Order Code IB93113
CRS Issue Brief for Congress
Received through the CRS Web
Saudi Arabia: Post-War
Issues and U.S. Relations
Updated August 20, 2001
Alfred B. Prados
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Current Issues
Security in the Gulf Region
Containment of Iraq
Bombings of U.S. Facilities
Arab-Israeli Conflict
Arms Transfers to Saudi Arabia
U.S. Arms Sales
Third Country Sales
Trade Relationships
Problems in Commercial Transactions
Oil Production
Foreign Investment
Human Rights, Democracy, and Other Issues
Background to U.S.-Saudi Relations
Political Development
Saudi Leadership
Royal Succession
Economy and Aid
Economic Conditions
Aid Relationships
Defense and Security
Congressional Interest in Saudi Arabia
Arms Sales
Arab Boycott
Trade Practices


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Saudi Arabia:
Post-War Issues and U.S. Relations
SUMMARY
Saudi Arabia, a monarchy ruled by the
and approximately 5,000 U.S. troops remain in
Saudi dynasty, enjoys special importance in the
the country. Saudi Arabia continues to host U.S.
international community because of its unique
aircraft enforcing the no-fly zone over southern
association with the Islamic religion and its oil
Iraq; however, Saudi Arabia has not offered the
wealth. Since the establishment of the modern
use of its territory for major air strikes against
Saudi kingdom in 1932, it has benefitted from a
Iraq in response to Iraqi obstruction of U.N.
stable political system based on a smooth pro-
weapons inspections in recent years. Bombing
cess of succession to the throne and an increas-
attacks against a U.S. operated training facility
ingly prosperous economy dominated by the oil
and a U.S. military apartment in 1995 and 1996,
sector. Decrees by King Fahd in March 1992
respectively, have raised some concerns about
establishing an appointive consultative council
security of U.S. personnel and further security
and provincial councils and promulgating a basic
measures have been implemented. Saudi Arabia
law providing for certain citizens’ rights could
convicted and executed four Saudi nationals for
signal a gradual trend toward a more open politi-
carrying out the 1995 bombing. After extended
cal system.
investigations, on June 21, 2001, a U.S. federal
grand jury indicted 14 members of Middle East
Since late 1995, King Fahd has suffered
terrorist organizations for the 1996 bombing.
increasingly from ill health, and Crown Prince
None is believed to be in U.S. custody at this
Abdullah has assumed many routine govern-
time.
mental functions. The upsurge in oil prices that
began in 1999 has relieved pressure on Saudi
Principal issues of bilateral interest include
budgets but created concern in the U.S. Adminis-
the Saudi position on the Arab-Israeli conflict,
tration and Congress. In March 2000, Members
security in the post-war Gulf region, arms trans-
of Congress introduced legislation to reduce or
fers to Saudi Arabia, Saudi external aid pro-
end U.S. assistance or arms sales to countries
grams, bilateral trade relationships, and Saudi
engaged in oil price fixing.
policies involving human rights and democracy.
Saudi Arabia has supported Arab positions on
The United States and Saudi Arabia have
the Palestinian question and Saudi leaders feel
long-standing economic and defense ties. Be-
strongly about Muslim claims in Jerusalem, which
tween World War II and 1975, the United States
is the third holiest site in the Islamic religion. At
provided a total of $328.4 million in economic
the same time, Saudi Arabia supports -
and military aid to Saudi Arabia, reducing and
Arab-Israeli peace talks and has endorsed
ultimately terminating these programs as Saudi oil
several key Israeli-Palestinian agreements
derived income burgeoned in the 1960s and
reached during the 1990s. Also, in 1994, Saudi
1970s. A series of informal agreements, state-
Arabia and its Gulf allies decided to drop the
ments by successive U.S. administrations, and
secondary and tertiary phases of the Arab boy-
military deployments have demonstrated a strong
cott (which penalize companies that deal with
U.S. security commitment to Saudi Arabia. Saudi
Israel), although they have not yet formally re-
Arabia was a key member of the allied coalition
nounced the primary boycott, which bans direct
that expelled Iraqi forces from Kuwait in 1991,
dealings with Israel.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On June 21, 2001, U.S. Attorney General John Ashcroft announced that a federal
grand jury had indicted 14 individuals in connection with the bombing attack on a U.S. Air
Force apartment complex at Khobar Towers on June 25, 1996. According to the Justice
Department, 13 of those indicted belong to the pro-Iranian Saudi Hizballah organization,
and the 14th is linked to the Lebanese Hizballah organization. (Saudi Hizballah appears to
be a chapter of the parent Hizballah organization in Lebanon.) According to the press, none
of the persons indicted is in U.S. custody at this time; 11 are reportedly in Saudi custody.
Although no Iranian is named or charged in the indictment, Ashcroft said “[t]he indictment
explains that elements of the Iranian government inspired, supported and supervised
members of Saudi Hizbollah [variant spelling].”

In an interview published on June 23, Saudi Interior Minister Prince Nayef appeared
to rule out extradition of the suspects to the United States, stating that “[t]he trials must
take place before Saudi judicial authorities....” He added that “[n]o other entity has the
right to try or investigate any crimes occurring on Saudi lands.”

BACKGROUND AND ANALYSIS
Current Issues
Security in the Gulf Region
Saudi Arabia in Brief
Saudi Arabia was a key member of
Population (July 2000): 22,023,506*
the allied coalition that expelled Iraqi
(includes 5,360,526 foreign residents)
forces from Kuwait in February 1991.
Growth rate: 3.28%
Most Saudi military forces were
Area: 1,945,000 sq. km. (750,965 sq.mi.)
(almost 3 times that of Texas)
committed to the allied effort; a senior
Ethnic Groups: (native Saudis only)
Saudi army officer (Lt. General Khalid
Arab 90% Afro-Asian 10%
ben Sultan) acted as commander of the
Religion: (native Saudis only)
Joint Arab-Islamic Force, which was a
Muslim 100% (Sunni 85-95%; Shi’ite 5-15%)
principal component of the coalition; and
Literacy (1995):
Operation Desert Storm was staged
63% (male 72%, female 50%)
from Saudi territory. The joint force
GDP: $142.7 billion (1999);
known as Peninsula Shield, comprising
$164.8 billion (2000)
5,000 to 10,000 personnel drawn from
Government Debt:
the armed forces of the six states of the
Domestic (1999) $130 billion
Gulf Cooperation Council (GCC), is also
External (1998) $4.3 billion
Inflation: (-0.2%, 1998; -1.2%, 1999; 0%, 2000)
under Saudi command. Plans to expand
this small force have been under
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discussion since the Gulf war. Saudi Arabia is important in post-war security planning for the
Persian Gulf region, both through bilateral arrangements with the United States and through regional
security cooperation.
