Saudi charity spending down 40 pct on "terror" fear

RIYADH, Dec 3 (Reuters) Saudi funding to charities has fallen by 40 per cent after the September 11 attacks as Muslims fear falling foul of strict US efforts to monitor ''terror funding'', the head of a leading Saudi charity said this week.

Saleh Wohaibi, secretary-general of the Saudi-based World Assembly of Muslim Youth (WAMY), said total funds collected in the oil-exporting Gulf region do not exceed 1 billion dollars a year.

He said this was miniscule compared to annual US charity spending and the wealth of the oil and gas-producing region, where the world's top exporter Saudi Arabia is forecast to earn a record 203 billion dollars in oil revenues for 2006.

''If you take WAMY, the reduction goes up to 40 per cent, if you compare 2001 and 2003/4,'' he told Reuters in an interview.

WAMY spent some 28 million dollars in the Islamic year ending February 2004, its annual report showed.

''After 9/11, everything shrank when it comes to Islamic work, humanitarian work ... People are frightened. They stopped giving any money, almost all of the business people ... We have to go and collect riyal by riyal,'' he said.

Under pressure from the United States, Saudi Arabia shut down one of its largest charities, Al-Haramain Foundation, in October 2004, and stopped others from sending money abroad as part of a drive to strangle the al Qaeda network.

Fifteen of the 19 al Qaeda hijackers who attacked US cities on September 11, 2001 were Saudis. US officials have complained that wealthy Saudis remain a key source of funding for militants.

''The richest region in the Muslim world is the Gulf region, and if you take the whole amount of money collected by Gulf organisations it will never exceed one billion dollars,'' he said, adding Gulf government spending globally was minimal.

Wohaibi said Washington was still pressuring Muslim charity operations. ''They are suspicious of everything that is not American, they are even suspicious of European organisations.'' This year Washington said Saudi money was flowing into Somalia, the Horn of Africa country it fears could become a centre of al Qaeda-backed Islamic militancy.

''We have an office in Somalia. If there is any work that is not acceptable the Americans know it,'' Wohaibi said.

Saudi Arabia, the birthplace of al Qaeda leader Osama bin Laden, has been battling a campaign of violence by al Qaeda supporters.

REUTERS LL RAI0840