Foreign Relations of the United States, 1961–1963, Volume XVII, Near East, 1961–1962

276. Paper Prepared in the Department of State⁰

Washington, May 24, 1962.

WHITHER UNITED STATES-UNITED ARAB REPUBLIC RELATIONS

1. The End and the Beginning.

The successful visits to Cairo by Ambassador Bowles and Dr. Mason, together with other manifestations of our willingness to be of further assistance, set the stage for the visit of Minister of Economy Kaissouni. In one sense Dr. Kaissouni’s mission was the culmination of an extended process wherein both the UAR and the US laid the groundwork necessary to the creation of a larger superstructure of US–UAR relations. In another sense, Dr. Kaissouni’s visit is the beginning of a new stage in our relations, wherein the UAR increasingly reaps tangible benefits and has in front of it the attractive and not too distant prospect of membership in the rather exclusive development consortium club, and wherein the US commences to imbed the UAR in the Free World, to reduce suspicions, phobias, complexes and frustrations which in the past have promoted anti-Westernism and pro-Sovietism in the UAR with their unhappy reflections in the Near East. The process is a long-term one. The short-term benefits to the US are to be found, first, in the measures already accomplished by action of the UAR; second, in their consolidation; and third, in the gradual but steady broadening of the areas of mutual understanding.

2. Perspective.

For purposes of perspective, it is important that we understand clearly the significant lengths to which the UAR already has gone over the past year or more, voluntarily, to make it possible for the US to render Dr. Kaissouni’s mission fruitful and to plan additional steps with the UAR:

a) the UAR has made clear by open and forceful resistance to Soviet interference in UAR affairs and to internal communism that the UAR fully intends to maintain its independence and freedom of action vis-à-vis the Soviet bloc;

b) the UAR has made clear its understanding that increased assistance from the US and the West is dependent in part on keeping the Palestine problem “in the icebox”, including the reduction of hostile propaganda and avoidance of military activities against Israel (while the UAR will expect the US to avoid both any serious initiative on the Palestine problem which the UAR would be obliged to oppose and any publicity regarding our tacit understanding on Israel which would force the UAR to prove to other Arabs that no “deal” on Israel had been made);

c) the UAR has finally devalued its currency and committed itself to undertake other financial reforms proposed by the IMF, while it has also made other moves designed to reorient much of its trade toward the West;

d) open support of Castro is no longer a feature of UAR policy although relations with Cuba and efforts to establish a neutralist government there continue;

e) UAR policy in the Congo and West Africa is now reasonably respectable and in some respects actually constructive (anti-Communist advice to Guinea), although UAR propaganda directed toward East Central Africa continues virulently anti-Western;

f) the UAR brand of neutralism has become much more balanced, and in its overt propaganda the UAR is relatively careful of its treatment of the US; and

g) the UAR is moving steadily to improve its relations with various European countries with which the UAR has been seriously at odds.

Having made these adjustments, in its own interest, the UAR is unlikely to be responsive to pressures for further significant policy change unless it can be convinced that a change would hold a balance of advantage for the UAR and could not be interpreted publicly as a concession to US pressure. For example, from early February we have endeavored to persuade the UAR to abate its radio propaganda against Iran and the Shah.¹ While Nasser has indicated willingness to cease attacking Iran if Iran will reciprocate, it is noteworthy that UAR propaganda did not let up against Iran before or during the Kaissouni visit, a period which in UAR eyes must have marked a critical test of US intentions.

3. Where Do We Stand?

The UAR is satisfied with the results of the Kaissouni visit. That there is much to be done to straighten things out with several European countries is well understood by the UAR. That the UAR may be able to take certain unpalatable actions in this connection is a reasonable conclusion in light of the UAR commitment to the IMF to devalue the currency and restrict internal credit. We have demonstrated that our intentions are not only honorable but generous. We have set an example for the European nations. In time the UAR will be able to meet its short-term foreign currency requirements. In its relations with Moscow the UAR will have a new bargaining point: increased US aid. Having before it a pledge of more development loans and the prospect of a development consortium, the UAR is encouraged to continue the course it has chosen to adopt: closer association with the Free World while continuing to maintain good relations with the USSR, relative moderation on the Palestine problem, muting of issues between the US and the UAR outside the Near East, reorientation of a greater portion of its trade toward the West, a more genuine neutralism, and improvement of its relations with [illegible—Israel?].

4. What We Cannot Do and Cannot Have in the Short Term.

a. We cannot tie political conditions to our assistance.

b. We cannot constantly complain to the UAR on minor frictions.

c. We cannot expect the UAR to cease propaganda against Israel or to agree to settlement of any facet of the Palestine problem.

d. We cannot expect the UAR to abandon its efforts to unify and lead the Arab world, particularly the Eastern Arabs (with incessant squabbles with other Arabs, some of them our good friends), or to drop its anti-Western propaganda and activities in East Central Africa.

e. We cannot expect the UAR to cease attempting to establish in Libya a government subservient to the UAR.

f. We cannot expect the UAR to restore private capitalism in large-scale enterprises or to cease espousing “Arab socialism”.

g. We cannot expect the UAR to abandon its partial reliance on the Soviets for economic assistance and principal reliance on the Soviets for armaments.

h. We cannot count on the UAR to agree to limitation of armaments in the Near East.

i. We cannot expect the UAR to cease attacking military pacts, bases and “imperialism” in the Middle East and North Africa.

These limitations stem from an analysis of UAR fundamental interests and behavior patterns. Without attaching conditions to our assistance we shall try to persuade the UAR to undertake further policy changes in its own interest, but we believe it important that there be an understanding in the United States Government of what generally not to expect from the UAR for some time to come. From time to time the UAR will give us some rather rude shocks, perhaps annoying a segment of the American public and causing criticism of our policy. We should not be thrown off course by occasional differences.

