Attachment
Paper Prepared in the National Security Council
Washington, November 10, 1969
Subject:
- Possible Alternative Pressures on Present Libyan Regime
A. Present Situation:
A small group of young Army officers (the RCC) has overthrown the Libyan monarchy. The political
inclinations of this group are still unclear, and possibly varied.
While the group has installed a civilian cabinet which includes two
key members who violently disagree with our Middle East policy, it
is still too early to state that either the RCC or the civilian government is fundamentally
anti-U.S. For the moment it appears that latent Libyan xenophobia,
which has spilled over into Libyan-U.S. relations in recent weeks,
also characterizes the new regime’s attitudes toward all
foreigners.
Libyan policy emphasizes Libyan nationalism in internal matters while
identifying itself closely with radical Arab positions
internationally. The new government has threatened an important U.S.
interest by renewing the demands, posed twice under the monarchy but
reversed by the King, for the removal of the U.S. and British bases
and facilities.
While there is no discernible opposition, the regime shows signs of
insecurity and inexperience. It is particularly concerned about the
eastern region, Cyrenaica, the power base of the Senussi monarchy,
and rural areas of Tripolitania. Unless the Army should split, the
national police, now effectively neutralized by the Army, represents
the only possible counterforce. The former King has voluntarily
moved to Egypt this month; the Crown Prince is in jail. Other
possible contenders to the throne remain free but under surveillance
in Benghazi.
The other major U.S. interest, the $5 billion (replacement value) in
oil investment, remains untouched for the moment. The regime has
pledged respect for the oil agreements and has so far demonstrated
this except in one case in which a company was closely tied to
associates of the former King. We see no immediate threat to these
interests, although such could result if the regime is threatened,
or becomes increasingly unstable, or if there were a real
confrontation over Wheelus, or in the event of renewed hostilities
in the Middle East. While only 8 percent of Libya’s 3 million
bbls/day production comes to the U.S., 90 percent
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is produced by twenty-eight American
companies. Their activity netted the U.S. balance of payments $680
million in 1968. Sales are principally to West Germany, the U.K.,
Italy and Spain; Europe is now dependent on Libya for 25 percent (3
million bbls/day of short-haul oil) of its oil requirements; if
Libyan oil were cut off, the shortfall could not be made up within
less than one year because of production and transportation
problems.
B. Present U.S. Strategy:
Our present strategy is to seek to establish satisfactory relations
with the new regime. The return to our balance of payments and the
security of U.S. investments in oil are considered our primary
interests. We seek to retain our military facilities, but not at the
expense of threatening our economic return. We also wish to protect
European dependence on Libyan oil; it is literally the only
“irreplaceable” oil in the world, from the point of view both of
quality and geographic location.
The Libyans have asked that we withdraw from Wheelus before December
24, 1971, the earliest date on which the present agreement could be
allowed to expire. We plan an early response to the Libyan request
in which we will agree to the principle of early withdrawal and
propose detailed discussions. While there is no doubt that the
removal of the base is, as it always has been, a popular local
issue, at least some military officers in the RCC may be more interested in retaining
our help in the creation of a Libyan air force and in an orderly
transition. Their freedom of action may be limited by the intense
popular feeling against our stand on the Arab-Israel issue. A change
in the status of the base seems inevitable; our ability to secure an
extension of the essential training facilities at Wheelus is now
unclear. We have as yet, however, found no fully satisfactory
alternative site(s) for this training. The British, too, are
prepared to accept a change in the status of their facilities. They
hope to remain the prime military supplier to the Libyans and to
retain some training rights, however. The British have the advantage
of less identification with Israel.
In developing our short-term strategy vis-à-vis the new Libyan
government, we have a choice between a policy which is essentially
that of confrontation and a policy which would involve some give on
our part with a view to developing longer-term relationships with
the new and still insecure regime. In general, we opt for the
latter.
