Economic Aftershocks Rattle Through Middle East : Region: Billions of dollars are flowing out of richer nations. Poorer countries find that crucial commerce is impeded and more workers are being put out of work.

As tensions escalate in the Persian Gulf, the economic ripple effects are starting to take a toll in the region, with billions of dollars being withdrawn from local banks, investment plans suddenly placed on hold and hundreds of thousands of expatriate workers facing the loss of jobs.

“Any investments people have been contemplating or any commitments they wanted to make in the area are being shelved right now,” said Nofal Barbar, executive vice president of UBAF Arab American Bank in New York, which has dealings throughout the Middle East.

For poorer nations such as Egypt, which has sent more than 1 million workers to Iraq and Kuwait, the crisis is interrupting a vitally important source of salary income.

“I would guess that now any Egyptian in the country (Iraq) is finished” as an employee, said Graham E. Fuller, a scholar on the Middle East at the Rand Corp.

In disparate ways, the crisis is impeding business throughout the Persian Gulf and nearby nations.

Vast amounts of money have been pulled out of wealthy banks in the region and plowed into Western currencies, such as the U.S. dollar, Swiss franc and British pound sterling, bankers said. Estimates vary as to the magnitude of the capital flight. But by some accounts it has been enormous and threatens difficulty even in a region that is the very symbol of extravagant wealth to much of the world.

“In Saudi Arabia you’re probably looking at $30 billion of funds in banks that have gone to the West,” said one source who has frequent dealings in the Middle East. “The estimate is that $6 billion has gone out of Dubai alone. It’s a dramatic impact.”

Shippers, who have observed the international embargo on Iraq, also report an impact on their operations. Sea-Land Service Inc., which operates the largest U.S. fleet of ocean-going cargo ships, said Monday that it had not shipped any cargo destined for or originating from Kuwait and Iraq for the past 10 days.

“I’m not sure how people would get cargo out of there,” said company spokesman William Summers, at its Iselin, N.J., headquarters. “I’m not sure anyone in the U.S. is moving cargo into that region.”

Shippers also have reported a sharp rise in cargo insurance rates, reportedly more than a doubling in some cases. In other cases, companies that seek to maintain their Middle East operations are seeking insurance for political risk, a kind of coverage that offers compensation for such problems as having property confiscated by governments.

Businesses in Turkey, Saudi Arabia and the United Arab Emirates, for example, have shown new interest in such political risk coverage, said Francis Boylan, a vice president at Alexander & Alexander, a New York-based insurance broker.

The crisis has hit at a time when Saudi Arabia and such oil-rich neighbors as the United Arab Emirates, Bahrain, Oman and Qatar had plans for $40 billion in petrochemical and energy developments, said J. R. AbiNader, president of the National U.S.-Arab Chamber of Commerce in Washington.

“All of those are now being re-evaluated,” he said. “All of those are now being put on hold.”

Still, some investors said their plans are on course.

The Saudi Arabian oil company, Aramco, said Monday that it will go ahead with a $6-billion project--overseen by the Irvine-based engineering firm Fluor Corp.--to refurbish and expand some Saudi offshore and onshore oil and gas plants.

“We just awarded some projects in the past few months, and people are proceeding as if things are normal, even if there is great deal of tension,” said an Aramco spokesman.

The crisis, meanwhile, is creating new economic headaches for some of the region’s less well-off nations, including Jordan, Egypt and Turkey.

Jordan stands out as a loser, Mideast analysts said. An importer of oil, Jordan faces a higher fuel bill and stands to lose from the United Nations’ embargo against Iraq, which is a major Jordanian trading partner. Moreover, 30% to 40% of Jordan’s work force has been employed in Kuwait in recent years.

“Now those people don’t have an income,” observed Kenneth W. Stein, professor of Middle Eastern history and political science at Emory University in Atlanta.

Egypt also is likely to pay a price. During the Iraq-Iran war, at least 1 million Egyptians took jobs in the fields and factories of Iraq, sending home $2 billion to $3 billion in income a year, AbiNader said. The desperately needed cash was supplemented by $800 million to $1 billion in earnings by 150,000 Egyptians in Kuwait.

Turkey may take an economic hit, as well. This week, Turkish treasury officials estimated that the nation may sacrifice $4 billion, largely because of the loss of fees from its oil pipeline formerly used by Iraq and hundreds of millions of dollars in foreign trade with Iraq.

Although Kuwaiti government officials in exile have promised to help reimburse Turkey for its financial losses, Turkish officials are nervous. “We don’t know anything” about being reimbursed, said a Turkish embassy official in Washington. “There is no official statement.”

The bitter political rifts also threaten the economic well-being of the Palestinians, some experts said, because PLO leader Yasser Arafat is supporting Iraq against some of the region’s most wealthy countries. As a result, it is not clear how generous some of these wealthy Arab nations will be toward financially dependent Palestinians.

“Does Arafat’s decision have an economic ramification for a Palestinian living in a refugee camp in Beirut? The answer is yes,” Stein said.

At the other extreme, the hostilities may benefit Iran, Iraq’s erstwhile foe.

Iraq’s decision last week to seek peace and withdraw troops from captured Iranian territory might allow Iran to reduce military spending and shift resources to strengthen its economy--once the most diversified and robust in the Middle East, said a State Department official who requested anonymity.

For many nations in the Middle East, the economic impact of the crisis depends mostly on the answer to one question: Do they export or import oil?

Those that do--such as Saudi Arabia, Bahrain and Oman--ultimately stand to reap the rewards of higher crude oil prices. But those that don’t--particularly Jordan--face hardship. “In terms of the most significant (economic) effects, oil exporters win and oil importers lose,” said Sharif Ghalib, a director at the Institute of International Finance in Washington.

But it appears that no nation can count on immunity from economic disruptions. Higher oil prices could trigger a worldwide recession, cutting demand for oil, and even the wealthy Saudis might find it harder to attract the Western employees who play key roles in their economy.

“The Omanis, Bahrainis, Saudis are all totally dependent on Western technicians,” said Richard Drobnick, director of USC’s International Business Education and Research Program. “It will be just more difficult to recruit mid-level technicians and laborers, and they will have to make it much more attractive financially to motivate Americans or Europeans to go there.”