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Foreign Relations of the United States, 1958–1960
Volume XIII, Arab-Israeli Dispute; United Arab Republic; North Africa, Document 339


339. National Security Council Report11. Source: Department of State, S/P–NSC Files: Lot 62 D 1. Secret. A cover sheet, a note from Lay to the members of the National Security Council, a table of contents, Annexes A–D, and a Financial Annex are not printed. Approved by the President on March 15, NSC 6004/1 incorporated the Council’s revisions pursuant to its March 10 meeting (see supra) and superseded NSC 5716/1. Regarding NSC 5716/1, see footnote 2, Document 333.

NSC 6004/1

STATEMENT OF U.S. POLICY TOWARD LIBYA

General Considerations

1. The underlying situation in Libya, an essentially artificial creation held together chiefly by the institution of the monarchy, is unstable. Because of strong separatist tendencies among the three provinces, uncertainty as to the succession to the throne, and growing republican sentiment in the cities, the death of King Idris may precipitate a chaotic free-for-all which could go so far as to lead to the country’s breakup. The competition for influence in Libya between the UAR and Britain, and the prospect of large oil revenues, are further unsettling factors.

2. Because of the extensive U.S. and U.K. military facilities in this strategically located Mediterranean area, and because Libya is becoming a major new source of oil, reducing Europe’s dependence on the Middle East, the outcome of this instability is of considerable importance to the United States.

3. King Idris is the main source of power and the principal unifying force in Libya, because only he is able to control both the federal and provincial governments and he is the only figure commanding anything resembling countrywide loyalty. The provincial governments frequently oppose the federal government, and indeed the King often supports them (particularly in Cyrenaica) against the federal authorities. The King’s principal following is among rural tribal elements and conservative city politicians. There is little loyalty to him among the younger urban elements who do not now have significant political power but who will have such power in the future. Although there are no overt political parties in Libya, there are a number of loose political factions and interest groups and Pan-Arab nationalism has considerable appeal, particularly to the younger urban elements (including labor leaders). Developments arising out of the country’s new oil wealth will almost certainly disturb the relatively stable political equilibrium which King Idris has maintained among these factions and groups. The attitudes of the urban elements will be significantly affected by the government’s success in (a) fostering economic development and expanding economic opportunities for individual Libyans, and (b) curbing the temptations to ostentation and graft inherent in large oil revenues.

4. Particularly after King Idris leaves the scene, the status of Western bases in Libya is likely to become precarious. Our military position there derives from a Base Agreement which was signed September 9, 1954, and which is terminable December 24, 1970.22. See Annex A for summary of U.S.-Libyan Military Agreements. [Footnote in the source text.] The principal U.S. military facility in Libya is Wheelus Air Base near Tripoli, with its gunnery and target ranges and ancillary installations. Although the requirements for the use of this base in general war are considered to be relatively unimportant, there is (a) an important peacetime military requirement for its use for an indefinite period and certainly through the duration of the present base agreement, and (b) a limited war requirement for its use, along with other associated facilities in Libya, as a possible staging base for operations in the Middle East. The peacetime requirement stems primarily from the fact that our Libyan facilities provide the most suitable available location for live bombing and missile training in the area of CINCEUR’s responsibility. In addition there are certain U.S. port, navigational, and communication facilities and rights, which will be of continuing importance to U.S. military operations in the area. We recognize, however, that the Libyans may not permit us to use their territory for staging operations which are directed against, or involve, any other Arab States.

5. Although the full extent of Libyan oil reserves is not yet known, strikes made to date indicate that the country will become a major new source of oil and possibly gas. Fourteen companies from six Western countries33. U.S., U.K., West Germany, France, Italy and The Netherlands. [Footnote in the source text.] have concessions in Libya. More than half of these companies are U.S.-controlled.