Approximately 25,000 U.S. military personnel remain in the Gulf region (sometimes more
during periods of increased tension with Iraq). Among these are several contingents in Saudi
Arabia, including U.S. Air Force units involved in enforcing a no-fly zone over southern Iraq and
U.S. Army units involved in air and missile defense. As of September 2000, the U.S. Defense
Department estimated that 7,053 U.S. military personnel were in Saudi Arabia, including 770 from
the Army, 325 from the Navy, 63 from the Marine Corps, and 5,895 from the Air Force. In
addition, a number of U.S. contractor personnel work with the Saudi Armed Forces and National
Guard. Press estimates variously put the number of U.S. personnel in Saudi Arabia between
35,000 and 40,000, but according to some estimates this number has declined to approximately
27,000.
So far, Saudi Arabia has been reluctant to conclude a prepositioning agreement like those
reportedly signed with other Gulf states. Press reports have indicated that the United States and
Saudi Arabia are using a 1977 training agreement [see below] as a framework for a broader
program of military cooperation between the two countries. In November 1999 and again in April
2000, then U.S. Secretary of Defense William Cohen and Saudi Minister of Defense Prince Sultan
discussed a “Cooperative Defense Initiative” (CDI) that would involve mechanisms for shared early
warning and development of defenses against chemical or biological attack. According to a March
2000 press report, Saudi Arabia and the United States have concluded a Communications
Interoperability and Security Memorandum of Agreement to facilitate Saudi participation in a CDI.
Since 1999, military officials from the United States, Saudi Arabia, and other friendly countries in
the region have held an annual conference called Eagle Resolve to discuss initiatives under the CDI
framework.
Containment of Iraq. Saudi Arabia remains committed to the containment of Iraq and
has called on Iraq to implement resolutions of the U.N. Security Council. On June 11, 2001, Saudi
Arabia announced that it had taken ownership of an oil pipeline connecting Iraq with Red Sea ports
via Saudi territory, a step that Iraqi officials condemned as “illegitimate confiscation.” (Saudi
Arabia had disconnected the pipeline in 1990 after the Iraqi invasion of Kuwait.) Regarding U.S.
military presence, on April 10, 2000, Prince Sultan said U.S. troops in Saudi Arabia “are within
the frame of United Nations assignments and directions to continue the surveillance of southern
Iraq, and also the border of Kuwait and Saudi Arabia, as well as the other GCC countries.”
Although Saudi Arabia permits Saudi-based U.S. aircraft to conduct overflights of southern
Iraq, it opposes large-scale military action against Iraqi targets. On several occasions, Defense
Minister Prince Sultan has said Saudi Arabia would not permit allied aircraft to launch preemptive
or major retaliatory campaigns against Iraq from bases in Saudi Arabia. According to news
reports, during the major 4-day U.S.-British strikes against Iraq in December 1998 (Operation
Desert Fox), Saudi Arabia permitted allied support operations including air space clearance and
take-off by refueling aircraft, but allied combat aircraft did not launch strikes from Saudi territory.
After Desert Fox, Prince Sultan told reporters that “we were not asked [for permission to launch
strikes from Saudi territory] and we will not agree.” Less clear is the Saudi position on the frequent
U.S. smaller-scale responses to Iraqi aircraft or air defense units that have challenged U.S. aircraft
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enforcing the no-fly zone. When asked about Saudi policy toward these retaliatory responses at
a joint press conference with U.S. Secretary of Defense William Cohen on October 19, 1999,
Prince Sultan answered that “these are resolutions of the U.N. Security Council and resolutions of
the allied states, and we have no decision or position.” More recently, on November 19, 2000,
Prince Sultan said the no-fly zone is designed to serve peace, but added that the zone “is not a
Saudi decision, so how can we say if we are with it or not?”
The Saudi government initially withheld official comment on U.S. and British air strikes against
Iraqi air defense installations on February 16, 2001, which were decried in much of the Middle
East, and a senior Saudi official said his country was not previously informed of the strikes. On
February 21, however, Saudi Foreign Minister Prince Saud al-Faysal during a visit to Damascus
issued a joint statement with the Syrian Foreign Minister that “[b]oth sides expressed feelings of
denunciation and anxiety over the recent escalation against south Baghdad.” Iraq’s foreign minister
blamed both Saudi Arabia and Kuwait for allegedly allowing allied strike aircraft to operate from
their territory.
Bombings of U.S. Facilities. Two attacks on U.S. military facilities in Saudi Arabia
have created concern in the United States over the security of U.S. military personnel stationed in
Saudi Arabia and other U.S. service members stationed elsewhere in the Gulf. The first, which
occurred on November 13, 1995, at the headquarters of a U.S. training program for the Saudi
National Guard in the capital of Riyadh, killed seven persons (including five U.S. citizens). Several
months later, Saudi authorities charged four Saudis with the crime. The four, who confessed to
being influenced by Islamic fundamentalist exiles, were convicted and executed.
The second and more lethal explosion, which occurred at Khobar Towers (a housing facility
for U.S. Air Force personnel near Dhahran Air Base) in June 1996, killed 19 U.S. Air Force
personnel, wounded many others, and prompted the relocation of most U.S. military personnel to
more remote sites in Saudi Arabia to improve security. Press reports allegedly based on Saudi
investigations and reported statements by other suspects have suggested involvement by Iran, but
Saudi officials have called these reports inaccurate. Earlier reports had suggested involvement by
Usama bin Ladin, a wealthy Saudi Sunni Muslim expatriate active in militant Islamic fundamentalist
causes; bin Ladin has praised the bombings in Saudi Arabia but has not claimed responsibility for
them. On May 22, 1998, Saudi Minister of Interior Prince Nayif told reporters from Kuwait that
the Riyadh and Khobar bombings “were carried out by Saudis with the support of others” (whom
he did not identify). The Minister further stated in November that bin Ladin was not responsible
for either the Riyadh or the Khobar bombings but acknowledged that individuals influenced by bin
Ladin might have conducted the attacks.
