DUBAI/BASEL,
March 13, 2006 (IslamOnline.net & News Agencies) – Amid
speculations of impacts on future Arab investment decisions in the US,
the top bankers in the United Arab Emirates and Saudi Arabia blasted
American double-standards in handling a deal allowing a Dubai-owned
company to run six US ports.
"It
is against the principles of international trade ... which the US was
instrumental in making," Reuters quoted Sultan Nasser al-Suweidi,
the governor of the UAE central bank, as saying Sunday, March 12.
"They
(Americans) are contravening their own principles in this
respect," he maintained.
The
comments were the first from a senior UAE official since state-owned
Dubai Ports announced on Thursday, March 9, that it would transfer
operation of six US ports to a US entity.
A
6.8-billion-dollar deal reached on February 13, allows Dubai Ports
World to operate major ports in New York, New Jersey, Baltimore, New
Orleans, Miami and Philadelphia.
A
number of US lawmakers, responding to an outcry by right-wing media
outlets and talk radio shows, had fiercely opposed the deal on
security grounds.
This
also drew criticism from Hamad Saud al-Sayyari, the governor of the
Saudi Arabian Monetary Authority.
"I
don't think it's helpful. Many people are disappointed that it is
being politicized," he told Reuters on the sidelines of a central
bankers meeting at the Bank for International Settlements in the Swiss
city of Basel.
"It
is protectionism or discrimination? It is OK for US companies to buy
everywhere but it is not okay for other companies to buy the US?"
Washington
has proposed a Middle East Free Trade Area (MEFTA), which would link
22 Arab nations, Israel and the United States by 2013.
Repercussions
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"It
is protectionism or discrimination?" Sayyari asked.
|
|
The
governor of the UAE central bank anticipated future repercussions.
"The
American side that opposed the deal mixed economic and investment
matters with issues of security and politics and this is the wrong
approach and it will hurt free trade and international
investment."
He
said the controversy could negatively affect investment opportunities
in the US as well as business ties between Washington and Dubai.
"Investors
are going to re-think and look at future investments in the US from a
new perspective."
Though
he made no specific reference to Arab investment, Suweidi's remarks
underscored growing concern of a backlash among Gulf Arab investors.
US
President George W. Bush, who backed the DPW deal, said the collapse
of the deal could send a wrong message to the US allies.
"I'm
concerned about a broader message this issue could send to our friends
and allies in the world, particularly in the Middle East," he
said.
Governments
in the world's biggest oil exporting region are diversifying away from
US assets, as record oil prices drive up cash available for foreign
investment by about $180 billion a year -- about 16 percent of the
external funding needed to cover the US current account deficit.
Reassessing
Ties
Suweidi
said ties between the UAE and the US should also be reassessed after
the recent furor.
"Trade
and investment relations with the United States must now be viewed
from a new perspective," he said.
Without
making a link to the ports affair, Suweidi said the central bank was
looking to convert up to 10 percent of its foreign exchange reserves
from dollars into euros -- double the target the bank had previously
set.
"Yes
it's an increase. The euro will become more attractive definitely and
once it becomes more attractive the decision will be to shift but in a
reasonable way," Suweidi said.
UAE
central bank foreign reserves -- estimated at $23 billion in December
-- are held virtually entirely in dollars.
Free
trade talks between the United States and the Arab country were
postponed on Friday, March 10.
However,
UAE officials said the delay had nothing to do with the ports
controversy.
