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March 05, 2006
Bedfellows & Commerce: Israel's Zim Lines Supports DPW (Updated)
Sadly my work is distracting me from the fun of the ongoing Bigotted Know Nothing Nativist Ignoramus Mob Madness surrounding DPW's takeover of UK's P&O and the incidental acquisition of the operating leases for port operations at six major US ports (although in the UK and globally sanity has prevailed*), I wanted to augment my dear friend and colleague, Secret Dubai's post on Israeli support for Dubai and DPW with specific reference to the Israeli shipping line Zim's statement of support; I should say it comes as no surprise to anyone with experience in the region that some Israelis would step forward on this, even in a politically delicate situation - not so oddly it is the moderates on all sides trying to do business that know each other.
Down to business, the Chair of ZIM Integrated Shipping Services Ltd, Idan Ofer wrote to the US Congress:
"As an Israeli company, security is of the utmost importance to us and we require rigorous security measures from terminal operators in every country in which we operate, but especially in Arab countries. And we are very comfortable calling at DP World's Dubai ports"
(Also see this article for further details)
As The Guardian arty notes, in reality behind the scenes the Gulf and indeed most Arab and Muslim states happily do business with Israel, and in general fairly openly. Indeed, it is a source of immense irritation for the hardliners and especially the hard-core Islamists. Now, would it be better if the ridiculously counter-productive boycott were ended? Yes. It is an issue that is likely to get demagogued for little practical result - and before the pious posturing begins, think about the situation in the USA.
However, after the pious nonsense about the cartoons situ, perhaps the average Western commentator might step back and look at the utterly irrational, usually utterly mendacious jihad against DPW for the sole cause of the ethnicity of its major shareholders (I for one do not buy the transparent and feeble excuse of the "Government Owned Firm" given Chinese and other Asian government firms more or less happily running terminals on the West Coast of the US of A) and ask, well, what was that you were writing about the primitive state illustrated by irrational hatred, prejudice, and fear-mongering for political gain? Of course that Americans are a bit too fat and lazy to actually get out and protest (they can't bloody walk to the nearest corner shop in my experience), and prefer to blither on online doesn't change the situ. Of course, no deaths as of yet, that's true. Mark up a positive to sedentariness.
Finally, as aside, I would draw attention to a fine FT article on Arabs growing wary of the US, and in particular this paragraph:
US companies in the region are also worried they may be penalised at a time that Arab states, flush with petrodollars, have initiated huge infrastructure projects. A group of US businesses from the Gulf took out an advertisement in the Capitol Hill newspaper Roll Call this week expressing solidarity with DP World. ..... That concern seems to have some foundation, with government officials in the region indignant that DP World has been singled out for scrutiny because of its Arab origins. One senior official in Qatar, which like the UAE is a strong ally of the US, said the backlash in Congress "had raised a lot of questions". These included the possibility that American companies investing in the region might face the same kind of scrutiny as DP World in the US.
I note this as in a recent conference call with Arab, American and other callers that I participated in regarding investment activity, the DPW issue came up. We all know each other, and the general consensus in a frank conversation was that this is not a good time to launch anything for Arab investment flowing US-way. However, a great time to think about MENA region vehicles to capture the "well fuck the racist bastards" money. Or more rationally the "well, what happens if some ridiculous demogogue links me to X, am I going to get my equity frozen."
Real and legit fears.
BTW, in closing, an ironic statement from The Guardian arty: "We should not be rewarding companies that support discrimination against our key strategic ally,'' Sen. John Kerry said during the Senate Commerce Committee hearing."
My understanding from informed sources is that people in Kerry's campaign were responsible for the initial advice to DPW re the American side of the transaction. Perhaps the American Right's questioning of the competence of his team was well placed. As for Kerry, Clinton, etc, well I guess pandering to know-nothingism is a good deal.
* - Of note in re the UK suit brought by the nasty little American firm, the Judges rebuked Eller & Co. and noted they already were at legal war with P&O, rather making their little legal jihad smell a bit
PS: I would be remiss not to highlight this amusing and yet brilliantly accurate comment in New Month Open Discussion to a ignoramus blithering on about his fears re DPW, starting with a choice quote from the ignoramus in bold:
The idea that port operations and security are separate is laughable on its face.