A breakthrough in the case seemed likely in June 1997, when Canada deported to the United
States a Saudi Shi’ite Muslim, Hani al-Sayigh, who was suspected of a role in the bombing. But
a plea arrangement under which al-Sayigh would provide information on other terrorist activities
collapsed later that year, and Saudi Arabia requested his extradition. After U.S. courts denied an
appeal by the suspect to avoid deportation, the United States extradited Sayigh to Saudi Arabia
on October 11, 1999. Prince Nayif told reporters that “we have specific information and evidence
confirming Sayigh’s involvement in the unjust terrorist act in the city of al-Khobar” and added that
Saudi Arabia will seek extradition of any other suspects linked to the bombing. Over a year later,
on January 11, 2001, Prince Nayif said Sayigh was involved in the bombing and added that several
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other Saudis had been detained as well, but he also alluded to “the presence of strong and
important elements abroad,” whom he did not identify.
In September 1999, media cited purported U.S. intelligence information that three Saudi men
linked to the bombing had taken refuge in Iran. On October 2, 1999, Iran’s foreign minister
rebuffed an alleged request from President Clinton to Iranian President Khatemi for Iranian
assistance in resolving the case. Asked on March 12, 2000, if any suspects in the Khobar case
were currently in Iran, Prince Nayif told reporters that “we cannot hold anyone responsible until
the facts become clear to us.” Later, on October 30, 2000, he commented that “[t]he main
suspects are not in Saudi Arabia” and added that “[w]e are making efforts for their return to the
kingdom.” There have been numerous reports, denied by both the U.S. and Saudi governments,
that both governments fear that a finding of Iranian involvement could complicate relations with Iran
or force U.S. retaliation against Iran.
On June 21, 2001, U.S. Attorney General John Ashcroft announced that a federal grand jury
had indicted 14 individuals in connection with the Khobar Towers bombing. According to the
Justice Department, 13 of those indicted belong to the pro-Iranian Saudi Hizballah organization and
the 14th is linked to the Lebanese Hizballah organization. (Saudi Hizballah appears to be a chapter
of the parent Hizballah organization in Lebanon.) According to the press, none of the persons
indicted is in U.S. custody at this time; 11 of them are in Saudi jails. Although no Iranian is named
or charged in the indictment, Ashcroft said “[t]he indictment explains that elements of the Iranian
government inspired, supported and supervised members of Saudi Hizbollah [variant spelling]. In
particular, the indictment alleges that the charged defendants reported their surveillance activities
to Iranian officials and were supported and directed in those activities by Iranian officials.”
Ashcroft said the investigation is continuing and additional charges will be brought, as appropriate.
During the investigation, U.S. law enforcement officials criticized Saudi counterparts for not
providing U.S. investigators with access to suspects in the Khobar bombing. In the years following
the bombing, then President Clinton, then Secretary of Defense William Cohen, then Attorney
General Janet Reno, and FBI Director Louis Freeh made representations to Saudi counterparts
to obtain more access. According to a May 14, 2001 article in The New Yorker and other media
reports, starting in late 1998, Saudi officials began allowing FBI agents to watch behind a one-way
mirror as Saudi interrogators posed questions provided by the FBI to suspects and witnesses. In
a phone call on June 21, 2001–the day the indictments were announced–President Bush thanked
Saudi Crown Prince Abdullah for Saudi cooperation in the investigation. The FBI Director also
expressed his appreciation, along with his hopes that the suspects would be brought to justice in
the United States. In an interview published on June 23, however, Saudi Interior Minister Prince
Nayef appeared to rule out extradition of the suspects to the United States, stating that “[t]he trials
must take place before Saudi judicial authorities....” He added that “[n]o other entity has the right
to try or investigate any crimes occurring on Saudi lands.”
Arab-Israeli Conflict
Saudi Arabia has supported Arab positions on the Palestinian question and strongly endorses
Muslim claims in the old city of Jerusalem, which is the third holiest site in the Islamic religion.
Saudi Arabia has generally favored a peaceful solution to the Arab-Israeli conflict. It has
supported several milestone Israeli-Palestinian agreements (Oslo and Wye River), and participated
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in multilateral Arab-Israeli peace talks on regional issues. In 1994, the GCC states, including Saudi
Arabia, decided to terminate enforcement of the so-called secondary and tertiary (or indirect) Arab
boycott of Israel while retaining the primary (or direct) boycott. Saudi officials tend to blame Israel
for snags in the peace process, and Saudi Arabia has been increasingly critical of Israeli policy
since the outbreak of Israeli-Palestinian clashes in late 2000 and the election of Israeli Prime
Minister Ariel Sharon in February 2001. According to a New York Times article of May 17,
2001, Saudi Crown Prince Abdullah declined an invitation to visit the United States in June,
reportedly to indicate displeasure over what Saudis regard as insufficient U.S. efforts to restrain
Israeli military actions against the Palestinians. On June 18, Defense Minister Prince Sultan
suggested that Arab countries should reconsider their position toward international companies that
deal with Israel if peace efforts do not succeed. In a meeting with U.S. Secretary of State Colin
Powell on June 29, Crown Prince Abdullah reportedly expressed satisfaction that the United States
was “taking the issue seriously” but said “[t]he perception exists that the Israelis have turned their
backs on peace.”
Saudi Arabia, like other Arab states, recognizes the Palestine Liberation Organization (PLO)
as the legitimate representative of the Palestinian people and provides some financial support to
Palestinian institutions. At an Arab League meeting on October 22, 2000, Crown Prince Abdullah
took the lead in creating a $1 billion fund: $800 million to help preserve the “Arab and Islamic
identity of Jerusalem” and $200 million to help families of Palestinians killed in the current unrest.
Saudi Arabia reportedly pledged a total of $250 million to these two funds, and provided an
additional $30 million to the Palestinian Authority (PA) on November 5 as a separate donation.
At an informal international donors’ conference at Stockholm on April 11, 2001, Saudi Arabia
pledged $225 million in direct monetary support to the PA over a 6-month period to cover
emergency expenses. PLO/PA Chairman Yasir Arafat received a $45 million grant during a visit
to Saudi Arabia on July 23, 2001, but it is not clear whether this represented part of the $225
million grant pledged by Saudi Arabia in April.
