The Bush administration's increasingly hostile attitude towards Saudi Arabia since 11 September is threatening to undermine a 70-year-old friendship, writes Michael Jansen It is ironic that US President George Bush chose to meet with Saudi Ambassador to the US Prince Bandar Bin Sultan on 27 August. On that same day last year, Bush received a letter from Saudi Crown Prince Abdullah, the effective ruler of the kingdom, suggesting that it was time for the two countries to agree to part company. The crown prince made the proposal because Bush had flatly refused to engage as peacemaker between Palestinians and Israelis, thereby prolonging and exacerbating the cycle of violence and risking a region-wide popular backlash towards the US and its Arab allies. Two weeks later, 19 Arab hijackers, 15 of them Saudis, crashed civilian airliners into the World Trade Centre, the Pentagon and a field in Pennsylvania. The Bush administration and many US citizens adopted the view that Saudi Arabia was responsible -- its puritanical brand of Islam had incited the hijackers and Saudi oil wealth finances "Islamic terrorism" worldwide. Until January 2000, when Bush was installed in the White House, the Saudi-US relationship was based on the understanding that the US would protect the kingdom in exchange for stable oil supplies at affordable prices. While there were occasional policy differences, both sides swept them under the carpet. No longer. Today differences are aired openly in the media. US officials and analysts continued to level a variety of accusations against the Saudis, even after the latter refuted allegations of involvement in the 11 September events, cracked down on dissident elements in the kingdom and froze assets of individuals and institutions accused of financing Al-Qa'eda, the movement blamed by the US for the attacks. These allegations multiplied when Riyadh declared its opposition to the US war in Afghanistan and refused to permit Washington to use bases in the kingdom as launching pads for air raids. When Bush began speaking of effecting "regime change" in Baghdad, the Saudis again denied the US the use of Saudi bases, saying they would neither participate in nor finance such a campaign. This amounted to a complete volte- face: in the 1991 US-led campaign against Iraq, the kingdom hosted half a million US troops, sent its soldiers into battle alongside them and paid for a large portion of the $60 billion bill. To make his position crystal clear, Crown Prince Abdullah convinced Arab leaders meeting at summit level last March to reconcile with Iraq and issue a declaration stating that an attack on any Arab country would be considered an attack on all. Although he had engineered this diplomatic coup, Prince Abdullah was still not prepared to give up on Bush. The crown prince put forward a peace plan adopted by the summit proposing "normal relations" between the Arab states and Israel if the latter withdrew from "all the territory occupied in 1967". This amounted to a major change of Arab policy. When Abdullah formally presented his plan to Bush in April, the US president not only ignored it, but did nothing to stop Israel's full-scale military re-occupation of the West Bank and Gaza. Saudi-US relations continued to slide. Last month they reached rock bottom when it was revealed that, in a briefing to the Defence Policy Board, an associate of the Rand Corporation, Laurent Murawiec described Saudi Arabia as "the kernel of evil" and called for the US to take over the kingdom's oil fields, seize its financial assets and topple the House of Saud if the Saudis did not go along with US demands. Although the administration quickly disclaimed responsibility for Murawiec's ideas, they are said to be shared by senior members of the administration, including Vice President Dick Cheney, Defense Secretary Donald Rumsfeld and his deputy, Paul Wolfowitz. The disclosure of the chief elements of the briefing called into question the oil-for-protection basis of the Saudi- US relationship. Meanwhile, the crumbling of political ties between the two countries went hand in hand with an equally dramatic deconstruction of the intricate web of economic, financial and cultural links built up over the decades. Last autumn, private Saudi investors began withdrawing their money from the US. The divestment amounted to $100- 200 billion, according to an article in The Financial Times on 21 August. This figure was confirmed by a report in the Saudi daily Arab News, which quoted "a high ranking official of the Saudi Arabian Monetary Agency" as saying that "$200 billion" had been pulled out. Both the negative political climate and US economic woes are blamed. Merill Lynch/Gemini Consultancy estimates that the Saudis have $700 billion in the US. Saudi investors are said to be afraid that the US could freeze or seize their assets if the deterioration in relations continues at the present pace or if the US goes to war with Iraq. Investors from other Arab countries, who have placed $600 billion outside the region, have also been pulling money out of the US. Some Saudis would like to punish the US by pressing the Organisation of Petroleum Producing Countries to price oil in euros rather than dollars. Last December negotiations on Saudi Arabia's $35 billion Gas Investment Initiative stalled due to key differences between the Saudis and the 10 international oil companies tendering. While Saudi political leaders would normally reconcile differences, the government is reluctant to award US companies a major stake in the initiative. Although Riyadh is aware that it would be difficult to exclude them, it does not want to become dependent on US firms. Since the Palestinian Intifada erupted in September 2000, Saudi citizens have joined their Arab brethren in a mass boycott of US franchises, firms and products. In April, the Saudis enhanced the boycott by launching a grass-roots campaign that resulted in a drop in US exports to the kingdom by 30.5 per cent in the first half of this year. US exports fell to a 12-year low and less than half of the all-time high of $5 billion recorded in 1998. A 55 per cent decrease in US beverages and tobacco exports was recorded and a 39 per cent decline was registered in US exports of machinery and equipment, which are being replaced by European and Japanese exports. Saudi exports to the US, 95 per cent in oil and gas products, also dropped by 24.2 per cent during this period. Post-11 September US visa requirements and popular hostility towards Arab students and visitors has dramatically shrunk the number of Saudi students at US colleges and universities and visitors to the US, depriving the US economy of billions of dollars. On 15 August, families of the 11 September victims filed a trillion-dollar civil law suit against three Saudi princes and 100 banks and charitable institutions, accusing them of supporting and financing Al-Qa'eda. Saudi lawyers promptly retaliated by preparing legal actions on behalf of Saudis detained in the US and at Guantanamo Bay, Saudi students denied visas to continue their studies at US universities and others who claim they have been harmed by the US domestic clampdown and media campaign. These highly publicised suits and counter-suits are straightforward tit-for-tat moves that reflect the rapid meltdown of US-Saudi political, military and economic relations.