Libya’s Relations with Other Nations

6. The United Kingdom exercises considerable influence over the King and the Libyan Government because of historical associations and because of the British commitments to assist in the defense of the country and to provide military and economic assistance.44. See Annex B for text of U.K.-Libyan Agreements of 1953. [Footnote in the source text.] Approximately 4,500 British troops are now stationed at various strategic points in Libya, and the United Kingdom is committed to provide (a) an annual economic subsidy of $9.1 million through 1963 in return for the right to station its troops and use air bases there, and (b) the light equipment and most of the training for a 5,000-man Libyan Federal Army. The presence of U.K. forces and their potential use in the event of an upheaval contributes to the maintenance of internal security in Libya. In the immediate post-Suez period the United Kingdom was prepared to reduce drastically its stake in Libya and began a phased withdrawal of troops from the country, hoping to evacuate all of them by March 1959. At the same time the British indicated an intent to reduce their annual payment under the Anglo-Libyan treaty from about $11 to $3.5 million beginning in 1958. However, following strong Libyan representation in April 1958 they agreed to an annual level of $9.1 million for five years. Further, after the Iraqi revolution and the Jordanian crisis in the summer of 1958 the British reassessed Libya’s value, particularly in view of their loss of base and overflight facilities in Iraq. As a result of this reassessment and in response to a Libyan request, they halted the withdrawal and rebuilt their Libyan garrison to 75 per cent of its pre-Suez strength. The British now consider Libya strategically important because: (a) it is a potential producer of sterling area oil which need not transit the Suez canal or Near Eastern Arab territories, (b) it provides access by air to Africa, and (c) it is a staging area for Middle East military operations. Although they would be reluctant to intervene with force in Libya to maintain a regime favorable to their interests, they would probably do so if it seemed the only way to preserve their position.

7. The United States stepped up its military and economic assistance to Libya in 1958 to coincide with the British withdrawal, and U.S. influence in Libya today is comparable to that of the U.K. Our relations have been considerably smoother in Libya than in other Arab countries. We have in general enjoyed a good degree of cooperation from the Libyan government, which has permitted an unrestricted use of our base facilities, has cooperated readily in security measures to protect our personnel, and has given such support to our international policies as it has felt it could reconcile with its avowed policy of non-engagement in power struggles. For instance, when Libya established diplomatic relations with the USSR in 1956, the then Prime Minister and King Idris gave us assurances that certain facilities and privileges would be denied the Soviet Bloc. To date these assurances have not been violated, although it is not clear that the present government would consider itself bound by them. The Libyans also gave strong support to the American Doctrine for the Middle East in 1957 and, swimming against the Arab tide, established relations with Nationalist China in 1959. More recently difficulties over the amount and terms of our aid and over the privileges of U.S. official personnel in Libya have been a source of considerable friction. The arrival of large numbers of non-official personnel as a result of petroleum development (there are an estimated 2,000 non-official Americans in Libya today) could create further problems.

8. Libya’s friendly posture toward us is largely the result of the present King’s policy of friendship with the United Kingdom and the United States. This posture is likely to continue as long as King Idris remains on the throne and as long as Libya is reasonably satisfied with Western support, but may be seriously eroded if a more nationalistic regime comes to power.

9. As long as the British consider Libya strategically important, the United States should take British views into consideration in exercising its influence in Libya. The joint capabilities of the United Kingdom and the United States to influence Libya by the provision of financial assistance may be considerably diminished as the Libyan Government begins to receive substantial oil revenues, although the probable necessity to market the oil through Western facilities should serve as a moderating influence on Libyan actions.

10. Egypt has obvious designs on Libya, at a minimum for paramount political influence, and has a demonstrated capability for fomenting trouble there. There are a large number of Egyptian advisors and officials in the Libyan federal and provincial governments and teachers in the Libyan schools, although the number of teachers has been reduced as a result of U.S. efforts. The Egyptian radio, movies and newspapers have considerable popular appeal. The King and, to a somewhat lesser extent, senior officials of the Government are fearful of Egyptian motives but the popular appeal of pan-Arabism limits the extent to which this fear can be reflected in Government policies and actions. While Egyptian influence may increase, it is unlikely that any influential group of Libyans will wish to see their country incorporated into or pass under the control of the UAR. In fact, Libya’s present leaders will probably want to preserve some kind of British and Western presence to help counter pressures by the UAR.