And yet, true. Your vigorous hand-waiving indicates that you have no idea how this works and, worse, have made no effort find out how this works by perusing some of the information on this very site.
The USG handles security. It defines the security procedures and see that they are carried out. The people who actually load and unload cargo at the ports are unionized American workers. The people who supervise them will be the same people who supervise them now. The people who supervise the people who supervise will also be the same people who supervise them now.
At some point up the organizational hierarchy, the evil Dubains will get involved. They will be doing such critical things as recommending infrastructure investments and promulgating procedures for adopting RF tags for cargo tracking, i.e., high-level management functions. To repeat myself, what are you afraid of, that DPW is going to introduce an ISO 9001 procedure for smuggling WMDs?
In sum, your theory is that, somehow, a handful of very senior executives, who happen to be from Dubai, are going to conspire with a bunch of British executives who are going to conspire with a bunch of American executives who are going to conspire with a bunch of unionized American workers who are going to either conspire with, bribe or evade the U.S. Coast Guard and various homeland security officers to smuggle nuclear weapons into Peoria. Is that about right?
Now, frankly, al-Qaeda could use some ISO-9001 (2002) compliant procedures...
Posted by The Lounsbury at March 5, 2006 03:57 PM
Filed Under: Business, Private
, EU Foreign Policy
, Economic Development
, Economic Policy
, Foreign Policy & MENA
, Gulf
, Islam General
, MENA Region General
, Op-Ed
, US Foreign Policy
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Comments
I look forward to some really serious entertainment as this farce gets into Act III. Will Hillary openly break with Bill? Will Kerry suddenly backtrack? Will the liberals who decided to agree with the likes of Michelle Malkin figure out that maybe, just maybe, agreeing with her is actually a bad idea? And why in heaven's name didn't they figure this out in the first place?
So much stupidity, and so much time to enjoy it all.
PS: I saw an interview with someone from the International Longshoreman's Association, and he was actually nonchalant about the deal, although I've seen longshoremen out there protesting against this deal on the news.
Posted by: pantom at March 5, 2006 07:45 PM
Now, frankly, al-Qaeda could use some ISO-9001 (2002) compliant procedures...
L, you never fail to make me smile. ISO compliance is a subject near and dear to my heart.
Pantom: sounds like you've got quite the soap opera figured out! perhaps you should try to sell it to someone in hollywood
Posted by: drdougfir
at March 5, 2006 10:11 PM
Now, would it be better if the ridiculously counter-productive boycott were ended? Yes.
I'd be interested in knowing why you think it's counter-productive L. I understand it's not correctly enforced (to put it midly). But, if something isn't done correctly, does it mean it shouldn't be done at all? Or is it something else?
Posted by: Shaheen at March 6, 2006 02:16 AM
The boycott is a farce.
First, given the economies of the region, the Arabs boycotting Israel is ridiculous. It's like me personally boycotting Russia. A naively useless gesture.
Perhaps in 48 it made a bit of sense - it failed but it might have been worth it then, even on the purely symbolic level.
Now, and indeed since the 1980s at least, there is no economic point. The Arab boycott imposes more inconvenience and pain on the Arabs than it does on Israel, which visibly has (leaving aside the issue of massive subsidies to its military spending) a far, far better economy than any of its neighbors. This especially after the liberalisation of the Israeli economy and the abandonment of their pure socialist/commundard model.
In general, few global companies are not going to do business with Israel because the basket-case economies / governments of the Arabs are going to pout and whinge on about it (this even if the boycott was being fully adhered to). Economically or business-wise with few exceptions it's a no brainer.
Second, on a symbolic level, globally, the boycott is a loser. Again, once upon a time it might have been not bad politics, but now it simply plays into the crazy Arabs stereotype.
So, you have a policy that makes zero sense in terms of impact on its intended target, only hurts yourself in the areas of trade and commerce (or hurts you much, much more than the intended target) and makes you look bad, globally, because your intended target is faaaaaaaaaaar and away better at PR than you are. Indeed because your side is possibly the most incompetent bunch of boobs in the PR realm this side of ... Oh say the the Khmer Rouge.
