UNITED STATES
Of Ports and Patriotism
W
Economic and Political Weekly March 18, 2006
a Chinese state company, CNOOC dropped its aggressive bid to acquire Unocal in July of last year for the same reason. The company was finally sold to Chevron. Similar misgivings about the reliability of foreign suppliers bedevil acquisitions between member states of the EU as well. France passed, last year, a statute that would prevent foreign takeovers in 11 sectors that it deems of strategic value. Spain hurriedly passed a law allowing regulators to veto foreign takeovers of strategic utilities when it became clear that a German company, E.On, had bested a hostile offer made by the domestic contender, Gas Natural, for Spanish power company Endesa. The implementation of the EU takeover code, on the drawing board for 14 years, has also run into rough weather with some member-states refusing to apply key provisions that would make it harder for companies to fend off hostile bids.
The opposition in Luxembourg to Mittal Steel’s hostile bid for the world’s second largest steel maker Arcelor, found a mention in prime minister Manmohan Singh’s talks with French president Jacques Chirac recently in New Delhi. It might be self-evident then to state that nationalism is intricately wound up with the economic sphere. The latter is inscribed not only with the collective aspirations of a people – in India this takes the form of a self-congratulatory discourse of “arrival” – but also becomes the terrain where the theatre of nation is itself conducted, and where both ideological and political battles are fought. At the same time, the repeated incursions of business interests tend to collide with and destabilise that very “national space”. Foreign takeovers then, especially of industries considered to be of national or public importance, tend to rouse fierce passions and often lend themselves to some impressive political acrobats in the host countries. Whether the concerns are justified or not – and there can be consequences when the outcomes materially affect people – the debates around the issue are carried out in a rarefied atmosphere that often has little to do with reality. The opposition in the present US case goes beyond what could be termed loosely as “economic nationalism”, and seems rooted in the popular mistrust of Arabs, and countries, who are perceived to be involved in terrorist activities and networks inimical to America’s interests. Implicit also is the categorisation of Arabs into one monolithic (and prejudicial) category, with little regard for the specificity of politics or history.
For the Bush administration, the controversy over DP World came at a particularly bad time – the worsening situation in Iraq, the controversy over the president’s authorisation of electronic surveillance without a warrant and failure to act decisively in Hurricane Katrina in spite of prior intelligence about possible damage. Bush’s approval ratings have fallen to an all-time low of 34 per cent since he assumed the presidency in 2001 and support for the war on terror has waned. Republican legislators, who have given the president something of free rein since he first took office, virtually rebelled against the White House in an effort to regain the political ground on “security issues” that they seemed to be ceding to the Democrats, who have vociferously opposed the deal. Concerns about the mid-term elections coming up in November have no doubt lent an urgency to the calculations. Even the threat of a presidential veto did not prevent the US Congress from voting in favour of legislation barring the port takeover, and in a face-saving exercise the emir of Dubai announced the decision to divest DP Ports of its US operations just hours before the Senate went to vote.
The port deal has, in the end, fallen victim to the same “security” plank, and the gross stereotypes about the Arab world, that Bush has been so effective in erecting. Ironically, Jebel Ali, the port run by the very same DP World in the UAE, continues to be a vital stop in conduct of the Iraq war and host to a number of “sensitive” US warships in the region.
EPWEconomic and Political Weekly March 18, 2006