11. There is likely to be an active competition for influence in Libya between the UAR and the United Kingdom during the next few years. From time to time, the United States may find itself caught in the middle of a conflict of interest between the United Kingdom and the UAR. Our present policy is to continue to seek British cooperation in achieving U.S. objectives in Libya. However, political conditions in Libya and the surrounding area could, in specific circumstances, make it necessary for the United States to consider disassociating itself from British policy or action.

12. Libya’s relations with members of the Arab League other than the UAR are confined largely to contacts at League meetings and international conferences and none of them exerts much influence in Libya, although the Libyan Government has on occasion professed a desire to strengthen relations with its North African neighbors and has given open support to the Algerian nationalists. It is likely that recent oil discoveries will reduce considerably any Libyan interest in a “North African Federation”.

13. Soviet influence in Libya, never very significant, has become even less so since the coolness between the UAR and the Bloc. Although in 1945 the Soviet Union requested a trusteeship over Tripolitania, it was not until 1956 that a Soviet Embassy was established in Tripoli. Soviet offers of military and economic aid in 1956 were rejected by the Libyan Government after the United States extended additional aid to Libya. The Soviet Government has since 1956 periodically offered to equip and staff two hospitals in Libya. The Libyan Government has accepted this offer in principle, but implementation has been postponed by argument over details. Although direct Soviet influence in Libya has remained slight, the Soviets have had some success in cultivating junior officials. The small clandestine Communist Party is not particularly effective, but is infiltrating the Libyan labor movement. Contact with the Soviet Union is likely to increase, particularly if a more nationalist or neutralist regime comes to power.

Military and Police Forces

14. When it became independent in 1951, Libya had no federal army and such armed forces as it had were the constabulary units of the provincial police forces. The police forces have increased considerably since that time (from 5,000 in 1957 to 8,400 in 1959) and continue to have primary responsibility for internal security in the provinces. For this reason they are of considerable political importance and their commanders are among the more important political figures in Libya today. They are paid and equipped by the provincial governments, which have been jealous of their prerogatives in maintaining these forces and have shown no disposition to surrender their functions to the Federal army. In return, the local forces have shown strong loyalties to their respective provinces. Both the United States and United Kingdom have believed that the creation of a Federal army which would be responsible to the central government was a necessary step in creating a sense of national unity in Libya and in overcoming the divisive tendencies of the provinces. We hoped that this step would be accompanied by a reduction in the military functions and in the size of the provincial forces. So far as possible we have directed our military and technical assistance to that end. While we have been able to build up the Federal army to the point where it is comparable to the strongest of the provincial forces (Cyrenaica), there has been no reduction in the size or functions of the provincial forces. However, as the army assumes responsibility for national defense and increases in stature, we expect that the military role of the provincial forces will decrease in importance and that they will be able to devote themselves primarily to normal police functions. In view of the numbers of Americans now travelling in remote areas of Libya and the prospective investment of American capital in petroleum facilities, we have an increased interest in the performance of those functions.

15. The present size of the Federal army is 4,200 men; the Federal Government is increasing it to 5,000. Such an army could, if it develops a strong national loyalty, provide the Federal Government with effective military backing and contribute significantly to internal security and to the unity of Libya. Government reluctance to create a large army which would perhaps play too important a political role will serve to keep its size modest, at least for the present. Under a U.S.–U.K. understanding55. See Annex C. [Footnote in the source text.] the United Kingdom is providing the light equipment and most of the training for the Libyan army, and the United States is providing the “heavy” equipment (e.g., trucks and recoilless rifles) and limited training. The United Kingdom has to date supported a program looking toward a Libyan army of 5,000 men (including 500 support troops). In the past the U.S. program has been directed at a force goal of 4,500, but it is now planned to expand it to cover the 500 support troops. Most of the vehicles for this increase would be procured in the United Kingdom.

