A U.S. pledge to give $3 billion in military and economic aid to Pakistan over the next five years is a financial boon to the country's recovering economy, and a political gold mine for its military leader.

The aid package — which will be spread out over five years, roughly the time remaining in President Gen. Pervez Musharraf's (search) term as head of state — was a reward for Musharraf's strong support for the U.S.-led war on terrorism.

"It is certainly positive for Pakistan in both symbolic and economic terms," said Asif Quereshi, an economist at the Global Securities (search) brokerage house in the southern port city of Karachi (search). He added that being in Washington's good graces would likely make the country more attractive to foreign investors.

Mohammed Sohail, the head of economic research at Investcap Securities (search), another brokerage based in Karachi said the aid demonstrates that the strong relationship between the two countries "will remain on track for a longer term."

It didn't always seem that way.

In one of the great political flips of recent history, Musharraf rescinded his government's support for the Taliban and backed the U.S. effort to destroy Al Qaeda and oust the hardline Afghan regime in the wake of the Sept. 11, 2001 terror attacks.

Washington, in turn, went from keeping Musharraf — an army general who seized power in a 1999 coup — at arm's length to embracing him as an important ally. Ahead of Tuesday's meeting at Camp David, White House spokesman Ari Fleischer said the American president views Musharraf as "a strong leader who is aggressively fighting terror."

Pakistan has arrested more than 500 Al Qaeda suspects — including several big fish — and turned them over to the United States. It has also recently moved troops into lawless tribal areas on its border with Afghanistan in an effort to block escape routes for Al Qaeda leaders and prevent terrorists on this side of the border from crossing back into Afghanistan to carry out attacks.

The strong measures have put Musharraf into a bind at home, where a resurgent coalition of Islamic parties has won support by criticizing the president's close ties with the Americans. They and other opposition groups are pressing him to loosen his grip on power by agreeing to give up his post as armed forces chief, but Musharraf has refused.

Musharraf's support for the United States also angered Islamic militants, who are suspected in a series of bloody attacks on foreigners and minority Christians here that killed dozens before recently abating.

Pakistan initially suffered economically because of the military operation in Afghanistan, but foreign aid — including a previous decision by Washington to forgive $1 billion in bilateral debt — has helped put the economy back on track. The economy is now growing at a robust 5.1 percent per year, according to the Central Bank.

In addition to the $3 billion Pakistan aid proposal that President Bush has pledged to present before Congress, the United States and Pakistan are also to sign an agreement during Musharraf's visit to expand economic partnership and promote investment.

As part of the package, Pakistan will receive $600 million in yearly installments, half of which will go for defense purposes and the other half for economic development. Some of that money can also help retire Pakistan's foreign debt, according to the Finance Ministry.