Saudis Repatriate Tens of Billions of Dollars from U.S.

LONDON, August 21 (IslamOnline & News Agencies) - Saudi investors have repatriated tens of billions of dollars from the United States because of concerns their assets might be frozen, the Financial Times reported Wednesday, August 21.

According to Youssef Ibrahim, a senior fellow at the U.S.-based Council on Foreign Relations, Saudis have pulled out at least 200 billion dollars (204 billion euros) from the United States in recent months, the paper said.

Ibrahim said the withdrawal had been fueled by calls from some hardliners in the United States for a freezing of assets held by investors from oil-rich Saudi Arabia.

He said the outflows could pick up in response to the legal action launched last week in the United States against three members of the Saudi royal family, Sudan and several Gulf banks and charities by relatives of the victims of the September 11 attacks.

The suit accuses them of covertly financing the Al-Qaeda network, and seeks 1,000 to 3,000 billion dollars in punitive damages for each of the 14 counts from 99 organizations or individuals. It also seeks 100 trillion dollars in damages from Sudan.

According to the report, investors are believed to be shifting funds out of U.S. private equity, stocks, bonds and real estate into European accounts.

However, the largest established Saudi investors did not yet appear to be shifting money out of the United States, the paper quoted some bankers in London as saying.

"I'm skeptical about a mass exodus," one banker said. "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 percent to 50 percent of the money that was with U.S. banks is seeking diversification."

Details of Saudi investments in the U.S. 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, reported the Financial Times.

"People no longer have any confidence in the U.S. economy or in U.S. 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 U.S."

The U.K. daily newspaper, the Telegraph, reported Tuesday, August 20, that Saudi's richest investors are threatening to pull billions of dollars out of America in anger at allegations they helped fund Saudi-born dissident Osama bin Laden.

This threat comes as foreign investment in the U.S. dries up because of business scandals, lower corporate earnings and the collapse of the technology boom, the paper said.

According to U.S. government figures, foreigners put $124 billion into the U.S. last year, down from $301 billion in 2000, said the Telegraph, quoting economists as saying that the reluctance of wealthy outsiders to expand their business interests in America is a major threat to the world's largest economy.

A spokesman for the Al-Rajhi Investment and Development Corporation, a bank named in the lawsuit, said: "This is an act to extort Saudi money deposited in the United States and a way of meddling in the region."