Economic66. See Annex D for financial data. [Footnote in the source text.]

16. Since achievement of independence in 1951, Libya has been basically dependent upon military expenditures of U.S. and U.K. forces and upon grants from foreign governments. Over 90 per cent of Libya’s territory is desert and only about one per cent is suitable for settled agriculture. Most of the population lives at subsistence level by nomadic animal husbandry and agriculture and suffers from malnutrition and disease. Recent petroleum discoveries are however already causing a drastic and rapid change in the economic situation. It is currently estimated that the oil companies will spend a total of more than $100 million on development of Libyan petroleum resources in 1960. This sum is roughly equal to the total gross national product of Libya before the oil explorations begin. However, a portion of this expenditure will be for the companies’ overhead costs. From one-third to one-half of the total investment will take the form of imports of oil equipment and supplies into Libya. Roughly one-third of the investment will be in the form of purchases of Libyan labor and supplies, thereby making available foreign exchange which could be used for the financing of non-petroleum imports. When oil exports begin in late 1961 or 1962, these benefits will be supplemented by royalty and tax payments direct to the Libyan Government. Such receipts are likely to reach 35 to 60 million dollars per year by 1965, depending upon the rate of exploration of Libya’s oil resources, which probably will be affected more by world demand for petroleum and its availability from other sources than by any other factor.

17. The discovery and exploitation of oil in Libya is rapidly relieving the country of its almost total dependence on the military expenditures of foreign troops and the financial support of foreign governments, and gives the country for the first time a potential for economic growth. There are many problems which will have to be overcome, however, if this potential growth is to be achieved. An expanding oil industry will have other far-reaching effects, e.g.:

a. There is danger that the availability of funds to Libya from oil, in addition to British and U.S. military expenditures and grants, will outstrip the nation’s capacity to put them to use, and will create serious inflation and potential political dissatisfaction.

b. An expanding oil industry will increase the need for Libyan Government administrators, industrial managers and skilled labor and will accentuate the severe shortages in all these categories.

c. The techniques employed by foreign (including U.S.) oil companies in their competition for trainable Libyans could complicate U.S.-Libyan relationships. If, however, U.S. companies establish a high standard in labor-management relationships and in their commercial relations with Libyan nationals, they could contribute considerably to satisfactory U.S.-Libyan relationships and could reduce the possibility of grievances.

d. Oil production will stimulate commercial and industrial activities, which will in turn attract migration to the cities, and thus create fertile ground for political agitation.

18. Under present policy the United States is prepared to offer Libya assistance for FY 60 totaling $24.6 million,77. The $24.6 million includes $4 million in Air Force Special Purpose Funds under the 1954 Agreement; a $10 million cash grant from the Mutual Security Program; $5 million in project assistance; $2.5 million technical assistance; P.L. 480 programs (Titles II and III) of $2.5 million; and $670 thousand in military assistance. [Footnote in the source text. P.L. 480, Agricultural Trade Development and Assistance Act, was enacted July 10, 1954, For text, see 68 Stat. 454.] $14 million of it in the form of cash grants to the Libyan budget to meet Libyan pressures for increased payments for the use of military facilities. U.S. cash grants to the Libyan budget would thus exceed those of the United Kingdom for the first time.88. In addition to U.S. and U.K. aid, the U.N. provides technical assistance budgeted at $620,200 for the current fiscal year and Italy is providing, as war reparations, a credit of $4.9 million to be spread over three years in addition to a grant of $2.8 million given in 1958. [Footnote in the source text.]

