Under Pressure, Dubai Drops Port Deal

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Giorgi Murusidze
Dr. Paul Wilson
MBA 580.60
November 2, 2010
Under Pressure, Dubai Drops Port Deal
The Dubai Port World controversy began in February 2006 and rose to prominence as a national security debate in the United States. At issue was the sale of port management businesses in six major U.S. seaports to a company based in the United Arab Emirates, and whether such a sale would compromise port security. The controversy pertained to management contracts of six major United States ports. The purchaser was DP World, a state-owned company in the U.A.E. The contracts had already been foreign-owned, by Peninsular and Oriental Steam Navigation Company (P&O), a British firm taken over by DPW, completed in March 2006. Although the sale was approved by the executive branch of the United States Government, various United States political figures argued that the takeover would compromise U.S. port security. After pressure, Dubai Port World dropped the deal (“Under Pressure” ¶1). The ruler of Dubai, Sheikh Mohammed bin Rashid al Maktoum is also the prime minister of the United Arab Emirates. The decision made by Mohammed to withdraw the company was political. DPW is a state owned company. Therefore, one can see that here relationship was directly between home government and host government. The first factor that played in the reversal of the ports deal was safety of USA from terrorist attacks. After the September 11, 2001 attacks, foreign investments from the Muslim countries were directly or obliquely considered as dangerous because there were some possibilities that through these investments some dangerous materials and terrorists could enter. However, DPW operates in many countries, and it has a totally clear reputation. Moreover, after 9/11, United Arabic Emirates had allied with the U.S. in the global war on terror. A second critical element could be support of some US companies that had interest to obtain these strategic business...
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