There have been unsubstantiated reports of Saudi assistance to the PLO’s rival organization,
the fundamentalist Hamas, particularly after the Saudi-PLO rift that occurred after the PLO
supported Iraq in 1990. In its report entitled Patters of Global Terrorism, 2000, the State
Department noted that Hamas receives funding from “private benefactors in Saudi Arabia” and
some other countries but does not estimate amounts involved. Also, on March 3, 2000, Crown
Prince Abdullah paid a visit to Lebanon that included an unprecedented meeting with a delegation
from the Shi’ite Muslim Hizballah militia. During his visit, Abdullah praised the Lebanese
“resistance” (consisting mainly of Hizballah) for seeking to expel Israeli forces and militia allies from
Israel’s “security zone” in southern Lebanon. (Israel withdrew in May, and the allied militia
collapsed.)
Arms Transfers to Saudi Arabia
U.S. Arms Sales. The United States is currently Saudi Arabia’s leading arms supplier.
Total value of arms agreements with Saudi Arabia from 1950 through March 31, 1997, was $93.8
billion, while arms agreements with Saudi Arabia from 1991 through 1998 amounted to $22.8
billion. The upsurge in Saudi arms purchases from the United States after 1990 was due in large
measure to the Persian Gulf crisis and its aftermath. The largest recent sale was a $9 billion
contract for 72 F-15S advanced fighter aircraft, signed in May 1993. As Table 1 shows,
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approximately 21% of the value of U.S.-Saudi arms contracts from 1950 to 1997 were for lethal
equipment (i.e., weapons, ammunition, and combat vehicles, aircraft, and ships); the largest portion
(32%) went for support services (repair, rehabilitation, supply operations, and training). Another
major component of the Saudi program has been construction of military bases and facilities,
accounting for 19%, although most military infrastructure projects were completed by 1990.
A downward trend has marked Saudi arms procurement since the mid-1990s as Saudi
Arabia completed many of its post-Gulf War purchases and the country faced straitened finances.
Since the late 1990s there have been occasional reports of Saudi interest in renovating further their
model combat aircraft fleet, but no significant deals have emerged. On May 7, 2001, the Saudi
Assistant Minister of Defense described his country’s priority as sustaining existing weapon systems
rather than large-scale procurement of new weaponry, despite mounting oil revenues. He ruled
out additional F-15 fighters aircraft to replace aging F-5s this year as well as tank modernization.
Reports in April 2001, however, indicated continued Saudi interest in more and newer F-15s or
possibly F-16 or F-22 fighter aircraft (both made by Lockheed Martin Corporation in Bethesda,
Maryland.)
On September 8, 2000, the U.S. Defense Department announced that Saudi Arabia has
asked to buy three arms packages from the United States: (1) $416 million in light armored
vehicles, anti-tank missiles, and advanced communications equipment for the paramilitary Saudi
National Guard; (2) $690 million in contractor training and maintenance support for Saudi Arabia’s
fleet of F-15 fighter aircraft; and (3) $1.6 billion in flight simulators, repair parts, and other technical
services for the F-15 aircraft. The prime contractors for the first package would be the Diesel
Division of General Motors of London, Ontario, and Raytheon Corporation of Tuscon, Arizona.
The prime contractor for the second package would be al-Salam Aircraft Company of Saudi
Arabia, which is 50% owned by Boeing Co. The prime contractor for the third package has not
yet been determined.
Table 1. U.S. Arms Transfers to Saudi Arabia, 1950-1997
Orders
Deliveries
Category
$ in
% of Total
$ in
% of Total
Billions
Orders
Billions
Deliveries
Weapons & Ammunition
19.893
21.2
9.092
15.6
Support Equipment
16.614
17.7
9.815
16.8
Spare Parts & Modifications
9.778
10.4
5.259
9.0
Supply, Repair, Training
29.615
31.6
17.804
30.6
Construction
17.924
19.1
16.197
27.8
TOTALS
93.824

58.167

Note: All figures are current through March 31, 1997.
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Successive U.S. Administrations have entered into military sales agreements with Saudi
Arabia because of its prestige in the Arab world, its importance as a major source of oil, and its
vulnerability to threats from neighboring states supported in the past by the Soviet Union.
Heightened threats from Iran in the late 1980s and subsequently from Iraq provided rationale for
an expansion of the arms supply relationship, and some observers believe further sales are needed
to redress a continuing gap between Saudi weapons inventories and those of potential adversaries.
Also, the Saudi arms market has helped maintain the U.S. industrial base and create jobs.
Some critics doubt that Saudi forces can absorb large quantities of advanced military
hardware and voice concerns that such equipment could fall into the wrong hands in the event of
external invasion or a radical change in the Saudi regime. Many are concerned that arms being
sold to Saudi Arabia might be used one day against Israel. Others doubt that Israel is seriously
threatened by Saudi Arabia, but oppose sales to Arab countries technically at war with Israel and
fear that enhancement of Saudi air and missile capabilities could increase the costs to Israel of a
future conflict. Another concern is that continuing arms sales to Saudi Arabia undermine efforts
to restrain the flow of advanced weaponry to an already heavily armed Middle East.
Third Country Sales. Saudi Arabia has acquired combat aircraft from Britain and
frigates and support ships from France. In 1988, despite U.S. criticism, the Kingdom purchased
approximately 30 intermediate-range CSS-2 surface-to-air missiles from China, in what has so far
been its only major arms acquisition from a communist state. According to a July 10, 1999 New
York Times
article, U.S. officials expressed concern over a visit by Saudi Defense Minister Prince
Sultan to nuclear and missile facilities in Pakistan in May 1999. Administration officials reportedly
believe Saudi Arabia is seeking missile rather than nuclear weapons technology, and claim to have
received assurances from Saudi officials that Saudi Arabia is not seeking weapons of mass
destruction or nuclear weapons. On August 5, 1999 Prince Sultan told a reporter that “Saudi
Arabia is a signatory of the nuclear non-proliferation treaty and is committed to its international
pledges.” Independent analysts suggest that Saudi Arabia feels the need for increased protection,
as Iraq is no longer covered effectively by U.N. weapons inspections and Iran continues to seek
advanced missiles and reportedly nuclear weapons capabilities.
Trade Relationships
Saudi Arabia was the largest U.S. trading partner in the Middle East in 2000. For that year,
Saudi exports to the United States were estimated at $14.3 billion and imports from the United
States at $5.9 billion. Comparable figures for Israel, the second largest U.S. trading partner in the
Middle East, were $12.9 billion in exports and $6.2 billion in imports. To a considerable extent,
this high volume of trade is a result of U.S. oil imports from Saudi Arabia and U.S. arms exports
to that country. The Saudis buy significant amounts of U.S. commercial equipment as well.