5. The Next Phase.

The stage we are now entering in our relations with the UAR may appropriately be called the “pre-development consortium phase”. We would expect it to endure some 9–12 months, or perhaps somewhat longer. We propose to continue our step-by-step approach, carefully laying the groundwork for each move, making clear what obligations the UAR must meet and what the UAR may expect from the US, and requiring adequate performance by the UAR.

For the next several months the UAR will be occupied in making a success of its stabilization program; attracting additional European support for it; negotiating a multi-year PL–480 agreement with the US; settling its financial accounts with numerous other countries arising out of Egyptianization, nationalization and sequestration; trying to make its new political system and nationalized enterprises work; establishing a relationship with GATT while trying to create among neutral countries techniques for dealing with the challenge of the Common Market; and seeking expanded markets in the West for cotton and cotton textiles. During this period the UAR will continue to communicate with the IBRD with a view to establishment of a team of experts to conduct a pre-consortium examination of the UAR economy and economic development plans. In all this we propose to let events take their natural course except for supporting UAR negotiations with the European countries on participation in the stabilization program and on broadening its cotton and cotton textile markets.

We propose, however, to conduct a number of conversations with Nasser other ranking officials. We also have in mind for the late summer a letter from President Kennedy to Nasser. The conversations would be conducted by Ambassador Badeau. We have already instructed him to follow up with Nasser after Dr. Kaissouni has made his report, to assure that Nasser fully understands not only our commitments but the UAR obligations arising out of Kaissouni’s negotiations with us, and with the IMF and the IBRD. We plan to follow this with a series of approaches designed as a follow-up to Ambassador Bowles’ talks, dealing with global issues, the position of neutrals, the UAR domestic scene, UAR relations with the Europeans, and area problems including Jordan waters. Regarding the latter we shall gently remind Nasser of his commitment to keep Israel “in the icebox” and urge UAR moderation on the waters issue in the interest of area stability. Also we shall continue to recommend abatement of radio warfare, a reduction in statism in the economic field, broadening of the political base of the regime, rural development, and negotiation of an investment guarantee program for certain fields such as tourism in which the investment of foreign capital would be acceptable to the UAR. If possible we should like to have Ambassador Badeau’s dialogue with Nasser placed on a regular, scheduled basis, perhaps alternating with Vice President Baghdadi.

The proposed letter from the President to Nasser is envisaged as a follow-up to our commitments to Kaissouni, a progress report, an encouragement for the future, an expression of continued personal interest in Nasser and the UAR, and a means of encouraging UAR moderation on any global or area issues then current.

In the Fall we expect the IBRD to begin its pre-consortium examination of the UAR. By then we should have completed the negotiation of the multi-year PL-480 agreement and shall be processing UAR applications for development loans within the terms of our commitment to the UAR. The next major move we have in mind is an invitation to Nasser for a state visit to the US. Our thinking has been in terms of December, the invitation to be issued after the US elections on November 6 if circumstances permit. However, we think we should have an alternate date available in February 1963 in the event that a) Tito comes to the US before the end of 1962 or b) the circumstances indicate that the later date would fit better into our moves as planned next Fall. An invitation to Ben-Gurion sometime in 1963 would appear to be desirable if Nasser comes here. With Nasser we would propose the discussion of global issues, US–UAR relations, area problems, the UAR domestic scene, and the possibility of an informal arms limitation understanding with the US playing broker. Providing the IBRD has laid the proper groundwork, the principles and problems of a development consortium should also be discussed in detail with Nasser.

To go beyond this point in our thinking for the new phase would seem fruitless now.

6. What Do We Get Out of Our Efforts?

As stated above and in previous memoranda, our objectives with the UAR are principally long-term, with lasting achievements perhaps decades away. The limitations within which we work are set forth above as are the policy adjustments already made by the UAR.

The benefits we hope to accrue from a continuing accommodation with the UAR are:

a. Higher UAR priority to domestic development.

b. Elevation of the standard of living and level of political awareness; modernization of the economy and society; and eventually progress toward democracy.

c. Gradual reduction in suspicion of the West, in fear of Western imperialism; UAR confidence in its ownership of the Suez Canal; abatement of other complexes; greater self-respect and statesmanship; and firmer membership in the Free World, with such thorough entanglement and with so many benefits therefrom that loss of freedom of action to a considerable degree is accepted.

d. Removal of the threat of Soviet domination of the UAR and hence of other parts of the Near East; and protection of our interests in the Near East.

e. Strengthening of the UAR’s cultural and economic orientation toward the West; and increase in US trade with the UAR.

f. Relative moderation on the part of the UAR toward the Palestine problem, indefinitely, with resultant encouragement of stability in the Near East.

g. Constructive UAR leadership of the Eastern Arabs in a world requiring ever more tightly knit relationships, particularly regional.

h. At the end of an extended period perhaps a willingness to live and let live with Israel as the world continues to “shrink” and enters a new stage of organization.

0. Source: Department of State, Central Files, 611.86/5–2462. Confidential. Drafted by Strong on May 15; retyped in the Executive Secretariat on May 24; and cleared by Williams (AID), Palmer (FN), Meloy (G), McGhee, and Bowles. Transmitted to McGeorge Bundy under cover of a May 24 memorandum from Brubeck that reads: “The enclosed memorandum is for the information of the White House. It reviews developments leading to the Kaissouni visit; describes the present situation; points the direction for the next nine to twelve months, the period we expect to elapse before we reach the point of ‘talking development consortium’ seriously with the UAR; and identifies political gains already made and the long-term benefits we hope to achieve.” Komer passed the paper to the President on May 28; see Document 279.
1. Documentation is in Department of State, Central File 686B.88.