19. The Libyans have been dissatisfied with the size of the U.S. economic aid program and with the controls involved in its administration.99. In this connection it may be noted that there is prospect that one significant cause of dissatisfaction, delay in building an adequate road to the Wheelus base, will soon be eliminated. Funds for the road have been appropriated and construction is expected to get under way during the present year. [Footnote in the source text.] The multi-year financial assistance commitment of the U.K. to the Libyan budget in the form of unencumbered cash grants has been accepted by the Libyans as the model for external assistance. They have proposed a revision of the 1954 Libyan-U.S. agreement, which now calls for the annual payment of $4 million through 1960 and $1 million thereafter through 1970, the terminable date of the base agreement. They have asked for a new multi-year commitment involving larger annual cash payments as rent for U.S. military facilities in Libya. Failure to satisfy the Libyans on both form and amount could lead in time to serious pressures for evacuation of our military facilities, particularly after Idris leaves the throne. The Libyans also desire greater control over the administration of any additional U.S. aid programs. Further, despite the prospect of oil revenues, it is not likely that Libya will reduce its requests for U.K. and U.S. aid. Libya may even press for greater compensation for maintenance of U.S. and U.K. military bases.

Objectives

20. Continued availability and use of those U.S. and allied military facilities in Libya important to U.S. security.

21. A stable central government in Libya able and willing:

a. To permit Western access to Libyan oil resources.

b. To minimize Communist and other anti-Western influence in Libya.

c. To cooperate generally with the United States and its allies.

Policy Guidance

22. Extend U.S. assistance and make financial payments to Libya at the minimum level necessary to achieve U.S. objectives as set forth in pars. 20 and 21, taking into account new Libyan sources of income and the contributions of other friendly nations.

23. Seek to reach an understanding with the United Kingdom as to the provision of assistance to Libya and as to the maintenance of military facilities there which will reflect British strategic interests in Libya.

24. With the objective of continued availability of our military facilities in Libya, go as far as practicable toward giving the Libyan Government a multi-year commitment for annual cash payments for those facilities, bearing in mind the effect such action may have on the cost and tenure of our facilities elsewhere.1010. The Department of Defense is being directed to undertake promptly, in collaboration with the Department of State, an over-all study of the feasibility and desirability of utilizing direct rental payments as quid pro quo for the maintenance of military rights and facilities in various foreign countries. [Footnote in the source text.]

25. Be prepared to relinquish U.S. rights and facilities if their retention cannot be secured at a cost commensurate with their value to us.

26. Make a major effort to strengthen Libya’s ability to utilize effectively the large amounts of capital becoming available from petroleum investments and sales, from foreign military expenditures in Libya, and from foreign aid and the quid pro quo for base rights by promoting (a) rational and well-directed planning for the use of available capital, (b) adoption of fiscal policies which will reduce the danger of inflation and will make available to the Government the revenues required for Government-sponsored development projects, (c) improved levels of technical competence in government, agriculture, health and other fields so as to facilitate more effectively use of Libyan human and natural resources, (d) development of the particular skills required in a petroleum-based economy. To this end, provide U.S. technical assistance, if requested by the Libyans, and encourage the Libyan Government to take vigorous domestic actions, to utilize the services of Free World international financial institutions, and to employ Western specialists and technicians. Also encourage private foundations and other private organizations to assist Libya in planning the effective use of its resources.

27. Provide surplus agricultural commodities under P.L. 480 as may be appropriate.

28. Continue to provide assistance for development projects in so far as possible on a gradually declining basis, shifting as rapidly as possible from grant aid to loans to be repaid from future oil revenues.

29. In cooperation with the United Kingdom continue to provide military assistance for the purpose of developing a Libyan army trained and equipped to maintain internal security. Concurrently, and in cooperation with the United Kingdom, continue to encourage the Libyans as internal security and political conditions permit, to limit the functions and size of the provincial police forces to the level required for performance of normal police duties.

30. Encourage Libya to make the maximum contribution to its own economic development, to take measures to prevent flights of capital, and to look to Free World financial institutions and to other nations with financial interests in Libyan oil developments should the need arise for external capital for development purposes.

