Washington’s oil spill

They revolve around his assertion: “Saudi Arabia is more and more an irrational state — a place that spawns global terrorism, even as it succumbs to an ancient and deeply rooted isolationism, a kingdom led by a royal family that can’t get out of the way of this own greed. Is this the fulcrum that we (the US) want the global economy to be balanced on?”

Intrigue within royal households is nothing new or revealing. But what makes Saudi Arabia so important is that instability in the kingdom can have debilitating effects on the world’s economy. Crippling of its main oil facilities will send oil prices sky rocketing to $90 a barrel — petrol prices in India will exceed Rs 100 a litre. Should instability spread to Saudi Arabia’s neighbors, oil prices could touch $150 a barrel, with petrol prices in India reaching nearly Rs 200 a litre. (Osama bin Laden had suggested that oil prices should rise to $144 per barrel to bring the US to its knees.)

More importantly, in such an eventuality, like most other economies, the Indian economy will just collapse. So even as we spend so much time and effort with our Pakistan-centric obsessions, it is time to look more closely on developments in the Persian Gulf, from where we get over two-thirds of our oil supplies and where over three and a half million Indians reside and remit back around $7 billion annually.

Baer asserts that for years the US has looked the other way as Saudi Arabia exported Wahhabi extremism and fundamentalism worldwide, through organisations like the Muslim Brotherhood, the Islamic Jihad and even elements of Al-Qaeda. In return, the Saudis permitted American troops on their soil, went on a shopping spree for American weapons, encouraged the ever influential American oil industry and whetted the appetite of the American aerospace industry with extravagant purchases of luxury jets and Boeing aircraft. Virtually every influential American — including George Bush Sr, Bill Clinton, Henry Kissinger, James Baker, Dick Cheney, George Shultz, Frank Carlucci and Colin Powell — has been associated with companies and causes benefiting from Saudi largesse.

Baer provides details to assert that all these deals involved huge kickbacks to Saudi decision makers. In return, people like Bill Clinton and Colin Powell looked the other way at violations of human rights in Saudi Arabia.

They also became apologetic as growing evidence emerged of the links of important Saudi personalities like the governor of Riyadh, Prince Salman, with so-called charities like the “Saudi High Commission for Aid to Bosnia” and the “International Islamic Relief Organisation” that supported extremist causes, apart from links that elements in Saudi Arabia had with the perpetrators of the terrorist attacks on New York and Washington, 15 of whom were Saudi nationals.

The Russians have regularly alleged that terrorism and religious extremism in Chechnya have been funded and supported by Saudi Arabia. The Americans have maintained a discreet silence on this. The Russians recently provided the CIA with evidence of direct links between the Saudi government and Chechen terrorists. One report described how Chechen terrorists were brought to a camp near Riyadh and given intensive military training and religious indoctrination. Prince Salman was the sponsor of this camp. Baer also asserts that King Fahd’s son, Prince Azouzi, channeled funds to a known supporter of Osama bin Laden in December 1999 to be passed on to Islamic groups in Chechnya to “slaughter Russian soldiers and civilians alike”.

Closer to home for us, the main beneficiaries of Saudi largesse have been the Taliban regime and Pakistan. Saudi Arabia funded the purchase of F-16s by Pakistan in the 1980s. Baer confirms that Pakistan and Taliban-ruled Afghanistan received 1,50,000 barrels per day of crude from Saudi Arabia, worth around $1.5 billion annually, virtually free of cost.

These “concessional” oil supplies to Pakistan continue. Further, while it is known that Saudi leaders have been granted access to Pakistan nuclear facilities in Kahuta in recent years, Baer refers to reports in the 1970s stating that Saudi Arabia had paid over $1 billion to Pakistan to help it develop an “Islamic” bomb to counter the “Hindu” nuclear capabilities.

The revelations in Sleeping with the Devil clearly indicate a tussle within the corridors of power in Washington on how to deal with Saudi Arabia. While Crown Prince Abdullah is seen as a moderate seeking reform, others in the royal entourage, from the powerful “Sudeiri” clan like Prince Salman and Interior Minister Prince Naif, are seen to be radical Islamists.

While the political consensus in the Bush administration is to persuade Saudi Arabia to end its funding of extremist Islamic causes, there are others who advocate more radical action including military intervention should the need arise. Baer himself alludes to the possibility of intervention by the American 82nd Airborne Division. Former CIA Director James Woolsey has alluded to the possibility of the partition of Saudi Arabia with the oil-rich and Shia-dominated Ihsa province being made a virtual American protectorate.

The uncertainties in Saudi Arabia also perhaps provide some rationale for the American intervention in Iraq. It is Iraq alone, where oil production could conceivably rise to 6 million barrels per day within the next few years, that has the potential to provide the additional oil the world would require for global economic stability, if Saudi Arabia faces internal instability that causes its oil exports to fall.