Riyadh, Saudi Arabia
With a decline in its oil revenues, Saudi Arabia's ability to provide financial support for a wide assortment of Arab countries and causes is on the wane. This is leaving an influence vacuum that Washington - or Moscow - may be able to exploit.
Saudi Arabia's budgetary squeeze, according to Western diplomats, Saudi officials, and independent businessmen in the kingdom, will be getting tighter as the price of oil drops and Saudi exports, at least for the near term, decline. Saudi domestic programs will be the last affected by the slowdown in the flow of petro-cash, diplomats and Saudi officials say; foreign aid is more likely to get cut first.
According to these sources, Saudi subventions will decrease in proportion to the geographic distance - and, in some cases, ideological distance - of the country from the kingdom. Troubled border states such as North Yemen, Sudan, and Iraq may still receive high levels of Saudi funding. But further afield, Syria, Lebanon, Morocco, Jordan, and the Palestine Liberation Organization may have to make do with much less.
In the past, Saudi Arabia has been rich and generous. It was not a ''front-line'' state in the Arab conflict with Israel, but it has given great amounts of aid to Jordan, Syria, Lebanon, and the PLO. Exact figures are not available, because often the aid is dispensed person-to-person, palace-to-palace , or through sub rosa channels. Saudi funding has helped Jordan equip its Army, has bolstered Syria's creaky economy, and has kept Yasser Arafat's centrist Al-Fatah organization supreme within the PLO.
Because its part in the Arab-Israeli conflict has been financial rather than military, Saudi Arabia has followed a political course of supporting the Arab consensus with regard to war or peace with Israel. Saudi Arabia has never been among the most bellicose toward Israel, but neither has the kingdom advocated or even supported what many Arabs see as radical peace efforts such as Camp David. King Fahd's peace plan, which served as the basis of the ''Fez statement'' promulgated at the Arab summit conference last year, is a moderate, consensus view of Arab leaders (minus Egypt) and is open to a wide variety of interpretations.
Its oil wealth has made for this pro-Western, Sunni-Muslim monarchy at least temporary friends of ideological and religious opposites: anti-royalist Baathists, nationalists, socialists, pro-Soviet countries (Syria and Iraq), Christian and Alawite-Muslim Arabs. Groups that otherwise might have turned on the Saudis have either been put on good behavior by Saudi largess or by anticipation of same.
But this may not last as Saudi financial power is on the decline, at least temporarily.
''Right now,'' says a Western diplomat in the kingdom, ''the Americans are looking at Saudi Arabian political influence with regard to Palestinians and Syrians: There has been a direct correlation between Saudi Arabia's economic status and its political status.''
In this diplomat's view, Saudi Arabia has exercised a moderating influence on these groups and thus helped to stabilize the Middle East and, if not orient Arab countries toward Washington, at least keep Moscow's influence at bay. Israeli officials disagree with this view, however, and argue that Saudi financial support of Syria and the PLO has enabled them to buy weapons and otherwise carry on their military confrontation with Israel.
Either way, the status quo is undergoing a change today. Saudi oil revenues are dropping sharply. Thus money to support, influence, or arm other countries and causes will also fall. For better or worse, this will upset the current Middle East balance. A diplomat notes that Saudi aid, or the prospect of Saudi aid, has worked only to influence in one direction; it has never been withheld to cause pressure. ''It works only up,'' he says, ''not up and down. We don't know what might happen as it goes down.''
In many cases, Saudi aid has coincided with US support for Arab moderates. Jordan, Morocco, Lebanon, Sudan, and North Yemen, which all receive high levels of Saudi assistance, also are high on Washington's foreign-aid list. Already, however, an American diplomat reports, the Saudis ''are becoming less eager to help us outside their own immediate interests.''
Thus, the US may have to increase foreign aid to Middle East allies. And this may be a difficult task at a time of federal budget - and especially foreign-aid - cutting in Washington. But the alternative would seem to be a vacuum into which Soviet influence could expand. In particular, Soviet influence could expand with Syria and the PLO, both of which already have extensive working relations with Moscow.
Jordan's King Hussein, too, has recently made more frequent visits to Moscow. Warming relations between Iraq and the Soviet Union also are being noted. Realizing this, the Saudis, an American diplomat says, ''in some ways are beginning to see America as more important to the kingdom than in the past.'' What the Saudis and the Americans share is a desire to support moderation in the Arab world.
Aiding Arab moderates could give the US greater standing not only with these countries but also with their old patron, Saudi Arabia. But this changing pattern will not occur overnight, this diplomat says. Instead it will take perhaps two years and continued low oil revenues in the kingdom to forge a new economic and political order in the Middle East.