Saudi investors pull out funds as rift with US deepens
Rising anti-American sentiment has led many Saudi investors to withdraw some $200 billion in funds from accounts in the US over the past several months and transfer them into European ventures, asserts the US-based Council on Foreign Relations.
The migration of Saudi funds is primarily linked to calls recently voiced in the US urging a freeze on the assets of investors suspected of terror funding. Such motions raise worries among Saudi businesspeople that their money is no longer safe in US markets.
Saudi nationals are estimated to hold some $600 billion in long-term investments in Western markets, over half of that total in the US alone.
The US-Saudi alliance was put under severe strain after September 11, when Saudi-born Osama Bin Laden has led 19 hijackers, 15 of them Saudis, to carry terror attacks on the US. In the aftermath of the violence, US authorities have secretly been scrutinizing over 500 of Muslim and Arab small businesses operating in the country. The traders are suspected of funding terrorist groups overseas.
Relations between the two Gulf War allies have been further marred by a briefing, given in July to the US pentagon, in which a Rand Corporation analyst referred to the Saudi Kingdom as an enemy of the United States and suggested an ultimatum be delivered to the Saudis to stop all support for terrorism or face seizure of oil fields and financial assets.
In spite of strong concerns that Saudi authorities have not done enough to stem fundraising for Islamic militants, the US remains Saudi Arabia’s top investment and trade partner. Bilateral trade amounts to roughly $22 billion annually, while US investments in the Kingdom total nine billion dollars per annum.
While controlling 25 percent of the world's known oil reserves, the Saudis today provide only eight percent of the oil consumed in the United States, far less than the 25 percent the kingdom provided in the 1970s. Nonetheless, Saudi Arabia still ranks as America’s third largest foreign oil supplier, after Canada and Venezuela. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
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