31. Help promote diversification of the Libyan economy, particularly through private enterprise.

32. a. Though conditions in the area do not now permit practical steps toward some form of broader North African political association, encourage Libya to draw closer politically, culturally and economically to Tunisia and Morocco.

b. Encourage Libya to minimize its involvement in divisive Arab problems and disputes. To the extent compatible with this, encourage Libya to strengthen its ties with pro-Western countries of the area. With respect to the special problem of relations with the UAR, extend appropriate encouragement to the Libyan Government in following a realistic policy vis-à-vis the UAR which would have as its objective the establishment of good neighborly relations on the basis of mutual respect for each country’s independence and integrity. At the same time, as necessary to achieve our policy objectives, assist the Libyans in combating excessive Egyptian penetration.

33. Encourage Libya to follow such policies and take such steps as will strengthen Libya’s independence, its national cohesiveness, and its cooperation with the Free World. In pursuing these objectives, cooperate with the U.K. and seek to obtain the continued cooperation of the British in the attainment of other U.S. objectives in the area.

34. Identify and discreetly maintain contact through appropriate channels with those groups in Libya which are likely to play a significant role in the event of the King’s death.

35. Develop contingency plans regarding action to be taken in the event of a violent upheaval in Libya, and coordinate appropriate aspects of such planning with the U.K.

36. Be prepared to respond to a Libyan request for armed assistance under the American Doctrine for the Middle East and coordinate planning for such assistance with the U.K.’s plans for carrying out its obligations under the U.K.-Libyan treaty of alliance.

37. Encourage U.S. companies with interests in Libya to maintain high standards of conduct in their commercial relations with Libyan nationals. Keep these firms generally advised of U.S. objectives and policies with respect to Libya.

38. Encourage the Free World orientation of Libyan labor organizations with a view to influencing Libya to follow courses of action favorable to U.S. interests and U.S.-Libyan relations.

39. Promote, through information and educational exchange programs and other appropriate means (a) understanding of and friendship with the United States, and (b) appreciation by Libya of the importance and desirability of retaining U.S. military facilities in the area.

1 Source: Department of State, S/P–NSC Files: Lot 62 D 1. Secret. A cover sheet, a note from Lay to the members of the National Security Council, a table of contents, Annexes A–D, and a Financial Annex are not printed. Approved by the President on March 15, NSC 6004/1 incorporated the Council’s revisions pursuant to its March 10 meeting (see supra) and superseded NSC 5716/1. Regarding NSC 5716/1, see footnote 2, Document 333.

2 See Annex A for summary of U.S.-Libyan Military Agreements. [Footnote in the source text.]

3 U.S., U.K., West Germany, France, Italy and The Netherlands. [Footnote in the source text.]

4 See Annex B for text of U.K.-Libyan Agreements of 1953. [Footnote in the source text.]

5 See Annex C. [Footnote in the source text.]

6 See Annex D for financial data. [Footnote in the source text.]

7 The $24.6 million includes $4 million in Air Force Special Purpose Funds under the 1954 Agreement; a $10 million cash grant from the Mutual Security Program; $5 million in project assistance; $2.5 million technical assistance; P.L. 480 programs (Titles II and III) of $2.5 million; and $670 thousand in military assistance. [Footnote in the source text. P.L. 480, Agricultural Trade Development and Assistance Act, was enacted July 10, 1954, For text, see 68 Stat. 454.]

8 In addition to U.S. and U.K. aid, the U.N. provides technical assistance budgeted at $620,200 for the current fiscal year and Italy is providing, as war reparations, a credit of $4.9 million to be spread over three years in addition to a grant of $2.8 million given in 1958. [Footnote in the source text.]

9 In this connection it may be noted that there is prospect that one significant cause of dissatisfaction, delay in building an adequate road to the Wheelus base, will soon be eliminated. Funds for the road have been appropriated and construction is expected to get under way during the present year. [Footnote in the source text.]

10 The Department of Defense is being directed to undertake promptly, in collaboration with the Department of State, an over-all study of the feasibility and desirability of utilizing direct rental payments as quid pro quo for the maintenance of military rights and facilities in various foreign countries. [Footnote in the source text.]