ABU DHABI Ñ Gulf Cooperation Council states are seeing a massive
flight of capital amid continued arms purchases and transfers by the
region's huge expatriate work force.
Gulf analysts and reports said Saudi Arabia has been hurt the most by
the flight of capital from the Gulf region. They said more than 60 percent
of the cash transfers from the six GCC states stems from the Saudi kingdom.
The Abu Dhabi-based Arab Monetary Fund reported that cash transfers by
expatriates totaled $24.6 billion in 2002. The group said the level of
capital flight will not be reduced in 2003.
In all, the flight of capital from the six GCC states exceeded $240
billion over the last decade. The biggest outflow came from Saudi Arabia,
which lost $152.8 billion, followed by the United Arab Emirates, with $36.9
Analysts said the large weapons purchases by most of the GCC states have
exacerbated the balance of payments in the region. Kuwait, Saudi Arabia and
the UAE have been the largest weapons purchasers among the GCC members over
the last three years.
GCC states have not imposed any measures to halt the flight of capital,
analysts said. They said GCC states have not limited the amount of money
that can be sent to countries outside of the region.