The War's Aftermath • 355world, and many buyers accused the oil companies of withholding sup¬
plies to raise prices charged to the consumer.
For such countries as Saudi Arabia, Kuwait, and Iran, though, the sudden
spurt of oil income opened new vistas for economic development and po¬
litical leverage. But even the oil exporters had problems, as Western entre¬
preneurs jammed their hotels and the waiting rooms of government
officials, as ships loaded with machinery and consumer goods lined up
around the Gulf states' inadequate ports, and as poorer countries such as
Egypt (and the PLO) importuned them for economic assistance. Countries
without oil, including such Arab states as Jordan, the Yemens, and the Su¬
dan, could hardly afford the new prices. India, Pakistan, Bangladesh, and
other Third World countries had to shelve needed development plans just
to pay for oil. Europe, Japan, and the US all suffered higher unemployment
and price inflation in 1974. Such problems affected everyone who bought
from these industrialized nations or tried to sell to them. Arabs and Irani¬
ans invested heavily in corporate stocks and bonds, real estate, treasury
bills, and other forms of Western capital. At the rate they were acquiring
petrodollars, the oil-exporting countries (said some alarmists) could soon
own most of the world's assets. These fears proved unwarranted, but the
economic power of Saudi Arabia, Kuwait, Iraq, Iran, Libya, and the United
Arab Emirates continued to grow and to be translated into political—and
military—power. US arms sales to Middle Eastern rulers, to help pay for oil
purchases, reached $9 billion in 1977. Egyptians, Yemenis, Palestinians, and
Lebanese flocked to newly rich oil countries to find jobs and sent much of
their earnings to their families, changing their lifestyles.
PLO Power at Its Zenith
Foreign countries, hoping for better ties with the Arabs, backed the Pales¬
tinian cause more than they ever had before. Even though few had fought
in the October 1973 war, the Palestinians were gaining leverage over the
Arab governments. Many had already migrated to the oil-producing coun¬
tries to make a living and now contributed heavily to the managerial elite
and work force of such countries as Kuwait, where Palestinians made up
one-fourth of the whole population. The Kuwaiti government also con¬
tributed heavily to the PLO. In October 1974 the Arab heads of state, meet¬
ing in Rabat, recognized the PLO as the "sole legitimate representative of
the Palestinian people on any liberated Palestinian territory." Even King
Husayn conceded to the PLO the right to negotiate for the West Bank. The
UN General Assembly invited PLO Chairman Arafat to speak. It later rec¬
ognized the Palestinians' right to independence and sovereignty and