Full Circle: Saudi Arabia's Yamani in Accord with Emerging US Energy Policy

By Eugene Bird

Deja vu. Only 5 days after Yitzhak Shamir completed the most difficult visit to the US national capital by an Israeli prime minister in the checkered history of US-Israeli relations, former Saudi Arabian Oil Minister Ahmad Zaki Yamani told an audience at Washington, DC's Georgetown University that a solution to the Arab-Israeli problem "will remove" forever the "remote possibility" of an Arab oil embargo. Yamani, who held the most important job in international petroleum affairs for 25 years, called for closer US-Arab ties.

"Let us capitalize on the fact that the Arabs need America as much as America needs them," Yamani said. "America has an interest in creating stability in the Gulf and bringing about a peaceful settlement to the Arab-Israeli conflict, not only because of oil but also because it is the leader of the Free World, a role which dictates that it pursue its time-honored policy of striving to uphold right, justice and peace."

It was the same message, in different words, that Yamani delivered in the 1970s, when he was Saudi Minister of Petroleum. At that time the US ignored the pledge, and the 1973 Middle East war and oil embargo followed.

In his Nov. 20 Georgetown talk Yamani touched on the Israel-Palestine question at several points, saying: "One need not be concerned about an oil embargo. Solving the Arab-Israeli problem will remove that remote possibility forever. " In answer to questions from the audience, Yamani expressed his hope and belief that the US is moving to a new policy there.

Yamani joined a growing chorus of voices in Washington warning of a mid-'90s petroleum supply crisis that will force up prices and increase imports from the Arab countries to above 50 percent of US imports. He expressed his own belief that the Gulf oil producers, with almost seven-tenths of the world's total oil reserves, are locked into a mutual relationship with the US. They are the lowest cost producers, and the US is likely to continue to consume one-third of the non-Communist world's oil. In exchange for providing a relatively low-cost source of oil for the US, the Gulf needs American imports and technology.

Yamani, who was invited to speak by Professor Hisharn Sharabi and introduced by Georgetown Dean Peter Krogh, received a standing ovation after answering almost half' an hour of questions from the floor of the auditorium. The close to standing-room-only audience included students from the School of Foreign Service and Center for Contemporary Arab Studies, a sprinkling of oil consultants and more than one US Department of Energy specialist. C-SPAN covered the Georgetown Yamani lecture in full, and it was shown across the US, Europe and on the US Information Agency's Worldnet.

The Yamani speech came just one week before the US Department of Energy announced a major reversal of Reagan era policies: Conservation and alternative fuels will be at the center of a more active US government energy policy involving almost every major department of government, and "innovative" energy policies will be encouraged at both the federal and state levels. Someone is reading the Yamani crystal ball outside of Texas. This time it may have a real impact on US policy in the Gulf and eastern Mediterranean.

American Chamber of Commerce in Egypt Supports Egyptian Structural Changes

With almost a 25 percent increase in exports from the US to Egypt during the first nine months of 1989, and with imports from Egypt falling fairly sharply, the American Chamber of Commerce in Egypt is continuing its series of symposia promoting private enterprise development of the economy. High-tech industries from both Europe and the United States, including IBM, participated in a three-day conference in mid-December jointly sponsored by the UNDP, the Egyptian government and the Chamber. It promoted the concept of developing a "Pyramid Valley" for the electronics industry in Egypt.

Egypt's new ambassador to the United Nations, Amr Mousa, will speak to the Chamber in January before departing for his New York posting. He is the former head of his government's international department and served as Egypt's ambassador to India.

Also in January, Minister of Electricity and Energy Maher Abazza is scheduled to speak on Egyptian power projects and the proposed interconnective link with other Nile and African countries.

A major conference on recent Egyptian government efforts to open the economy to entrepreneurs is planned for March. The Chamber will emphasize structural changes needed to stimulate joint ventures and exports.

US-Middle East Trade Rising

First nine month figures for 1989 indicate that, while American exports to the Near East and North Africa are rising by 10 percent a year, imports, mostly oil, are increasing even faster. Total US exports to the area for the first nine months were more than $11 billion, while imports from the area to the US rose from $10 billion to almost $13 billion.

While this is bad news for both energy import and US trade balances, it means there should be more funds for US exports to the Near East and North Africa in future years. The two major dollar earners in the region are still Iraq and Saudi Arabia. More than half of US imports from the area come from those two countries.

Final trade figures for all of 1989 are likely to show a widening diversity of exports from the US to all the major trading partners in the area, with substantial increases for Egypt and Iraq.