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Port-buyout debate brings attention to United Arab Emirates
(South Florida Sun-Sentinel (KRT) Via Thomson Dialog NewsEdge) Feb. 24--Political flap over plans by an Arab company to run terminals in Miami and five other U.S. seaports has focused attention on the United Arab Emirates and its growing business clout.
The Maine-sized nation on the Persian Gulf is booming, thanks to surging prices for its oil and gas exports. Per-capita income for each of its roughly 4 million residents now stands on par with Western European nations by some estimates, and UAE companies are so flush with cash they're expanding fast domestically and abroad.
South Florida companies are cashing in, especially on the country's building boom that features some of the world's tallest skyscrapers and ambitious real state developments on man-made islands.
Last year, Miami-based architectural design firm Borges + Associates was selected to design a new city in the emirate of Ajman, about 30 minutes from Dubai. The project spans more than 2,000 acres and includes hotels, condo towers, villas, golf courses, schools, recreational facilities, retail and more, the company said.
Among the emirates, Dubai long has been the most commercial -- a centuries-old port and trade hub with an entrepreneurial mindset, "the Singapore of the Middle East," said Jim Lewis, technology and public policy director at the Washington, D.C-based Center for Strategic and International Studies. Dubai's society and economy today are among the most open in the Middle East; its companies making some of the boldest strides to integrate in global markets.
"These are the sort of folks the United States wants to encourage," Lewis said.
Plans by Dubai World Ports to invest $6.8 billion to buy London-based Peninsular and Oriental Steam Navigation Co., with operations in six U.S. seaports, represent just a sliver of UAE's global business push.
Earlier this month, the Dubai sheikdom which owns Emirates, the largest Arab airline, announced plans to pump $15 billion into a new company to lease planes, develop airports and make aircraft parts to tap the growing aviation market in the Middle East and Asia. Still, that pales next to ventures by Dubai's Emaar Properties, now one of the world's largest property developers.
An Emaar-led consortium of Saudi and Emirati companies plans a $26.6 billion city, the King Abdullah Economic City, on Saudi Arabia's Red Sea. It also is developing a $4 billion community called "Cairo Heights" in Egypt, a $4 billion community called "Damascus Hills" in Syria, and projects in New Delhi and across India.
Emaar even has teamed with Italy's Giorgio Armani SpA to create a worldwide chain of Armani luxury hotels and resorts.
That's on top of UAE companies taking stakes in communications giant Time Warner Inc and automaker DaimlerChrysler, and also buying the New York Essex House Hotel and the global port assets from Jacksonville-based CSX Corp. in China and other countries.
Only some of Dubai's petrodollars are heading to the United States, but that cash is key to the U.S. economy, analysts say. As a debtor nation, with big trade and budget deficits, the United States increasingly depends on cash from overseas to pay for U.S. spending on imports, war and other expenses.
"While we have to analyze each deal," said economist Tony Villamil, president of Washington Economics Group in Coral Gables. "We have to be very careful about interfering with the flow of foreign investment into our country."
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