Saudis withdraw billions of dollars from US By Roula Khalaf in London Disgruntled Saudis have pulled billions of billions of dollars out of the US, signalling a deep alienation from America. One analyst said the total funds withdrawn by individual investors amount to $200bn. Other bankers put the figure nearer to $100bn. The US-Saudi alliance was put under severe strain after September 11, when 15 of the aeroplanes' 19 hijackers were Saudi nationals. Accusations that Saudi Arabia's austere brand of Islam breeds terrorism and its charities finance Osama bin Laden's al-Qaeda network have been perceived in the kingdom as attacks on Saudi society and its religion. An analyst from the Rand Corporation said at a Pentagon briefing this month that Saudi Arabia was the "kernel of evil", exacerbating concerns among the country's elite that they have become demonised in the US and their money is no longer safe there. As part of the fight against terrorism, the US and Saudi authorities have been monitoring the accounts of dozens of Saudi companies and individuals, a move that alarmed Saudi merchants. Youssef Ibrahim, a senior fellow at the Council on Foreign Relations working on a project re-examining US-Saudi relations, said Saudis had withdrawn at least $200bn from the US in recent months. He said the move has been driven by hawkish US commentators' calls for the freezing of Saudi assets. The trend, he added, can be expected to accelerate with last week's trillion-dollar lawsuit by relative of the victims of September 11. The lawsuit accuses several Saudi institutions and charities and three members of the royal family, including the defence minister, of financing terrorism. Details of Saudi investments in the US are sketchy but financial analysts believe they range between $400bn and $600bn. The funds are invested in private equity, the stock and bond markets and real estate. The figures include investments by members of the royal family. Investors are not thought to be closing down their US accounts. Instead they are moving money into European accounts. Bankers in London said the largest established Saudi investors did not yet seem to be following the trend. One said: "I'm sceptical about a mass exodus. But there was a lot of Saudi money with American banks that was not diversified, now they [the Saudis] are spreading their wings. Perhaps 30 per cent to 50 per cent of the money that was with US banks is seeking diversification." The Saudi money shifts may have contributed to the recent downward pressure on the dollar. "People no longer have any confidence in the US economy or in US foreign policy," said Bishr Bakheet, a financial consultant in Riyadh. "And if the latest lawsuit is not thrown out in court, it will mean no more Saudi money in the US." ====================== interesting. please discuss.
