SAN FRANCISCO — The political fallout over the Dubai Ports World deal may create some challenges for U.S. investors setting their sights on overseas opportunities, said Madeleine Albright, secretary of state from 1997 to 2001.
"The U.S. will lose if the government decides it does not want foreign investment or foreign goods here, because … we won't be welcome in those countries," Ms. Albright said during her keynote address to the Pension Real Estate Association's spring conference earlier this month in San Francisco.
Dubai Ports World, based in Dubai, United Arab Emirates, announced it would divest the U.S. seaport operation acquired in its purchase of Peninsular & Oriental Steam Navigation Co. A political firestorm erupted last month after U.S. politicians claimed P&O was handing over the operation of vital U.S. seaports to a company based in a country that some claim had ties to terrorism.
Ms. Albright said one of her concerns was the rise of protectionism. "Why I'm troubled with what's going on now is because we will want to invest there (outside the U.S.) and they (non-U.S. investors) will want to invest here," Ms. Albright said.
"I'm troubled by the rise of the sense of keeping others out of our country," said Ms. Albright, principal at The Albright Group LLC, a Washington global business consulting firm that advised Dubai Ports World on potential business deals in China.
What's more, the U.S. will suffer because foreign governments, particularly China, own a large portion of U.S. debt; American consumers will suffer because they depend on cheap goods manufactured abroad, she said.
At the same time, emerging economies in Asia and elsewhere are starting to develop a middle class. These governments need long-term investments in infrastructure, for example, but U.S. investors are not considered dependable, she said.
What's more, the Iraq war is hindering investment opportunities for U.S. investors in the Middle East, she noted.
"While I believe there are opportunities in the Middle East, "I think the war in Iraq is worse than the war in Vietnam in its long-term consequences for the U.S.," she said. "There's a ripple effect in the Middle East and how the U.S. is regarded."