Saudi Arabia has applied to join the 128-member World Trade Organization (WTO) as a
developing country, an arrangement that would give it a special transition period to bring its
commercial procedures in line with WTO rules. The U.S. State Department notes that accession
will require the Saudi government to initiate substantial reforms, including tariff reduction, opening
up financial services (insurance and banking), allowing competition in telecommunications and other
services, and better protection of intellectual property rights. In recognition of its progress in
protection of intellectual property rights, Saudi Arabia was removed from the U.S. Trade
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Representative’s Priority Watch List in 1996, but remains on the basic Watch List pending further
progress. The U.S. Trade Representative reportedly has also cited Saudi observance of the
secondary boycott against Israel as an obstacle to admission to the WTO. In March 2001, WTO
officials reportedly expressed disappointment over a recent list issued by the Saudi government of
activities off limits to foreign investment (see below) and predicted that these restrictions could
delay Saudi accession to the WTO.
Problems in Commercial Transactions. Complaints have arisen within the U.S.
business community over commercial disputes that have resulted in hardships for U.S. companies
doing business in Saudi Arabia and for their employees. These disputes center on allegations by
U.S. firms that Saudi clients have not paid for services rendered or have sought to expand terms
of a contract without further reimbursement, and in some cases have taken reprisals against U.S.
employees of the firms involved. Two such cases remain deadlocked: Hill International, a U.S.
engineering firm, is seeking compensation for extra work done for two Saudi municipalities; Harbert
International Construction, Inc., accepted a partial payment for a contract with the Saudi Ministry
of Agriculture but believes it is entitled to more reimbursement. Saudi officials maintain that their
government has discharged all its responsibilities toward the contractors involved; Members of
Congress have sometimes criticized the U.S. executive branch for not doing enough to uphold the
rights of U.S. employees caught in contractual disputes. According to the State Department, senior
U.S. officials have raised these issues with the Saudi government and have exerted efforts to
resolve commercial disputes. (For further information, see CRS Report 95-666, Saudi Arabia:
Commercial Disputes With U.S. Firms
.) The State Department has also noted that in a
September 1992 letter to the Saudi Minister of Justice, a Harbert official accepted the offer of the
Saudi government pursuant to a final judgment by the Saudi Ministry of Justice. Saudi officials state
that they have given thorough and repeated consideration to the Hill International claim and
consider the case closed.
Oil Production. With the world’s largest proven oil reserves (estimated at 263.5 billion
barrels in January 2000), Saudi Arabia produced an average of 7.83 million barrels per day (bpd)
of crude oil during 1999. Approximately 14.1% of U.S. oil imports and 8.0% of total U.S. oil
consumption came from Saudi Arabia during 1999. Formerly the largest foreign supplier of oil to
the United States, Saudi Arabia has been exceeded in this role by Venezuela and/or Canada during
recent years (see Table 2). In 1998, depressed oil prices impelled Saudi Arabia and other major
producers to initiate cuts in oil production in an effort to stem the oil price slide. In the course of
several meetings since March 1998, members of the Organization of Petroleum Exporting
Countries (OPEC) agreed to reduce oil production by 2.6 million barrels per day in 1998 and 1.7
million in 1999. Saudi Arabia, as the largest producer, agreed to production cuts of 725,000 and
585,000 barrels per day in 1998 and 1999, respectively.
Resurgence of oil prices to their highest post-Gulf War levels by January 2000 created
concern in the U.S. Administration and Congress, prompting proposals in Congress to increase
domestic production of oil and to restrict trade with oil producers unless they agreed to increase
production. On March 2, 2000, Representative Benjamin Gilman, then Chairman of the House
International Relations Committee, introduced a bill, H.R. 3822, requiring the President to reduce,
suspend, or terminate foreign assistance and arms sales to each country determined by the
President to be engaged in oil price fixing to the detriment of the U.S. economy. A companion bill
with similar wording, S. 2182, was introduced on March 6 by Senator Charles Grassley. An
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amended version of H.R. 3822, which authorized but did not require the President to reduce,
suspend, or terminate foreign assistance and sales, was reported by the House International
Relations Committee on March 6 (H.Rept. 106-528). On March 22, by a vote of 382 to 38 (with
one present and 13 abstentions, Roll Call 65), the House passed a further amended version of H.R.
3822, which requires the President, inter alia, to determine which oil producing nations are
engaged in oil price fixing to the detriment of the U.S. economy, submit reports to Congress, and
“take the necessary steps to begin negotiations to achieve multilateral action to reduce, suspend,
or terminate bilateral assistance and arms exports to major net oil exporters engaged in oil price
fixing as part of a concerted diplomatic campaign with other major net oil importers....”
Table 2. Oil Consumption and Imports
(in millions of barrels per day)
Category
1997
1998
1999
2000
Total U.S. Consumption
18.620
18.917
19.519
19.476
Total U.S. Imports
10.162
10.708
10.852
11.093
Imports from Saudi Arabia
1.407
1.491
1.478
1.566
Imports from Venezuela
1.773
1.719
1.493
1.519
Imports from Canada
1.563
1.598
1.539
1.686
Source: DOE.
Since then, with strong Saudi backing, nine OPEC members agreed on the following three
increases in oil production during 2000:
! March 27: 1.452 million barrels per day (bpd), including 585,000 bpd from
Saudi Arabia;
! June 21: 708,000 bpd, including 230,000 from Saudi Arabia; and
! September 10: 800,000 bpd, including 260,000 from Saudi Arabia.
Under a “gentlemen’s agreement” reached at the June 21 meeting, OPEC also established a
mechanism to adjust the supply of oil by 500,000 bpd if the 20-day average price of oil moved
outside a $22 to $28 price band. Members disagree, however, as to whether this mechanism is
automatic or requires separate action by OPEC to implement, and Saudi Arabia has spoken of a
target price of $25 rather than a price band.