Well, maybe not that bad, but you get the point.
So, do you continue hitting yourself in the nose with hammer, or do you step back and say, what can I do now?
Posted by: The Lounsbury at March 6, 2006 01:19 PM
First, given the economies of the region, the Arabs boycotting Israel is ridiculous. It's like me personally boycotting Russia. A naively useless gesture.
Not necessarily. I know a lot of Israelis who would love to go open about it so they can multiply the initiatives, or don't go at all because it's too much of a headache (granted, it's not the boycott per se, as much as the general situation of "non-acceptedness" by most Arabs though).
Now, and indeed since the 1980s at least, there is no economic point.
I disagree. It isn't enforced, and as you put it correctly, Arab economies are a joke, true. But it definitely has a strong psychological effect that prevents them from increasing their business in the region tenfold. What is it that Israelis have that Arabs can't find elsewhere, at the same price or cheaper?
The Arab boycott imposes more inconvenience and pain on the Arabs than it does on Israel
I'm not sure. Prevents Arab from accessing the Israeli market? They couldn't even without a boycott anyway. Besides, there are many much more important markets that Arab could conquer (if they were in such a logic that is) before Israel becomes the last remaining spot. OTOH, Israel which has a far better economy indeed, and is much better prepared in nearly every field, from technology to management processes could definitely multiply its market share in the region if it felt totally free.
In general, few global companies are not going to do business with Israel because the basket-case economies / governments of the Arabs are going to pout and whinge on about it (this even if the boycott was being fully adhered to). Economically or business-wise with few exceptions it's a no brainer.
True, but in France or in Canada for example, 80% of employment is created by small and medium businnesses. IF, and when adhered to, the boycott can penalize those. Of course, that's only theoretical today. But it isn't because something isn't implemented that it should be abandonned. If it's the right thing, its full implemetation should be sought.
it simply plays into the crazy Arabs stereotype
Most people aren't even aware of it. So whether it plays into that stereotype or not, would probably depend on how the PR that surrounds it is done when it awareness of it grows.
Indeed because your side is possibly the most incompetent bunch of boobs in the PR realm this side of ... Oh say the the Khmer Rouge.
We fully agree on this:)
So, do you continue hitting yourself in the nose with hammer, or do you step back and say, what can I do now?
What can we do now? I would say come out of the pre-industrial age. Making sure the boycott is efficient can be done in parallel though, I don't see why both couldn't go together. Here's where I'd join you: it seems obvious to me that the boycott's success is strongly related to Arabs jumping into our era from the political and economic point of view. Absent this, the boycott is not counter-productive. It's just almost nothing.
Posted by: Shaheen at March 6, 2006 09:41 PM
Shaheen Bek:
Uselessness of the Boycott
Not necessarily. I know a lot of Israelis who would love to go open about it so they can multiply the initiatives, or don't go at all because it's too much of a headache (granted, it's not the boycott per se, as much as the general situation of "non-acceptedness" by most Arabs though).
Well, that is neither here nor there. The issue is impact. Israel has a generally booming economy (certainly the massive transfers help in some areas, but Egypt serves as a fine example one can get billions and still piss it away if you're stupid enough), non-trade with the Arabs is a triviality in large part.
Moving on:
Now, and indeed since the 1980s at least, there is no economic point.
I disagree. It isn't enforced, and as you put it correctly, Arab economies are a joke, true. But it definitely has a strong psychological effect that prevents them from increasing their business in the region tenfold. What is it that Israelis have that Arabs can't find elsewhere, at the same price or cheaper?
Well, potentially integrated export opportunities in some kinds of lower end electronic assemblies. Potential to leverage Israeli IT infrastructure for the Levant for lower cost call center outsourcing. Things like that. Not so much commerce as joint investment.
The Arab boycott imposes more inconvenience and pain on the Arabs than it does on Israel
I'm not sure. Prevents Arab from accessing the Israeli market? They couldn't even without a boycott anyway.
