about these UN votes a couple of days ago. It was based on 12 votes that this organization had picked. Guess what our European allies voted with us according to that only 8 percent of the time. It put that whole issue in a different light after I saw it.
Americans have historically treated these tinhorns like the crap they are.
Now we have people running around saying, "Oh the emirs are going to be soooo angry about this!"
Now is that Xenophobia, Racism or what?
Again the ignorance of the UAE and ignoring advice from people that live there, the military, and American business interest have led us to make a mistake.
I am not sure why people refused to listen to the most knowledgeable sources. I think I know the answer but I dont wish to contemplate it that much.
You answered your own question. Don't confuse me with the facts, I might have to admit I'm wrong and we can't have that.
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