After initially rejecting calls for a production cut as oil prices dropped by 20% in December,
Saudi leaders became concerned that oil supply was exceeding demand; consequently Saudi
Arabia supported a decision at the OPEC meeting on January 17, 2001, to reduce total production
by 1.5 million bpd including a Saudi production cut of 486,000 bpd. At a subsequent meeting on
March 18, OPEC leaders agreed on a further cut of one million barrels per day. On the following
day, White House Press Secretary Ari Fleischer described OPEC’s move as a disappointment;
however, President Bush expressed appreciation for an assurance by Saudi Oil Minister Ali Naimi
that OPEC would not let the price of oil exceed $28 per barrel. But as oil prices continued to edge
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downward in the early summer, Saudi officials supported an OPEC decision on July 25 to cut
another production by another one million barrels per day, starting on September 1. President
Bush expressed concern over the possibility of a run-up in oil prices, which could injure the world
economy.
Foreign Investment. Saudi leaders have shown increasing interest in attracting foreign
investment in their energy sector, although projects in upstream oil apparently remain off limits. On
April 10, 2000, King Fahd approved a new foreign investment law which allows international
investors to have full ownership of projects and related property in Saudi Arabia, reduces taxes
from 45% to 30% on corporate profits, and restructures (but apparently does not abolish)
requirements for foreign businessmen to have a Saudi sponsor. On February 11, 2001, the Saudi
Supreme Economic Council issued a so-called “negative list” of those investment activities that
remain off limits to foreign investment. In general, the list covers oil exploration and production,
some manufacturing activities, radio and telecommunications, transport, electricity transmission and
distribution, and a range of services including tourism, publishing, real estate brokerage, and
insurance. According to news reports in March 2001, international trade officials expressed
disappointment over the length and scope of the list. The list will be reviewed annually, however,
and some observers have speculated that it will be shortened as the country adjusts to an expansion
in foreign investment.
On June 3, 2001, Saudi Arabia signed agreements worth approximately $25 billion with nine
international oil companies to develop three natural gas fields, together with related power plants,
transmission pipelines, and water desalinization projects. Six of these companies are U.S.-based,
including Exxon Mobil Corporation, Conoco, Phillips Petroleum Company, Occidental Petroleum
Corporation, Enron Corporation, and Marathon. Exxon Mobil is the lead manager for two of the
three gas field projects. The companies have until the end of the year 2001 to complete project
definition programs for these ventures.
Human Rights, Democracy, and Other Issues
According to the State Department’s annual report on human rights practices for 2000, the
Saudi government’s human rights record has remained generally poor but has shown limited
improvement in some areas. Problems include prohibitions or restrictions of freedom of speech,
press, assembly and association; discrimination and violence against women; discrimination against
ethnic and religious minorities; strict limitations on workers’ rights; arbitrary arrest and detention;
reported abuse of detainees; and lack of a mechanism for citizens to change their government.
During 2000, the government did undertake limited measures to participate in several international
human rights mechanisms.
Of particular concern to Westerners are pervasive restrictions on women’s activities and an
injunction against the practice of other religions throughout the Kingdom. This injunction has been
applied not only against non-Islamic faiths but also at times against the Shi’ite Muslim community
in Saudi Arabia, estimated at 500,000 or more persons mainly in the Eastern Province. Since
1990, the Saudi government has moved quietly to ease some restrictions on Shi’ites. Also,
according to the State Department, high-level Saudi officials have said that Saudi policy allows for
private non-Muslim worship, for example, in private homes or secluded compounds. On April 6,
2000, responding to criticisms by the London-based Amnesty International, a Saudi Under
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Secretary in the Foreign Ministry maintained that “non-Muslims enjoy full freedom to engage in
their religious observances in private.” Earlier, in April 1999, Crown Prince Abdullah told a local
audience: “Taking into account the teachings of Islam, we will do our best to enable Saudi women
to continue to contribute.” On the other hand, King Fahd, in speech carried by the official Saudi
news agency in June 2000, criticized unfavorable assessments of Saudi Arabia’s human rights
record by the London-based Amnesty International and rejected attempts by outsiders “to force
communities to abandon their own beliefs and cultures.”
Political reforms promulgated by King Fahd appear to represent a limited move toward
democracy and protection of individual freedoms. The “main law” announced by the King on
March 1, 1992, bans arbitrary arrest, harassment, or entry of individual homes without legal
authority and specifies privacy in telephone calls and mail. On August 20, 1993, the King
appointed a 60-member consultative council (increased to 90 in 1997), with limited powers to
question cabinet members and propose laws. On August 26, 1993, in a message to King Fahd
carried by the Saudi Press Agency, then President Clinton welcomed the appointment of the
consultative council “as an important step to widen popular participation in the government, which
conforms with your history and traditions.” On the other hand, King Fahd has said that free
elections are not suitable for his country; he stated on March 30, 1992 that elections “do not fall
within the sphere of the Muslim religion, which believes in the al-shura (consultative) system and
openness between ruler and his subjects and which makes whoever is in charge fully answerable
to his people.”
Background to U.S.-Saudi Relations
Oil and national security concerns have combined to produce a close and cooperative
relationship between the United States and Saudi Arabia. Since the award of the first Saudi oil
concession to a U.S. company in 1933, both states have had an increasing interest, respectively,
in the marketing and acquisition of Saudi petroleum supplies. As regional threats multiplied in the
latter half of the century, mutual concerns over the stability of Saudi Arabia and other moderate
regimes in the Arabian Peninsula engendered a significant degree of defense cooperation.
Political Development
Saudi Leadership. As the birthplace of the Islamic religion in 622 A.D. and as the home
of Islam’s two holiest shrines, the Arabian Peninsula has always occupied a position of special
prestige within the Middle East. With the establishment of Arab empires based in Damascus and
Baghdad, the peninsula gradually lost its political importance and sank into disunity. In the 16th
century, much of the Arabian Peninsula came under the nominal rule of the Ottoman Empire;
however, tribal leaders effectively controlled most of the region. During this period, an alliance
developed between an influential eastern tribe, the House of Saud, and the leaders of a puritanical
and reformist Islamic group known as the Wahhabi movement. During the first quarter of the 20th
century, a chieftain of the Saud family, Abd al-Aziz ibn Abd al-Rahman (later known as Ibn Saud)
overcame numerous rivals with the support of his Wahhabi allies and succeeded in unifying most
of the Arabian Peninsula under his rule, with the exception of Yemen in the southwest and the small,
then British-protected principalities along the eastern coast. On September 23, 1932, Abd al-Aziz
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proclaimed the establishment of the Kingdom of Saudi Arabia, which he ruled until his death in
1953. Four of his sons have succeeded him: Saud (1953-1964), Faysal (1964-1975), Khalid
(1975-1982), and the present King Fahd, who acceded to the throne in 1982.
