The net assets of countries in the Middle East with banks in the industrialised world fell by 1.3 per cent in the first quarter of this year to $137,354 million, according to figures released by the Bank for International Settlements (BIS). The biggest net change was a $3,500 million rise in the foreign liabilities of borrowers from Saudi Arabia. Algeria continues to trim its foreign debt, while Egypt's foreign reserves remain strong at just over $21,000 million.

Saudi Arabia and the UAE are the biggest borrowers among the Arab countries, but still lend more than they borrow by a considerable margin.

The BIS figures also show that international syndicated lending is picking up in the Gulf, particularly in Saudi Arabia. Saudi borrowers accounted for $1,800 million worth of syndicated loans in the first half of 1997, compared to only $300 million in 1996 and $800 million in 1995. Most Saudi syndicated credits are used for the financing of petrochemicals or power projects. The BIS figures do not cover all Middle Eastern countries. Qatar, for example, has borrowed a lot in the last year but is not reported.