Sure they can. Jordanians do now. Mostly 98 era biz, but its there.
Besides, there are many much more important markets that Arab could conquer (if they were in such a logic that is) before Israel becomes the last remaining spot. OTOH, Israel which has a far better economy indeed, and is much better prepared in nearly every field, from technology to management processes could definitely multiply its market share in the region if it felt totally free.
Well, opportunity analysis, closer markets sometimes make more sense. There is further the issue of non-bilateral blowback in some areas. Were the boycott really enforced and companies made to choose, the Israelis would have far better leverage.
Re the win part, a lot of Israeli practice (speak from my old days working on investment in the Levant) strikes me as not badly adapted to "Med climate" practices. Lots of Israelis are simply Moroccans, Iraqis etc. The cultural fusion of practice, the way which certain institutions were made to work (e.g. in venture capital) etc. provide interesting lessons. Not perfect, but interesting.
In general, few global companies are not going to do business with Israel because the basket-case economies / governments of the Arabs are going to pout and whinge on about it (this even if the boycott was being fully adhered to). Economically or business-wise with few exceptions it's a no brainer.
True, but in France or in Canada for example, 80% of employment is created by small and medium businnesses. IF, and when adhered to, the boycott can penalize those. Of course, that's only theoretical today. But it isn't because something isn't implemented that it should be abandonned. If it's the right thing, its full implemetation should be sought.
I am not sure I follow your thinking here, but if your argument is that 'well we haven't implemented a boycott of Israel to date, but we really should seek full implementation now' I say you're being
Aroubi.
The bloody boycott has not worked, and it ain't going to. Not anymore than the stupid American boycott of Cuba.
Now, I note I am speaking solely to official State lead boycotts. If individual Arab companies, population want to boycott and can sustain the same, then go for it. Organising the same on a non-violent basis would be good for civil society. I doubt it would do anything to the Israeli economy but it might be helpful in mobilising and organising in an open civil way. It would be better if it were made around an achievable goal, such as removal of the WB settlements rather than some messianic Israel ceasing to exist goal.
it simply plays into the crazy Arabs stereotype
Most people aren't even aware of it. So whether it plays into that stereotype or not, would probably depend on how the PR that surrounds it is done when it awareness of it grows.
There has been enough past awareness and promotion that it plays.
We fully agree on this:)
Well, it is so bloody self evident it causes one shame.
I'd start working on being less incompetent. Lose the boycott. At least the State boycotts that are merely jokes.
So, do you continue hitting yourself in the nose with hammer, or do you step back and say, what can I do now?
What can we do now? I would say come out of the pre-industrial age. Making sure the boycott is efficient can be done in parallel though, I don't see why both couldn't go together. Here's where I'd join you: it seems obvious to me that the boycott's success is strongly related to Arabs jumping into our era from the political and economic point of view. Absent this, the boycott is not counter-productive. It's just almost nothing.
Well, getting the economies of the region straight should be a major goal. Take the WB data on business processes, it's shameful. There is a lot of work to be done to remove the rentier mentality and free up the energy of the average Mohammed. Or Shaheen as the case may be. If you are hot to trot for a civil society driven boycott of Israel, well feel free. I see it as a loser (althouhg a popular boycott tied to a concrete and achievable goal, like the removal of Adumim Male has some charm and could even end up as positive PR.
Posted by: The Lounsbury at March 7, 2006 12:07 AM
Ustadh Lounsbury:)
Israel has a generally booming economy (certainly the massive transfers help in some areas
I've been to Israel, spent there some time, so I know they would probably have done as well without the massive transfers. They're light years ahead of continental Europe in terms of dynamics. Were it not for the conflict, they would do even better, much better.
Well, potentially integrated export opportunities in some kinds of lower end electronic assemblies. Potential to leverage Israeli IT infrastructure for the Levant for lower cost call center outsourcing. Things like that. Not so much commerce as joint investment.
Yet, I still think the cons outweight the pros of this. My gut feeling is that, yes, Arabs could make a few bucks out of it, but Israel would make a LOT more and it would help widen the gap between them and Israel. Meaning, relatively speaking, Arabs end up losing. Anyway, whether your opinion or mine, one would have to conduct a real, politically neutral, study about this to have some data to base solid claims on of course.
