A Stalemate Leads to Strain

The cooling relationship of Egypt and Saudi Arabia

"I cannot set a date," said Egyptian President Anwar Sadat, "but I am sure of one thing. Sooner or later we shall be signing an agreement." Later would appear to be a stronger bet. Secretary of State Cyrus Vance announced last week that the slow-moving talks would resume at an unspecified date. But the issue of linkage--that is, relating Israeli withdrawal from the Sinai Peninsula to political changes for the occupied West Bank and Gaza Strip--remains a major stumbling block.

Sadat, who announced that he will not show up in Oslo this month to receive his Nobel Peace Prize, had particularly good reasons to be concerned about the stalemate. The relationship between Egypt and its chief bankroller Saudi Arabia, which lies at the heart of Washington's hopes for Middle East stability, has reached its lowest ebb since the mid-1960s, when Egypt's Gamal Abdel Nasser and Saudi Arabia's King Faisal backed opposing sides in the Yemeni civil war. TIME Cairo Bureau Chief Wilton Wynn, who knows both countries well, offers some insights into the cooling friendship:

What a way for friends to talk about each other. Cairo radio accuses the region's oil potentates of amassing wealth in secret foreign bank accounts and ignoring the needs of their own people. An Egyptian editor suggests aloud that Saudi Arabia has "turned to the Soviets to become a member of the Warsaw Pact," adding: "Have the Russians given

Saudi Arabia a secret interpretation of Communism conforming to the teaching of Islam?" Publicly the Saudi leaders are keeping their cool; privately they are enraged at the Egyptian attacks. "When Sadat dies," sneers a Saudi businessman, "the Egyptian people will dig up his bones and piss on them." At the root of the quarrel is Sadat's bitterness at the Saudis for failing to support the Camp David accords. With Saudi help, Sadat believes, at least one or two other moderate Arab states could be enticed into joining or supporting the peace process, and that in turn could eventually lead to a wider peace. The Saudis answer that they have done the best they could to defend the Egyptians against attacks by the more radical Arab states. They consider the Egyptian press excesses to be gross ingratitude.

Despite their hurt feelings, the Saudis insist they will not cut off Egypt without a dime. But they are not likely to be as generous as they were in 1977, for example, when they reportedly provided Cairo with around $1 billion in aid. "We deal on the basis of principles, not emotions," says Saudi Information Minister Mohamed Abdou Yamani. "No matter what has happened, our relations with Egypt remain the same." A Saudi newspaper editor in Jidda is more blunt. "Sure, we will let the Egyptians attack us and insult us," he says. "Then they will send us a letter demanding to know why the check is late. And then we will send the check."

The quarrel comes at a time when Saudi Arabia is in no mood to be generous with anyone. Saudi Arabia has the world's largest proven oil reserves (an estimated 150 billion bbl.) and a staggering $70 billion in net foreign assets. Because of worldwide inflation, slumping oil sales and the decline of the dollar, however, Saudi Arabia is financially embarrassed at the moment. Since June its reserves have dropped by about $3 billion. That will still leave the country with a surplus this year of $7 billion (vs. $17 billion in 1977). But it reminds the Saudis that their wealth is not limitless.

Already Saudi Arabia has begun tightening belts by cutting spending by 30% and foreign aid by 25%. Foreign contractors in Saudi Arabia now have to wait four to six months to get paid. One example of the new tightfistedness: when the U.S. Congress approved the sale last May of 50 F-5E warplanes for Egypt, the U.S. blithely assumed that the Saudis would pick up the tab. Since then the estimated price of the planes has jumped from $590 million to $730 million or more --and the Saudis have let it be known that they will pay something less than half the bill. Who pays the rest? The likeliest pigeon is Uncle Sam.

None of this means that Saudi foreign policy is taking an abrupt shift to the left. The Saudis fear that a radical regime dangerous to Saudi security could emerge either in Iran if the Shah should be overthrown, or in Egypt if Sadat were to be ousted. So they have little choice but to support him. Similarly, they cannot afford an open break with the U.S., on whom they depend almost totally for their security. At the next OPEC meeting, which begins Dec. 16, the Saudis will try to maintain the freeze on oil prices for another year. But they have already advised the U.S. that they will not risk an open break with other OPEC members, as they did in 1976. Saudi officials speak privately about the need for a small annual increase of perhaps 5% to avert the shock of a major rise in years to come. Whatever stand they take at this month's meeting, the Saudis will try to make it palatable to the U.S. "We don't do this for your sake," says Yamani, "nor do you befriend us for our sake. The fact is that we have mutual interests that hold us together."

Saudi leaders have been trying hard to convince Washington that they remain the best of friends. Crown Prince Fahd, the de facto Prime Minister, was upset by speculation in the U.S. that he had joined the hard-liners at the Baghdad summit conference of Arab leaders last month. In truth, Saudi leaders contend, they played an important moderating role at Baghdad and successfully defended Sadat against his Arab enemies.

The Saudis feel they are caught in a squeeze between the other Arabs on the one hand, and Sadat and the U.S. on the other. Prince Fahd is known to believe that he could not possibly persuade other Arabs to support Camp David or a separate peace between Egypt and Israel. To go too far in backing Sadat would invite a wave of radical Arab terrorism, aimed not only at the oil installations but at the royal family. Fahd is convinced that Washington will not understand this, and that members of Congress will begin clamoring for the U.S. to cancel sales of F-15 warplanes to Saudi Arabia. The Prince asks: "What good would it do America for us to commit suicide?"

The Saudis have made it clear to Sadat that the extent of future support will depend, in no small part, on the degree to which Sadat succeeds in linking the Egyptian-Israeli peace treaty with an overall settlement. For that reason Sadat is pressing the Israelis to agree in the treaty to a specific timetable for negotiating the future of the West Bank and Gaza.

As for the Egyptians' ingratitude, the Saudis have taken to quoting a saying from the Koran: "If you shall be thankful, I shall increase my bounty." Hinting that his country will not abandon the Egyptians entirely, Saudi Foreign Minister Prince Saud al Faisal likes to recall a time when Nasser savagely attacked King Faisal for months on end. Nasser suspended his attacks just long enough to ask Faisal to give him $10 million so that several thousand Egyptian pilgrims could go to Mecca. The King was annoyed at the shamelessness of the request, but in the end he agreed. After all, he reasoned, why shouldn't he help poor Muslims to reach the Holy City?

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