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U.S. to Press Arab Nations to Pay Pledges Made to Palestinians

By Glenn Kessler
Washington Post Staff Writer
Saturday, February 26, 2005; Page A14

Secretary of State Condoleezza Rice plans next week to press oil-rich Arab nations to make good on hundreds of millions of dollars that were pledged to the Palestinian Authority -- but never delivered.

Her pitch will be made at a London conference Tuesday on Palestinian restructuring, U.S. officials said. The British government has invited many of the Arab countries to attend, and U.S. officials have made it clear that they expect at least some of the nations to announce they will fulfill past pledges.

Unmet Pledges

Arab League nations have pledged to support the Palesinian Authority, based on a formula, but most have failed to meet their pledges, according to Palestinian and U.S. officials.

Money owed to the Palestinians, in millions of dollars

Libya 148.4

Kuwait 140

Iraq 132

Egypt 105.5

Algeria 86.2

Morocco 64.5

Qatar 51.7

UAE 42.9

Yemen 23.1

Bahrain 19.8

Oman 19.8

Syria 19.8

Mauritania 13

Jordan 12.7

Tunisia 12.4

Saudi Arabia 0

Contributions made to the Palestinian Authority by Arab states in 2004

Saudi Arabia 92

Libya 11

Tunisia 2

All other 2

"They were told their checkbooks were invited and they could come along, too," said an administration official, speaking on the condition of anonymity because of the diplomatic sensitivities.

Saudi Arabia is the only Arab country that has fully met its pledges, which are essential to keeping the struggling Palestinian Authority afloat, according to Palestinian and International Monetary Fund calculations. In 2004, the Saudis provided more than 80 percent of all the Arab money provided to the Palestinians, while other wealthy states in the Persian Gulf region, such as Kuwait, the United Arab Emirates, Qatar and Bahrain, gave nothing.

The issue has been a sore point for both Palestinians and the United States. In November, former secretary of state Colin L. Powell wrote letters to each of the Arab countries, asking them politely to fulfill their obligations. But his letters were never formally answered, the official said.

Now, after last month's successful Palestinian election and the reduced tensions between the Palestinians and Israel, U.S. officials are making a new effort. Officially, next week's meeting is not a donors conference. But officials hope the momentum generated by collecting past pledges will prompt more generous contributions at a donors conference planned for later this year.

"Some in the region have been important contributors," Rice told reporters earlier this month. "Some in the region have not been as generous as they might be, and I think it is time for everybody to look deep inside and say, 'If we want the Israeli-Palestinian peace to be achieved and to sustain momentum, what more can we do in terms of assistance?' "

Nigel Roberts, director of the World Bank in the West Bank and Gaza, said the Palestinian Authority faces a $500 billion budget deficit in a planned $1.4 billion annual budget. Because Palestine is not a country, that gap cannot be financed on the world bond markets. "The Palestinians have enormous problems meeting their recurrent obligations," he said. "This money is certainly very welcome."

U.S. officials said they are especially focused on Kuwait, which has had a testy relationship with the Palestinian Authority because the late Palestinian leader Yasser Arafat backed Iraq after it invaded Kuwait in 1990. Palestinian figures show Kuwait, one of the Arab world's wealthy countries, is $140 million behind in its pledges.

Kuwaiti Ambassador Salem Abdullah Jaber Sabah said his country's foreign minister will attend the conference and is prepared to make a significant statement. "We have always said there has to be a government before we provide the money," he said. "A government was just approved this week, and now we are ready to do business."

The U.S. official said the Kuwaitis had privately said no money would be provided until a new Palestinian cabinet was approved and many of Arafat's cronies were removed. Those conditions have now been met, but "we've heard lots of words from the Kuwaitis over the years," he said.

U.S. officials have previously said that about $400 million was owed to the Palestinians and that only Saudi Arabia, Libya and Algeria had fulfilled their pledges. But the Palestinians have provided different figures to the United States showing that almost $900 million is owed, out of more than $1.2 billion pledged, with only the Saudis meeting their commitment.

U.S. officials have some questions about the Palestinian accounting -- which says Algeria owes $86.2 million and Libya $148.4 million -- but have chosen to use it as a guide for collecting the money. The Palestinian total also includes $132 million pledged by Iraq when it was ruled by Saddam Hussein and $105.5 million owed by Egypt.

Egypt is heavily involved in the peace process and has agreed to provide training for Palestinian police and security forces. But it does not have great oil wealth and typically cannot be expected to make huge cash infusions, Egyptian Ambassador Nabil Fahmy said.

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