[Page 6]
C. Alternative Pressures:
In response to the request of the WSAG the following possible
alternative pressures on or against the regime are set forth. They
are not mutually exclusive; they could be applied single or in
combination. Because of the generally increased risk each would pose
to our economic interests in Libya, because almost any one of them
would place our broader interests in jeopardy throughout the Arab
world, and because some of them would threaten Europe’s dependence
on Libyan oil, none of the alternatives is recommended at this time.
Annexes exploring in greater detail the practical implications of
economic pressures, military actions, and covert activities are
attached.
- 1.
-
Possible Immediate Pressures:
- a.
-
Delay a reply to the note on
Wheelus or reply in the negative.
PRO: Could create uncertainty in RCC and cabinet regarding
our intentions; might effect split among them.
Night delay further action on their part because
of fear of our real designs.
CON: More likely, that delay would lead regime to
open campaign in streets against U.S. and base.
Cairo and probably the USSR would support campaign and attack
U.S. position. Street campaign could pose serious
threat to safety of U.S. community, investment,
base and Embassy; this, in turn, would necessitate
some form of protection of each.
- b.
-
Enlist NATO countries to
express concern over premature departure from U.S.
and U.K. bases.
PRO: Certain NATO countries such as Turkey and
West Germany have more leverage than we in Libya.
Their expressed concern over future security of
NATO area and Libya without bases might have an
impact on RCC.
Fact that U.S. and U.K. not alone in this concern
might slow down demands for withdrawal.
CON: Idea of NATO pressure has always produced
strong adverse reaction in Libya. Present Libyan
PM led fight in
1967 to cut off oil shipments to West Germany. He
could do so again. It is doubtful that West
Germany and others would risk strategic economic
interests to support us.
- c.
-
Insist that Libyans honor their
international agreements as the have assured all
concerned they would; if they refuse, break
diplomatic relations in reaction to clear
contravention of their earlier assurances. Seek
support of European friends in doing so.
PRO: If successful, this might cause regime to
re-think pressures on us for an early withdrawal.
RCC has been
conscious of its international image. [text not declassified]
CON: Such action would rob us of access to the
new regime at a critical time. It would
undoubtedly result in further agitation against
U.S. citizens and installations unless the
military regime was sufficiently concerned about
public disorders of any kind to prevent them. It
would probably be welcomed by the more extreme
elements in the country.
- 2.
-
Pressures on Libyan Economy:
- a.
-
Request the American
companies to curtail their oil offtake from
Libya.
PRO: Assuming legal means could be found to
induce voluntary cooperation by the companies
concerned, this would strike at Libya’s main
resource and all-but-exclusive source of public
revenues and foreign exchange.
CON: The large number of U.S. companies involved
would make voluntary compliance difficult. Since
many are small and without alternative sources to
meet their European contract commitments, and
since the major producers are non-vertically
integrated, they have less flexibility than
elsewhere in the Arab world. At present neither
the concessions nor the Libyan government
associates the base and the oil issues. Such an
association could lead to greater threat of
nationalization. Libya would probably retaliate by
cancelling concessions. Physical attacks on
Americans and American property could not be ruled
out. It would be likely to harden, not soften, the
regime’s position on the base. Furthermore, the
Libyan government itself has been concerned about
the spectacular growth in offtake; it might prefer
to slow the depletion of a wasting and limited
(twenty years at present rate of production)
asset.
- b.
-
Advise U.S. technicians to
leave because of unsettled conditions.
PRO: If properly timed and plausible, this could
have an impact on Libyan regime. Libyan oil is
largely
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dependent on U.S., technology. In 1967 the Libyans
went to great lengths to retain and protect U.S.
technicians.
CON: If perceived as a political act, such a move
could backfire. The Libyans could readily seek and
obtain Eastern Bloc and other nationals to operate
U.S. properties—if they did not also seize the
properties. It is doubtful that, in such
circumstances, this would moderate the regime. It
would unquestionably lead to great difficulties
for U.S. firms operating in Libya.
[The following alternatives might not be legally
possible except under the Trading with the Enemy
Act. They are listed for completeness and in the
event that they should be further explored.]
- c.
-
Cut off oil imports from
Libya.
