Dubai, AIG, and the Ports
We learned last month that Dubai, the Gulf microstate, needs more time to pay off its debt. Adam Maxwell Jenkins, a college roommate of mine, has a great letter in today's Financial Times explaining one especially interesting way that affects us:
It was only a little more than three years ago that the teetering Middle East state conglomerate was barely beaten back from taking control of 22 US ports after its DP World subsidiary agreed to purchase the British owner-operator P&O. Congressional opposition, voiced at first by Senator Charles Schumer, soon flowered into bipartisan outcry, attacking the deal as dangerously undermining US homeland security by placing a vulnerable component of our border infrastructure in the hands of a foreign company.
Dubai ended up agreeing to sell the ports to another conglomerate in order to calm the controversy. The punchline is that company's name: AIG Global Investment Group. "Truly, one cannot make this stuff up," Jenkins writes:
If only cooler heads had prevailed, taxpaying investors in the US might now be well positioned to capitalise on Dubai World's distress as it gears up to dispose of purchases made in better times.
Sad stuff. For what it's worth, Mother Jones was on the right side of this: we posted an article in 2006 explaining why not selling the ports to Dubai was a bad idea.