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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: calgal who wrote (251556)	4/27/2002 1:31:46 AM
From: calgal	Respond to of 769670

Saudis need U.S. help as much as U.S. needs Saudi oil Kingdom wants investment, jobs for growing population Edward Epstein, Chronicle Washington Bureau Friday, April 26, 2002 Washington -- Talks at President Bush's ranch on terrorism and the Palestinian- Israeli conflict weren't Saudi Arabian Crown Prince Abdullah's only business in Texas. He also had an agenda in Houston: discussions with oil companies about financing and building a vast natural gas project, one of the biggest infrastructure developments in Saudi history. Abdullah's Texas trip displayed a stark fact about U.S.-Saudi ties -- despite the discord on the two pressing issues of the day, the two nations have a deep, symbiotic relationship driving them ever closer. Saudi Arabia, which accounts for 27 percent of the world's proven oil reserves, is one of the largest supplier of foreign oil to the United States. That alone led the United States to station forces on Saudi soil to protect the oil fields and has led successive presidents to ally themselves with an administration that many critics call repressive and corrupt. What's less well-known is that Saudi Arabia, with a booming population and high unemployment among young people, needs U.S. investment, technical help and political clout for a host of development projects. U.S. officials, with an eye toward Bush's war on international terror, view economic development as a key policy tool for encouraging democracy across the Arab world. For regimes like resource-rich Saudi Arabia, which has encountered growing economic and demographic strains despite its vast oil wealth, the need to expand the economy is paramount. "Saudi Arabia has a well-documented high birthrate and a rapidly growing young population entering the workforce. Economic diversification is and will be critical," David O'Reilly, chairman and chief executive of ChevronTexaco Corp., said at a conference on Saudi business prospects this week in Washington. The San Francisco-based company has done business in the Saudi kingdom since 1933, when King Ibn Saud signed its predecessor firm, Standard Oil of California, to develop his land's oil resources. "Our relationship with the United States is an essential part of our global economic and energy perspective," Saudi Finance Minister Ibrahim Al-Assaf said at the Washington conference. "While Saudi Arabia continues its strong efforts to improve its relationship with all countries and economic blocs, the relationship with the U.S. remains pivotal," he added. In addition to the energy business, the Saudis have purchased about $26 billion in U.S. military hardware, bought a fleet of passenger jets, granted AT&T a $4 billion contract for telephone system upgrades and given construction firms a $3 billion deal to build schools. But outside of oil and gas, the Saudis haven't attracted a lot of direct foreign investment, largely because their legal and banking systems aren't up to international par, and because of concerns about corruption among some members of the vast royal family. Much of the royal family's vast wealth is invested outside the country, with an estimated hundreds of billions of dollars in the United States. These are all issues Abdullah is trying to correct as he points Saudi Arabia toward membership in the World Trade Organization. WTO members are legally bound to comply with international trade and banking rules and provide a legal system capable of backing up such rules. The key to getting into the WTO is support from the United States -- the key to winning such support is carrying out Abdullah's reforms. The strains that the recent Israeli actions in the West Bank place upon U.S.-Saudi relations are quite real, as is Bush's desire to oust Iraq's Saddam Hussein, said Charles Duelfer, a visiting scholar at the Center for Strategic and International Studies in Washington who was a longtime leader of international weapons inspectors in Iraq. "The Saudis undoubtedly will point to how vulnerable the United States is politically in the region, and how Saddam Hussein is taking advantage of that, " Duelfer said. "The Saudis view replacing Saddam Hussein as questionable, even more so with the growth of the Israeli-Palestinian issue." sfgate.com