And an increasing proportion of this impact is reflected in cross-border deals and the FDI statistics, in Europe as well as in the US. Consider also the fuel-exporting countries’ current account surplus, expected to more than double from $225bn in 2004 to $533bn in 2006. Americans at the gas pump are putting a lot of money into foreign hands.

Some of this liquidity is seeking more active participation than investment in US stocks and bonds – not always successfully. Noteworthy ‘non-successes’ include thwarted acquisitions by China National Offshore Oil Corporation and Dubai Ports World of US interests (Unocal and ports, respectively). It is troubling to contrast coverage of the two. The rhetoric in the US body politic towards the Dubai deal pointed to a potential path of destructive cultural conflict, while the Chinese deal was uncoloured by any sense of ethnic or religious differences.

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The anti-Dubai commentaries signal a challenge ahead for US leaders who seek to explain the potential impact of how the US views and relates to the Arab world. Having elected not to seize its resources as a matter of empire or global justice, the US and its fuel-hungry friends have decided instead to work toward integrating the fuel exporters into the family of nations and the recycling of petro-dollars into investment.

The president, and the many lobbyists hired by Dubai, may seek to improve the public’s evaluation of this moderate Arab state. This challenge seems to fit into the tensions that have accompanied globalisation in the past two decades:

  • FDI and cross-border deal flows may grow based on the actions of the most successful enterprises as well as some national policies, but these forces are rebuffed by nationalism or economic patriotism.

 

  • Some leaders seek to enrich their nations’ talent pools through selective immigration; others talk about the foreign worker who wants to do your job for less money.

 

  • Business process outsourcing is growing and has led to knowledge process outsourcing, while some jurisdictions try to disallow either or both.

The numbers seem to tell us it is two steps in one direction even if the news points to one step in the other. But which steps are forward and which are back hasn’t yet been settled.

Daniel Malachuk works with business and government leaders on global direct investment strategies. He has advised many of the world’s leading companies and served in the public sector as director of White House operations.

E-mail:daniel.malachuk@gmail.com