Royal Succession. King Fahd, a dynamic leader for many years, is almost 80 years old
and suffers from medical problems including diabetes and arthritis. In early 1996, King Fahd
temporarily turned over affairs of state to his half-brother, Crown Prince Abdullah, for a six-week
period while the King recuperated from a stroke. More recently, amid conflicting reports about
the King’s condition, Crown Prince Abdullah has increasingly carried out many governmental
functions since 1996, together with other senior princes of the royal family. Another key figure is
Defense Minister Prince Sultan, a full brother of King Fahd, who is generally considered next in
line of succession after Prince Abdullah. (King Fahd, Prince Abdullah, and Prince Sultan also hold
the positions of Prime Minister, First Deputy Prime Minister, and Second Deputy Prime Minister,
respectively.)
Most commentators believe the royal family would back Crown Prince Abdullah in a smooth
transfer of power if King Fahd should pass from the scene. Various sources describe Prince
Abdullah as more traditional and less western in outlook than King Fahd and more oriented toward
the Arab world. On balance, the Crown Prince seems likely to maintain Saudi Arabia’s long-
standing strategic and economic ties with the United States. Some speculate, however, that
succession could become more intricate after Abdullah (who is only two years younger than Fahd
but believed to be in better health) and fear that future intra-family rivalries could weaken the Saud
dynasty over the long term. Possible future candidates include some 25 brothers and half-brothers
of King Fahd and a number of sons and nephews.
In June 2000, Saudi Arabia formed a council consisting of 18 senior princes representing
leading branches of the royal family, chaired by Crown Prince Abdullah with Prince Sultan as
deputy chairman. An observer speculated that its role seems to be to organize family matters,
provide a family forum, and deal with other family issues. A leading member of the royal family
described the body as a specialized council dealing with family matters and added that “I don’t
think it has a political role.”
Economy and Aid
Economic Conditions. Oil is the dominant factor in the Saudi economy, accounting for
35-40% of GDP, 75% of budget receipts, and 90-95% of export earnings as of April 2000; even
more of the GDP is derived indirectly from the oil industry. Despite immense oil revenue,
increasing state expenditures, the oil glut of the early 1980s, and the collapse of oil prices in the
mid-1980s have put governmental fiscal assets in deficit since 1982, and since 1987 the
government has begun to borrow. Costs from the 1990-1991 Gulf war of $55 billion (including
$16.9 billion contributed to the United States to help defray expenses) placed additional burdens
on the Saudi economy. Domestic debt in 1999 was approximately $130 billion, more than 90%
of estimated gross domestic product. Although the government was able to retire its external debt
in May 1995, it had to borrow $4.3 billion again from external sources in December 1997 to
finance purchase of aircraft. As of 1999, foreign assets managed by the central banking authority
were estimated at $54 billion (down from $127.7 billion in 1981). Of the $54 billion in foreign
assets, $17.8 billion is designated to guarantee the riyal (the Saudi currency unit). Besides the
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official $54 billion portfolio, the State Department estimates $29 billion held by autonomous
government institutions (pension, development, and social insurance), and $11.4 billion worth of
foreign assets in the commercial banking system in 1999.
In 1994, the Saudi government instituted austerity measures to deal with shrinking revenues,
and during the following year, the government announced additional measures including raising the
costs of utilities (electricity, water, and communications facilities) and reducing various subsidies
in an effort to increase revenues and cut spending. Fluctuating oil prices continue to affect Saudi
budgets (see Table 3). The budget for 2000, announced on December 21, 1999, entailed a $7.5
billion deficit, but original Saudi revenue projections were overtaken by the surge in oil prices since
early 1999. Increased revenue led to an estimated surplus of $12 billion in 2000, the first
budgetary surplus in over a decade. For 2001, the government has projected a balanced budget.
The 2001 budget, announced on December 18, 2000, is based on a relatively conservative oil
price forecast of $22 per barrel and continued fiscal restraint.
Table 3. Saudi Budget Figures
(In billions of U.S. dollars, at exchange rate of $1.00=S.R. 3.75)
1998
1999
2000
2001
Category
Budget
Actual
Budget
Actual
Budget
Est.
Budget
Expenditure
52.3
50.4
44.0
48.3
49.3
54.1
57.3
Revenue
47.5
38.1
32.3
39.2
41.9
66.1
57.3
Balance
-4.8
-12.3
-11.7
-9.1
-7.5
12.0
0
Source: Saudi Ministry of Finance; Saudi government announcements; press estimates.
Aid Relationships. As Saudi oil income expanded, U.S. economic aid ended in 1959.
Small amounts of aid continued through 1975, limited to a small international military education and
training program after 1968. Total U.S. aid to Saudi Arabia from 1946 through its termination in
1975 amounted to $328.4 million, of which $295.8 million was military and $32.6 million was
economic assistance. Approximately 20% of total aid was in the form of grants and 80% in loans,
all of which have been repaid.
Defense and Security
The United States and Saudi Arabia are not linked by a formal defense treaty; however, a
series of informal agreements, statements by successive U.S. Administrations (see box), and
military deployments have demonstrated a strong U.S. security commitment to Saudi Arabia.
Although Saudi forces acquired experience during the Gulf war and are undergoing further
upgrading through a large-scale program of arms procurement (see below), both Saudi Arabia and
its five smaller Gulf neighbors remain vulnerable to future external aggression. On one hand, both
the Iranian and Iraqi armed forces suffered major personnel and equipment losses during the
1980-1988 Iran- Iraq war and Operation Desert Storm, respectively, and neither is in a position
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to offer an immediate threat to the GCC. On the other hand, as shown in Table 4, the combined
forces of Saudi Arabia and its GCC allies are outnumbered in important categories by those of Iraq
and Iran, even after the losses sustained by both countries in recent wars.
Congressional Interest in Saudi Arabia
The terrorist attack on Khobar
Key U.S. Statements
prompted resolutions in the 104th
Congress (H.Con.Res. 200 and S.Res.
