European Stars And Stripes (Newspaper) - November 30, 1986, Darmstadt, Hesse                                Economic slump takes its toll in the persian Gulf Baghdad Iran Kuwait a Traino s Oater pm sat Oman saudi Arabia United Arab "/oh1, emirates a Pawn 0 mall 40� the to gag in Oil prices has left things looking rather Bleak Lor the persian gut nations. L by Eileen Powell associated press of Oil prices Are taking a toll on the once booming economies of the Arab slates of the persian Gull saudi Arabia. Kuwait. Oalar the United Arab emirates Oman and Bahrain have cd government spending. Construction projects have been delayed employment curtailed and imports sloshed. Everything seems of have gone against the Gull slates Oil prices Are Down lower interest rates have reduced their investment income and the weaker Dollar has Cut their purchasing Power. The Iran Iraq War also hurls business in the Region. Rising attacks by both countries on Oil lankers and freighters in the Guh have Hurt shipping and raised insurance premiums. The Gull economies began sliding into recession in 1984, when Oil prices averaged Abou $34 a barrel. The downturn continued in 1985 As prices Ell to about $27 and deepened this year As they plunged to Hall that level. Oil income makes up an average of to percent at the Gulf states government revenues. And government spending accounts for about three quarters of the Region s Gross Domestic product the value of All goods and services produced. Henry to a22am, chief economist at the Bahrain based Gulf International Bank wrote in a recent newsletter that the Lota Gap of the six Gulf states was close to $160 billion at the end of 1985. Without economic diversification it is Likely to remain a that level in real terms with cycles of booms and slumps according to future developments in the Oil Market he wrote. Felling Oil Revenue have forced the Gulf states to dip into their savings to bolster spending. The Basel based Bank Lor International settlements in Switzerland reported last month thai saudi Arabia alone Drew More than $53 billion from its overseas Bank accounts in the first six months of 1986. They have plenty to draw on largely savings deposits and foreign investments aces muffled during the 1973-1984 Oil Boom. The Guh countries were estimated to have some $205 billion in foreign assets at the Start of 1986. Saudi Arabia the Gull s largest country with a population of 11 million has twice delayed announcing this year s budget citing uncertainties caused by the Oil Price slump. Bui saudi officials have said spending this year will be at least 25 percent less than in 1985. Oalar also has failed to produce a 1966 budget while Ini other countries have announced spending cuts of up to 15 percent. Spending cuts forced Bahrain to Shelve plans Lor new government buildings and some water and electricity Plant expansions. Oman decided against developing a new oilfield saving �650 million. The United Arab emirate s budget issued 10 months late includes no funding Lor new projects. As construction declined so did employment. No exact figures Are available Tor the size of lha Gulf s workforce. Bui thousands of manual labourers Many paga16 the stars and stripes sunday november 30, 1986