Analysis: U.S. firms stay in Saudi Arabia

WASHINGTON, June 18 (UPI) -- The beheading Friday by terrorists of Lockheed Martin employee Paul Johnson in Saudi Arabia sets the stage further for a potential withdrawal of Western businesses, executives and workers such as Johnson, a helicopter mechanic.

The execution of the American worker comes closely on the heels of other recent attacks targeting not only Westerners but Americans in particular. According to analysts this is in part not only inspired by Islamist fervor but also by insurgent motivations aiming to disrupt the Kingdom of Saudi Arabia.

Secretary of State Colin Powell called the beheading "an act of barbarism." He said Johnson was simply an innocent man who was doing his job and trying to help people.

Sherard Cowper-Coles, Britain's ambassador to Saudi Arabia, warned that more attacks are "clearly possible." Speaking to the British Broadcasting Corp., the ambassador said, "I would go further than that and say they are probable. There is an active campaign, and we know that Westerners are targets."

Marc Sageman, a forensic psychiatrist and counter-terrorism adviser to the U.S. government, said Thursday "conventional wisdom" on terrorism is wrong, adding the "testosterone theory of terrorism" -- that of the terrorist as poor, angry and fanatically religious -- is a myth.

Sageman, a former CIA case officer in Pakistan and Afghanistan during the Soviet war in Afghanistan, is the author of the recently released book "Understanding Terror Networks."

During a presentation on his book, he said that the terrorists are applying some of the old communist logic that called for attacks on economic infrastructure based on the principle that "you wither away the state" to bring it down. A key target -- and somewhat easy targets -- for insurgents in Saudi Arabia are Western workers or those working with Western companies.

Since May armed gunmen have killed six contract employees working for an American company in the Red Sea port of Yanbu, murdered 22 civilians in a housing complex in the Eastern province city of Khobar, killed an American and an Irish BBC cameraman, wounded a correspondent and kidnapped an American in the capital Riyadh. For more than a year now, the number of attacks in Saudi Arabia have increased and are getting more brazen, openly taunting Saudi authorities.

There are tens of thousands of Western executives and workers currently situated in the country. These persons specialize in everything from businesses in the defense, telecommunications and energy sectors.

The recent spate of killings is leading companies to withdraw some employees or to rush toward trying to increase security.

But will Westerner business persons ultimately be driven out?

Afshin Molavi, a fellow at the New America Foundation, said, "It's almost unthinkable that the U.S. would withdraw entirely. I could see many workers leaving the kingdom, but it's such a rich relationship for so many defense contractors and oil companies that they'll do whatever they can to stay in."

He added, "I think what's important to remember about Saudi Arabia is that they really are the oil price setters. They are the central backbone of oil production, and they've usually used this ability -- because they're the only ones with significant spare capacity -- and they can raise the prices of oil if they cut back production, or lower it if they increase production."

He added that the reason the world has seen high oil prices has been a fear premium based on fears of instability, and because of an increase in Chinese demand. Most OPEC producers are producing at or near capacity. Only Saudi Arabia, the United Arab Emirates and Kuwait have surpluses.

"When you think of Saudi Arabia, you have to think of oil prices. They have a quarter of the world's proven oil reserves.

We could probably survive $70- to $80-dollar barrels for a little while, but the poorest countries wouldn't be able to survive," Molavi said. "Will defense contractors lose money? Yeah. Will oil companies lose some money if they leave Saudi Arabia? Yeah. But the real danger is the price on oil.

"I could see engineers leaving, I could see companies leaving. ... I would think that unless it got much worse, some of these companies would still try to keep a bare-bones staff. ... There are American companies there even beyond the defense and oil. There are something like 71 McDonalds, there's Starbucks. American cars sell very well in Saudi Arabia. You have these trading relationships that I think will go on unabated."

For now, however, there is the sad spectacle of a dead American, beheaded by terrorists, and the fear among those thousands still working in Saudi Arabia.

The Bethesda, Md.-based Lockheed said in a statement Friday: "All of us at Lockheed Martin are very saddened to learn the news of Paul M. Johnson Jr. and his tragic and senseless death. Paul was a valued and respected employee who bravely carried out his duties, and the news of his loss is a shock to everyone in the Lockheed Martin family."

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(With reporting from UPI International Editor Claude Salhani and correspondent Gadi Dechter in Washington.)