By Jack Fairweather in Kuwait (Filed: 01/01/2003)

Kuwaitis, faced with the threat of war against Iraq, are withdrawing hundreds of millions of dollars from America to invest at home.

Kuwait's stock market has soared by more than 30 per cent in the past year, and last month alone around $90 million (£60 million) was removed from investment projects in America.

The reason, according to one Kuwaiti investor, is simple: "People in Kuwait are looking at what happened to America on September 11, and all the threats of further terrorism, and have reached the decision that it's safer to keep the money at home."

The possibility of a war that would remove Saddam Hussein has also been inspiring confidence. Investors see it as an opportunity to target what they hope will be a new generation of wealthy Iraqis.

"We're going to have everything that they want; to begin with, essential items like food and clothing, and then more costly items such as cars," said one would-be entrepreneur. "We've got to be ready."

There are deeper reasons for the turning tide of Kuwaiti capital investments after September 11. Jasem al-Sadoun, an economic consultant, said: "Although there have been no actual resrictions, there is a perception among Kuwaitis that the US is no longer the friendly place to invest in that it once was."

-- Anonymous, January 03, 2003