Background
The United States is a global economic superpower with significant investment in various countries around the world. One of the primary countries where the US has had strong ties since World War II is Saudi Arabia. The United States has been involved in trade, economic development, military training, and political support to the Kingdom. The US has sold weapons to Saudi Arabia, sent troops to its borders, and provided economic aid for development. With all of this investment, one may wonder: How much money does the United States owe Saudi Arabia?
Data
A quick search of the US Debt Clock shows that as of June 2021, the United States owes $21.5 trillion to its foreign entities. This total amount includes both our total debt to foreign governments and private entities. It is not possible to break down this amount to show how much of the debt is owed to Saudi Arabia specifically. However, we can guess that it is a large portion.
Perspectives from Experts
Economists are divided on the issue of how much the US actually owes to Saudi Arabia. Some argue that we may have a significant debt load to the Kingdom due to past trade deals, military agreements, and economic aid packages. Others point out that Saudi Arabia has continuously invested in US debt instruments, thus making them one of the largest holders of US debt.
Analysis
It is difficult to ascertain precisely how much money the US owes to Saudi Arabia, but looking at the data available, it is safe to assume that it is a significant portion. The United States has invested heavily in the country, and Saudi Arabia has continually invested in US debt instruments. This implies that our debt to them may be far greater than just the direct investments in the past.
Business
The United States’ investment in Saudi Arabia is both reaffirming of the long-standing relationship between the two countries, and indicative of their mutual interest in profiting from the business partnership. Whether through the United States’ use of Saudi oil, or through the continual support for the US economy through debt holdings, there is no question that the United States has given much more to Saudi Arabia than the reverse.
Repercussions
The US’s debt to Saudi Arabia could have serious implications for US-Saudi relations and the US economy. Many economists fear that the US’s current debt level to Saudi Arabia could cause a major economic crisis. This is supported by the fact that Saudi Arabia is the US’s third-largest foreign creditor, and any major disagreement between the two countries could cause major upheaval in the US debt market.
Strategies
In order to mitigate some of the economic risk posed by the US’s debt to Saudi Arabia, it is important for the US to focus on working with the Kingdom to pay down some of the debt. This could be accomplished through a combination of debt refinancing, debt restructuring, and debt forgiveness. If this can be achieved, then it could reduce the risk of an economic disaster for both countries. Additionally, it would be wise for the US to take further steps to protect its investments in Saudi Arabia such as requiring more transparency from the Kingdom and investing only in projects that have clear long-term economic value.
Political Landscape
The US relationship with Saudi Arabia plays an important role in the political landscape of the Middle East. The US needs to remain committed to its strategic relationship with the Kingdom in order to ensure its security interests in the region are protected. This includes continuing to provide military and economic aid in order to support the Kingdom’s stability. At the same time, it is important for the US to ensure that it is not overextending itself in the region and that it is taking into account the long-term economic impact of its investment in Saudi Arabia.
Ongoing relationship
The US relationship with Saudi Arabia is a complex and nuanced one with many layers. There are economic, political, and social implications of the investment the US has made in the Kingdom. Despite the uncertainty of how much the US owes Saudi Arabia, it is clear that the two countries will remain closely linked for the foreseeable future. It is therefore important for both countries to ensure that all investments made are beneficial to both parties and that they are paying off in the long run.