PRO: This would demonstrate U.S. displeasure
without as great a risk of serious consequences as
“a.”
CON: Since only 8 percent of Libyan oil comes to
the U.S., the economic effect would be minimal.
Such action would provide a basis for
anti-American agitation without at the same time
encouraging the regime to greater moderation.
- d.
-
Place additional restrictions
on U.S. investment in Libya.
PRO: This might have some effect on the expansion
of U.S. investment in Libya and hence induce
greater moderation.
CON: It is doubtful that this would have
sufficient impact to make the regime substantially
more tractable. U.S. companies have already shown
some hesitancy to expand investment because of the
uncertain political situation; this has had a
beneficial effect on the regime’s attitude. If
such hesitancy were given an official cast,
however, the effect could be the opposite.
Furthermore, most oil investment in Libya has been
financed on the Eurodollar market.
- e.
-
Threaten to freeze Libyan
reserves in the U.S.
PRO: Libya keeps $150 million in short-term
securities and banknotes in the U.S. A quiet
threat to freeze these if legally possible would
have an impact and
[Page 9]
might make the regime more
tractable.
CON: Libya would probably retaliate against U.S.
interests by seizing properties. The risk of such
an action would seem too great to justify its use
solely in retaliation to the demand for base
evacuation. Furthermore, Libya holds so
substantial a proportion of its exchange reserves
in dollar form only at our request and to meet our
balance of payments problems; under the
circumstances such action would be an unfortunate
signal to other countries which have been
responsive to similar requests. The Libyan
government now maintains its foreign exchange
reserves ($539 million in 1968) almost entirely in
gold, dollars and sterling. Its potential for
disrupting foreign exchange markets by sudden
switching is not entirely negligible.
- 3.
- Military Action:
- a.
-
Use units of the Sixth Fleet to make a show of force
off the Libyan coast.
PRO: This might demonstrate to the Libyans our
displeasure at recent events. It would serve to
underscore the importance we attach to our interests
in Libya.
CON: A show of force, to be effective, would have to
be followed by other actions; use of the Sixth Fleet
in this way at the present time would have serious
political consequences elsewhere in the Middle East;
in retaliation the Libyans might invite the Soviet
Mediterranean Fleet to call at Libyan ports.
- b.
-
In concert with the British
move sufficient troops into facilities and
training areas to hold these areas on grounds that
we need to protect lives and property. We would at
the same time make pledge of noninterference so
long as U.S. lives and properties were not
disturbed.
PRO: We could do this under present agreements which
permit us freedom of movement of troops into our
agreed areas. Placing of troops would enable us to
move them out to protect lives and installations
elsewhere in the country. It would make the regime
uncertain regarding our subsequent intentions and
secure us full use of our facilities. Given
sufficient force and airlift it could provide the
means for preventing mob action against our people
and installations, particularly away from urban
areas. It would give heart to our friends such as
Tunisia and Morocco.
[Page 10]
CON: British agreement to such a scheme would be
doubtful. We would have difficulty in getting
overflight rights from Europe (and possibly even
from Tunisia and Morocco) for a massive troop lift.
It would undoubtedly mean long-term occupation by
combat forces of these facilities. We would risk
serious criticism from most of the rest of the world
and be giving away a substantial propaganda weapon.
Even with forces in our facilities we could not
guarantee the safety of all our citizens and
investments. We would be undertaking drastic action
for short-term gain, but incurring serious
longer-term costs. Finally, and under the best of
circumstances, we could not legally maintain troops
at the facilities beyond 1971.
- c.
-
If the British were not
prepared to cooperate, a unilateral U.S. landing
at Wheelus, El Uotia (the range south of Tripoli)
and Matratin (U.S. Coast Guard station near the
major oil fields).
PRO: This would be a feasible operation, with the
same advantages as “b” above.
CON: It would leave U.S. citizens and investments
more exposed in eastern Libya. It would leave us
politically exposed. Lack of British cooperation
would further complicate overflight problems.
- 4.
- [text not declassified]
- a.
-
[text not declassified]
[Page 11]
[2 pages not declassified]
