December 4, 2003	Thursday	Shawwal 8, 1424

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RIYADH, Dec 3: Saudi Arabia is reportedly withholding the one-billion dollar in loans and credits that it pledged last month for Iraq’s reconstruction until the security situation in the country is stabilized and a sovereign government takes office, officials of the United States and Saudi Arabia said this week.

The Saudi decision is a setback for the Bush administration, which has hoped the kingdom would set an example for other Arab governments by providing the vitally needed aid.

At a donors’ conference in Madrid last month, the Saudi government pledged to give Saudis willing to do business in Iraq $500 million in loans 0and $500 million in export credits over the next five years. The United States had hailed the commitment.

The money can’t go anywhere until there can be actual movement towards development, a Saudi official was quoted by Western press as saying.

The Saudis’ reluctance underscores how the violence in Iraq is feeding deep ambivalence in the Arab governments about the rebuilding efforts, Arab diplomats in Washington were quoted as saying.

In a gesture of support, the Arab governments have provided humanitarian assistance and begun rebuilding economic ties with Baghdad.

They have also taken the first step towards recognising the US-picked Iraqi governing council.

However, the US has constantly been blaming some of the Arab governments for having failed to secure their borders and prevent militants from entering Iraq. Reports say there has also been little response to the Iraqi Governing Council’s constant pleas for a quick return of the purported billions in Iraqi cash smuggled out by the former regime.

US officials say the ambivalence of regional governments reflects in part their fears that shifting US plans for Iraq may produce a weak and divided state, the first Shia-led Arab state in the region.

While some governments have started to take steps, “too many have stood on the sidelines, criticizing the US and remaining mute on the topic of the interim governing council,” said one US official.

Another US official said that Arab regimes were resigned to the US being in Iraq for a while. “But there are suspicions ... there are misgivings,” he added.

US officials continue to try to make the case to Arab regimes in Egypt, Syria and the Gulf that a stable, prosperous, democratic Iraq is in their interest.