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Saudi investment in the United States (last updated July 31, 2004)
Fahrenheit 9/11 suggests that the Bush administration - and perhaps the United States government - is beholden to Saudi Arabia because Saudi citizens have invested and control a large percentage of the U.S. economy. According to the Washington Post, some bankers estimated in February 2002 that "high net worth Saudi individuals" had invested $500 billion to $700 billion in the U.S. economy.
Concerns about such investments in the United States first arose in the mid-1970s, when Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries began accumulating much wealth and investing in the United States. Such fears did not come to pass at that time and have not done so since.
Moreover, such investments comprise just one aspect of the complex ties between the United States and the Saudi elites. Most importantly, the United States arguably is far more dependent on Saudi oil than it is on Saudi investments. In fact, when the Comptroller General of the United States looked into this question in the 1970s, it noted that "manipulating the price or supply of oil or the threat of manipulation is likely to have a greater impact on the U.S. economy and financial markets than OPEC's use of its financial holdings."
In any event, the president of the United States does have authority to prevent an immediate withdrawal of all Saudi investments. Under the International Emergency Economic Powers Act, 50 U.S.C. 1701 - 1707, the president can block or nullify any withdrawal of property that is owned by a foreign country or citizen and is subject to the jurisdiction of the United States. Such a withdrawal would still have long-term effects, perhaps encouraging others to withdraw funds as well.
Sources: Robert G. Kaiser, Enormous wealth spilled into American coffers, Washington Post, February 11, 2002. Report by the Comptroller General of the United States, Are OPEC financial holdings a danger to U.S. banks or the economy? (June 1979).
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