RIYADH, SAUDI ARABIA, NOV. 28 -- Saudi Arabia, grateful for Moscow's support in the Persian Gulf crisis, has decided to lend the Soviet Union as much as $1 billion, according to a Saudi official, with additional financial aid likely from other gulf countries.
The Soviet news agency Tass said the Saudi loan would be part of a "financial cooperation program" between the two countries. Tass said the loan package would total $4 billion.
The Saudi-Soviet loan plan signals the beginning of what could be an important financial relationship for the hard-pressed Soviets as they shift to a market economy. Coupled with similar pledges of assistance from other gulf states and from Europe and Japan, the Saudi loan will help Moscow at a time when popular unrest in the Soviet Union appears to be growing.
News of the loan surfaced as the U.N. Security Council prepared to vote Thursday on a resolution authorizing the use of force to eject Iraq from Kuwait if it does not withdraw. The Soviet Union, while taking a firm line against Iraq's occupation of Kuwait, has not said publicly whether it will vote in favor of the resolution, although it is expected to do so.
The Saudi-Soviet accord is the latest in a series of pledges of economic aid to Moscow. Among them have been credits of about $1 billion from France and $1.5 billion from Spain for the purchase of food, plus credits of $6.3 billion from Italy. The Soviet Union and Germany also are discussing aid, such as food shipments, beyond the $10 billion promised by Bonn this fall to support and send home Soviet troops in east Germany.
Kuwait's ambassador to Moscow, Abdelmohsen Dueij, told a London-based Saudi newspaper, Asharq al-Awsat, that Kuwait was prepared to lend the Soviet Union $1 billion as part of a total $6 billion package from the gulf states. Saudi banking sources said a United Arab Emirates bank recently extended a $500 million loan to the Soviet Union. And the finance minister of Qatar is currently in Moscow, the Mideast Mirror reported.
Saudi economic assistance, first broached during a visit here last month by a Soviet trade delegation, was discussed in a meeting Tuesday in Moscow between Soviet President Mikhail Gorbachev and Saudi Foreign Minister Prince Saud Faisal, according to the Saudi source. He said Saudi Finance Minister Mohammad Abalkhail also is in Moscow.
The initial Saudi loan "may be in the billion-dollar range, but probably closer to $700 to $800 million," he said.
Soviet participation in the international anti-Iraq coalition has been crucial to its success. Iraq and the Soviet Union long have had close military, economic and political ties, but Moscow halted military deliveries to Baghdad after the Iraqi invasion.
On Monday, Gorbachev met Iraqi Foreign Minister Tariq Aziz in what the Soviet leader described as "a difficult talk, sometimes downright tough.
"All of a sudden a state barely out of a war, a neighboring state, an Arab power, just grabs and annexes its neighbor. What kind of policy is this?" Gorbachev said.
The Soviets' tougher line toward Baghdad was partly due to Iraq's failure to implement earlier promises to allow all Soviet citizens in Iraq to leave the country.
Saudi Arabia is aiding the Soviet Union in part because this Islamic country wants to buttress Gorbachev's policy of greater religious freedom for millions of Soviet Moslems, a Saudi official said. It also supports his efforts to introduce a market economy and take what one official here said was a more "responsible" position on Middle East issues.
When the Soviet minister for foreign trade led a delegation here in October, "they had asked for $2-3 billion" in aid, a Saudi official said. "They had pleaded poverty and said they had lost $20 billion in trade with Iraq" because of the gulf crisis, he added.