Pakistan Aid Effort Hits Saudi Hurdle

Saudis appear reluctant to pledge aid

The United States’ efforts to raise US$4-5 billion for Pakistan at an aid conference in Tokyo on Friday is coming into conflict with Saudi Arabia, which is showing only muted interest in supporting President Asif Ali Zardari, a major American newspaper reported on Wednesday. Citing officials involved in the deliberations, The Wall Street Journal said Riyadh had close ties with PML-N chief Nawaz Sharif, who had emerged as a serious challenger to Zardari.



The Obama administration is seeking to help Pakistan raise $4 billion to $5 billion at an international aid conference in Tokyo Friday in a bid to stabilize the finances of the key counterterrorism ally.

Washington's effort, however, is coming into conflict with Saudi Arabia, which is showing only muted interest in supporting Pakistani Prime Minister Asif Ali Zardari, according to people involved in the deliberations.



Riyadh has close ties with opposition leader Nawaz Sharif, who has emerged as a serious challenger to Mr. Zardari. Mr. Sharif, a former prime minister, spent much of nearly a decade in exile in Saudi Arabia, before returning to Pakistan in late 2007.

"The big outstanding question about the conference is Saudi Arabia," said a senior official involved in the aid discussions. "They are closely aligned with Sharif."

Pakistan appears certain to get at least $4 billion from the conference. If Saudi Arabia doesn't contribute to that total, it could undermine Islamabad's efforts to meet its financial obligations. Last November, Pakistan was forced to turn to the International Monetary Fund for $7.6 billion in loans to avert a balance-of-payments crisis.

A pass by Saudi Arabia would also send a signal that it doesn't support the Zardari government. Mr. Sharif's political capital has increased significantly since opposition protests last month led to concessions by Mr. Zardari -- including an invitation to join his party's government, which the opposition leader has so far declined.



Saudi Arabia has traditionally been among Pakistan's largest aid donors and strategic allies. During the 1980s, Saudi Arabia cooperated closely with Washington and Islamabad to expel Russian troops from Afghanistan.

In recent years, however, the U.S. and Saudi Arabia have taken differing positions on Pakistan's leadership. In late 2007, Riyadh negotiated a deal with former Pakistani President Pervez Musharraf, without seeking American consent, that allowed Mr. Sharif to return home, according to U.S. and Saudi officials.

The U.S. has long voiced skepticism about Mr. Sharif, citing his ties to Islamist parties. Mr. Zardari leads Pakistan's largest political party, which is secular and largely viewed as pro-Western.

Saudi officials have voiced reservations in general about providing aid through multilateral forums because of a lack of assurance on how the money will be spent. Saudi Arabia is also giving Pakistan 80,000 to 100,000 barrels of oil per day. With oil at around $50 per barrel, this equals roughly $5 million in aid per day.

Saudi Arabia is sending a delegation to the Tokyo conference, and an Arab diplomat said he would be "surprised" if Riyadh didn't pledge some money.

The U.S. and Japan are each expected to pledge $1 billion to Mr. Zardari's government Friday, according to the officials involved in the negotiations. The European Union, the U.K. and the United Arab Emirates are each expected to pledge as much as $500 million.

"This support is crucial to assure the Pakistani people that the international community is supporting its fight against extremism," said Husain Haqqani, Pakistan's ambassador to the U.S.

The Obama administration is developing benchmarks that Pakistan must meet to receive continued assistance, something Mr. Zardari's government is fighting. Washington wants to see Islamabad's sustained commitment to democracy and the fight against al Qaeda.

In addition to the $1 billion expected to be pledged Friday, the U.S. Congress has committed to provide $7.5 billion to Islamabad over the next five years, provided it meets these benchmarks.