Iraq Looting of Kuwaiti Goods, Treasury Told : Iraq Seizure of $4 Billion From Kuwait Alleged

Iraq has appropriated $3 billion to $4 billion in gold bullion, cash and military and civilian goods from Kuwaiti financial and commercial institutions since taking over the country, it was reported today.

The New York Times, quoting Arab bankers in the Persian Gulf and London, said the transfer of the goods to Baghdad appreciably increased Iraq’s financial reserves, estimated by Arab and British bankers at $6.5 billion before Iraq invaded Kuwait on Aug. 2.

The Iraqis also confiscated huge amounts of civilian and military airplanes, automobiles, machinery, food and other goods, the report said.

“We’re talking about gold, cash, cars, airplanes, tankers and a lot of military hardware that fell intact into the hands of the Iraqis on the first days of the invasion,” the newspaper quoted an unidentified Middle Eastern banker as saying.

Officials in Bahrain, Saudi Arabia, London, Abu Dhabi and Dubai reported the invasion has sent shock waves through the regional economy in the form of capital flight, rising insurance rates, inflation and a cash shortage among people trapped by the takeover.

Many Arab investors and foreigners are trying to transfer their money abroad, particularly to Switzerland and other Western nations, the report said. Arab central banks have imposed measures to insure that the flight of hundreds of millions of dollars remains orderly and does not become a panic.

Shipping insurance rates are soaring, kiting the price of all imported goods and raising the price of Saudi Arabian oil shipped out of the region.

The newspaper quoted a shipping executive in Jidda, Saudi Arabia, as saying war insurance rates have risen up to 2.5% of the value of a cargo, from a pre-invasion rate of zero, in some regions of the Red Sea and the Persian Gulf.

Bankers in the area said the Kuwaiti central bank held about 2.5 million ounces of gold, worth about $1 billion, before the Iraqis seized it Aug. 2.