(me) I'm not sure. Prevents Arab from accessing the Israeli market? They couldn't even without a boycott anyway.
(L.) Sure they can. Jordanians do now.
Well, yeah. Kind of reminds of the free trade agreements between Europe and Tunisia. Looks good on paper. In the end, the nascent tunisian industry gets screwed because it's unprepared, and Tunisian businessmen get no chance of ever touching European soil to look for deals or to even start something up there (thanks to restrictions on free movement for Tunisians by way of visas, and on currency export). Note, I'm not for protectionism at all, I'm actually very much for free trade. But you've got to be prepared. And when you open your borders, make sure you really do it for your own too. Make sure your businessmen can go and compete THERE, not just let the "other's" businessmen come and compete HERE.
The Jodanian-Israeli situation is not so different.
Were the boycott really enforced and companies made to choose, the Israelis would have far better leverage.
Depends in which sectors, and how you approach Arab markets. I mean, in the current situation, it's obvious to me that if made to chose between Israel and any single Arab country, Israel has far better leverage. My point though is not about the current situation, as much as about which direction should be sought.
a lot of Israeli practice (...) strikes me as not badly adapted to "Med climate" practices
Well, again, that could be found elsewhere. I'm thinking about quite a few successful Arabs from the diaspora. The same that would attract Israelis in Arab markets would attract those diaspora Arabs as well, in greater numbers. So again, Israelis are a drop in the ocean here. Dealing with them would make no difference for Arabs. It would make one for Israelis.
if your argument is that 'well we haven't implemented a boycott of Israel to date, but we really should seek full implementation now' I say you're being Aroubi.
I'm not sure what you mean by Aroubi?
As for my argument, I'm just thinking out loud. To be honest, I don't know. I mean, Arabs sure have other priorities, even if the only goal was bugging Israel in itself, they don't even meet the most basic pre-requesites. I'm aware of that. But, your line of thought strikes me as throwing the baby out with the bath water.
Not anymore than the stupid American boycott of Cuba
Oh come on. Are you telling me that it didn't affect Cuba in any way?
I'd start working on being less incompetent. Lose the boycott.
Again, I don't see the connection. I see them as two unrelated issues.
Well, getting the economies of the region straight should be a major goal. Take the WB data on business processes, it's shameful. There is a lot of work to be done to remove the rentier mentality and free up the energy of the average Mohammed. Or Shaheen as the case may be.
(Shaheen's doing fine thanks:)). More seriously, I've done some business in the MENA region, and I can tell you it's not just the WB. The whole region is pathetic. Still, I fail to see the connection with the boycott.
If you are hot to trot for a civil society driven boycott of Israel, well feel free.
I'm not. And I'm not talking about civil society. Mind you, I've done business with Israelis. I'm talking about the current "official" boycott here. More in the line of Helms Burton or China re Taiwan - if Arabs weren't so nothing that is. My impression is that your argument goes somehow along "since Arabs are so unsignificant, they should give up on the boycott and work on becoming something". I fail to see what the boycott has to do with Arabs working on becoming something.
Posted by: Shaheen at March 7, 2006 01:48 AM
More later but to clarify, my note re WB was re a database they have regarding business practices etc, not accusing them of causing the problems. My opinions are exactely the opposite. Once one goes through the DB, one sees why growth has been fucked in MENA.
Posted by: The Lounsbury at March 7, 2006 05:28 PM
Jerry Lewis gets in on this farce! I swear, I am not making this up. From CNN:
Rep. Jerry Lewis of California, chairman of the House Appropriations Committee, worked with other GOP leaders to amend the $68 billion Iraq war spending bill to include language that addresses security concerns raised by the deal.
Perfect name for the guy. Just perfect.
Also, according to the story, there were only two votes against the above amendment: one Dem, and one Rep.
Every time I see bipartisan agreement like this, I remember that The Gulf of Tonkin resolution had overwhelming bipartisan support, too.
Sigh.
Posted by: pantom at March 8, 2006 11:49 PM

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