Politico reports:

President Donald Trump is counting on money from the Gulf Arab States to power his economic golden age. But as the war with Iran nears its fifth week and the regional economy enters a free fall, hundreds of billions of dollars that Middle Eastern governments have pledged for U.S. projects are under threat.

That has the Trump administration concerned that Gulf leaders may not be able to fulfill promises to invest heavily in the U.S., according to three people familiar with the internal conversations, including one former administration official, granted anonymity to discuss them.

“What has really freaked people out is that the Gulf Arabs have warned that they’re a couple weeks away from having to repatriate tens of billions of dollars in investments from the United States,” said one of those people. “When these guys do that, it is going to be immensely destabilizing and contradictory to the president’s investment goals.”

Any pullback on investments from Middle Eastern governments will limit the amount of capital available to U.S.-based tech startups, investment firms and big businesses that have come to rely on the region’s sovereign wealth funds and government-backed investment vehicles as a key source of cash.

But the effective closure of the Strait of Hormuz has largely choked off oil and gas revenue that support Gulf-based financial institutions that are a major source of global capital. And Iran’s attacks on critical infrastructure and flashy highrises have brought tourism to high-dollar destinations like Dubai and Doha to a standstill.

“The Middle East is essentially closed,” said a top executive at an asset management firm that’s received significant backing from the Gulf, also granted anonymity to speak candidly. Companies will be looking “outside of the Middle East for capital in the short run.” [Continue reading…]