Page 434 - Arabia the Gulf and the West

The ‘Sting* 431

steep increase in oil prices in these years ($78,000 million was added between

1974 and 1976), the OPEC governments, as we have seen, have refused by and
large to help solve the financial problems which they have had a major hand in
creating. Instead, it has been left to the Western banking system to underwrite
the financial deficits of the indigent Afro-Asian countries. Up to the middle of

1977 Western commercial banks alone had loaned almost $75,000 million to
these countries - some of which have been teetering on the edge of bankruptcy
for years. Should they be driven through any reason to repudiate their foreign
debts, the financial consequences for the Western world would be serious in
the extreme.
Meanwhile OPEC’s member states have been investing the bulk of their

surplus funds in the West. A rough and ready calculation of the several ways in
which these funds have been invested was submitted to the United States
Senate sub-committee on foreign economic policy in September 1977. It
showed that the member governments of OPEC (which meant, in effect, the

Middle-Eastern members) had invested $48,000 million in Western govern­
ment securities, stocks and real estate; $49,000 million in Western commercial
bank deposits; $9,750 million in loans to international financial organizations;
$16,000 million in loans and grants to ‘developing countries’ (mainly, that is, to
other Arab and Muslim states); and an unascertainable sum in loans to Eastern

European countries. At least $10,000 million - and possibly as much as
$15,000 million - was unaccounted for.
The investment of their financial surpluses in the industrial West by the
Middle-Eastern members of OPEC has been accompanied by a sustained

effort on their part, either directly or through the medium of Western finan­
ciers, politicians and publicists, to persuade an uneasy Western public that no
potential danger or conflict of interests resides in the injection of these sur­
pluses into the Western economic system. The arguments deployed in support
of this proposition have become sufficiently well known by dint of assiduous

repeution to require no extensive restatement here. The surpluses are rep­
resented either as the proceeds of normal trading, or as the natural conse­
quence of high prices being obtained for a commodity in limited supply, or
even as a form of compulsory saving imposed upon the Western industrial
nations by OPEC out of a disinterested solicitude for their economic welfare.
Some Western apologists go so far as to suggest that the mulcting of the West is

a punishment for its sins - for its affluence, for its materialism, above all for its
indifference to the less fortunate masses of Asia and Africa. Others counsel us
to regard the unrelenting extraction of vast sums from the coffers of the West
y the Arabs and Persians, and their expenditure of them as they see fit, as an
act of Providence, the only seemly response to which is unquestioning sub­

mission; or as akin to a force of nature, to the existence of which we must adjust
ourselves with a decent fatalism. At the same time, and without any apparent
conscious appreciation of the contradiction, the governments of Britain,