“An attempt by any outside force to gain control of the
273) honoring slain U.S. and other victims
Persian Gulf Region will be regarded as an assault on
and (in S.Res. 273) expressing support for
the vital interests of the United States of America and
such an assault will be repelled by any means
Saudi efforts to apprehend the
necessary, including military force.”
perpetrators. In the 105th Congress,
–President Jimmy Carter, Jan. 23, 1980
Section 1052 of the Defense Authorization
(The Carter Doctrine)
Act for FY1998-1999 (P.L. 105-85)
required the Secretary of Defense to
“There’s no way that we could stand by [and see
Saudi Arabia] taken over by anyone that would shut
report on the roles of various Defense
off that oil.”
officials in providing counter terrorism
–President Ronald Reagan, Oct. 1, 1981
guidance to U.S. military personnel before
(The Reagan Corollary)
and after the 1995 and 1996 attacks on
U.S. facilities in Saudi Arabia. An
“The sovereign independence of Saudi Arabia is of
vital interest to the United States.”
amendment (S.Amdt. 605) incorporated
–President George Bush, Aug. 8, 1990
as Section 8161 of S. 1122, the
(following Iraq’s invasion of Kuwait)
Department of Defense Appropriations bill
for FY2000, expresses the sense of the
“President Clinton’s commitment to the security of
Senate that the FBI together with the State
friends in the Gulf, like that of every President since
Department should report to Congress by
Franklin Roosevelt, is firm and constant.”
–Secretary of State Warren Christopher,
December 31, 1999, on the status of the
Feb. 21, 1993)
Khobar investigation and that the U.S.
government should take steps to punish
the parties responsible, once they are
identified. The Senate passed S. 1122 on June 8, 1999 by 93 to 4, Record Vote No. 158;
however, the provision regarding the Khobar bombing did not appear in the companion House bill
H.R. 2561 or in the conference report. In early 2000, the precipitate rise in international oil prices
prompted several legislative initiatives designed to restrain oil price increases, as described in a
previous section of this issue brief. In the 107th Congress, H.R. 334, the Persian Gulf Security
Cost Sharing Act, introduced on January 31, 2001, would direct the President to seek further
contributions from Saudi Arabia and other Persian Gulf states to defray the costs of U.S. military
deployments in the region.
Arms Sales
Congress has been particularly sensitive to the argument that enhancing Saudi arms inventories
could result in an incremental increase in overall threats to Israel, although some Members have
supported such sales on the grounds that they help buttress Saudi defense capabilities in the Gulf
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and enhance the U.S. job market. Since the mid-1970s, several major arms sales to Saudi Arabia
have been challenged in Congress: F-15 fighter aircraft in 1978; Airborne Warning and Control
System (AWACS) aircraft, advanced tanker aircraft, and advanced Sidewinder air-to-air missiles
in 1981; and a large package of air-to-air, surface-to-air, and air-to-sea missiles in 1986. All of
these sales ultimately were allowed to proceed, and several larger sales followed before and during
the Persian Gulf crisis, without significant congressional opposition. The Bush Administration’s
proposal in September 1992 to sell 72 improved F-15XP fighters to Saudi Arabia met some
opposition, but resolutions to block or postpone the sale never came to a vote. (For details on
congressional consideration of the F-15XP sale, see CRS Report 93-473, Congress and the
Middle East 1992,
pp. 29-31.)
Arab Boycott
Members of Congress frequently have decried Saudi participation in the Arab boycott
because of its impact on Israel and on U.S. businesses. Some have called for linkage between
U.S. arms sales to Saudi Arabia and Saudi renunciation of the boycott. Part C of the Foreign
Relations Authorization Act for FY1994-1995 (P.L. 103-236, April 30, 1994), known as the
Anti-Economic Discrimination Act, under a provision that took effect on April 30, 1995, bars the
sale or lease of U.S. defense articles or services to any country that sends letters to U.S. firms
requesting compliance with, or soliciting information regarding compliance with, the Arab League
primary or secondary boycott of Israel. This provision permits a presidential waiver on national
security grounds; then President Clinton exercised waiver authority for Saudi Arabia and several
other Arab states in Presidential Determination (PD) 95-20, May 1, 1995, and again in PD 96-23,
April 30, 1996. On April 24, 1997, the President delegated waiver authority under this act to the
Secretary of State.
Trade Practices
In the 105th Congress, Section 2801 in Division G of the Consolidated and Emergency
Supplemental Appropriations Act, 1999 (P.L. 105-277, October 21, 1998, 112 Stat. 2681-845)
required reports every 120 days by the Secretary of State, in coordination with the Secretaries of
Defense and Commerce, on actions taken by the three departments to resolve commercial disputes
between U.S. firms and Saudi Arabia as listed in a June 1993 letter from the Secretaries of
Defense and Commerce. In the 106th Congress, this requirement was retained in Section 209 of
the Foreign Relations Authorization Act for FY2000-2001 (H.R. 3427, passed by reference in
H.R. 3194, the Consolidated Appropriations Act for FY2000, P.L. 106-113, November 29,
1999. Currently, this provision appears in Section 201 of H.R. 1646, the Foreign Relations
Authorization bill for FY2002-2003, which was passed by the House on May 16, 2001, by 352
to 73, Roll no. 121.
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Table 4. Selected Middle East Armed Forces
Main
Combat
Surf. Surf.
Chem
Nucl.
Country
Force Size
Battle
Aircraft
Msls a
Warf. Cap
Cap.b
Tanks
Iran
513,000
1,135
291
S
X
D
Iraqc
429,000
2,200
316
S
X
D
Saudi Arabiad
183,500
910
417
I


Yemene
66,300
840
49
S


U. A. E.
65,000
331
101



Oman
43,500
117
40



Kuwait
15,300
310
82



Bahrain
11,000
106
34



Qatar
12,330
44
18



a S = short-range (70-1,000 km); M = medium-range (1,001-3,000 km); I = intermediate-range (3,001-5,000 km).
b D = reportedly under development (now or in the past).
c Figures represent estimates of Iraqi forces and equipment after Operation Desert Storm. Some older tanks are
believed unserviceable. The aircraft total does not include approximately 112 combat aircraft impounded
in Iran.
d Force total includes active members of the Saudi Arabian National Guard (estimated at 57,000). Tank total
does not include an estimated 145 French-manufactured AMX-30 tanks in storage.
e Force total includes conscripts (estimated at 25,000). Tank total does not include 150 obsolescent Soviet-
manufactured T-34 tanks.
Source: The International Institute for Strategic Studies, The Military Balance, 2000-2001.
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