887.00/1–1150
Memorandum of Conversation, by the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (McGhee)2
Subject: Iraqi Complaint that USG is Discriminating Against Iraq by Withholding Economic Aid, and is Supporting Israel in its Disregard of the General Assembly Resolution of December 9.
| Participants: | Mr. Abdullah Ibrahim Bakr, Chargé d’Affaires of Iraq |
| Mr. Abdul Jalil Rawi, Counselor of Embassy of Iraq | |
| Mr. George C. McGhee, Assistant Secretary of State | |
| Mr. H. B. Clark—ANE |
Problem: 1. The Iraqi Chargé declared that there is a deep-seated feeling among Iraqis that the US is discriminating against Iraq in the matter of foreign economic aid.
2. Mr. Bakr also stated that the US appeared to be supporting Israel in its disregard of the December 9 General Assembly resolution concerning the internationalization of Jerusalem, and cited a press statement on January 5 by Ambassador Francis B. Sayre, US Delegate to the Trusteeship Council, as evidence of this alleged attitude.3
Action Required: 1. To consider whether further steps should be taken to remove Iraqi misapprehensions concerning US economic policy towards Iraq.
2. To inform Mr. Bakr further concerning Ambassador Sayre’s reported statement to the Press.
Action Assigned to: NEA
Discussion:
Mr. Bakr called at his request and presented Mr. Rawi, the new Counselor of the Embassy of Iraq. He stated that he wished to pay [Page 637] his respects upon my return from my recent trip and to say that he was sorry that I had not been able to remain longer in Baghdad. I explained that my tight schedule did not permit me to visit both the Arab Capitals and the SOA countries, and since I had never visited the latter, it was essential for me to spend a greater portion of my time there.
Mr. Bakr said he was sorry to say that the impression was current in Iraq that the US was discriminating against it in the matter of foreign aid programs. It was plain that the US had been pouring out many billions of dollars in Europe and in Greece, Turkey, and Iran and had likewise sent millions to Israel, but Iraq had been “denied” any economic help whatever. I stated that I refused to recognize failure to give aid as “discrimination” and outlined to Mr. Bakr once again, as I had done in the past, the bases of American policy in the ECA program and the Greek-Turkish aid program and pointed out that our extensive commitments prevented us from extending these programs further to include, for example, the American republics and such countries as Iraq, who had not been devastated by the War. I said that in the past it was also true that the United Kingdom had assumed primary responsibility for economic guidance and assistance to Iraq. Mr. Bakr denied that the British had contributed anything to Iraq and, on the contrary, extended economic assistance only in those lines, such as railway construction, which would benefit the British in time of war. He accused the British of insisting that an elaborate railway station be constructed in Baghdad, which he assumed could only be of full utility in case of another war.
I said that we had never “denied” economic aid to Iraq and we certainly wished to encourage Iraq’s economic development in every way possible. That desire was reflected in our planning under the proposed Point Four program and we were also giving full support to Iraq’s application to the World Bank for a development loan. Mr. Bakr said that even here it was doubted in Iraq that the US had a bona fide desire to support Iraq’s application, since otherwise why had it taken more than a year to consider the loan, and there was no assurance even now that it would be granted. I assured Mr. Bakr that the Department had lent all appropriate support to the Iraqi application and Mr. Clark expressed the view that the delays which had occurred were due to technical difficulties, the majority of which were the responsibility of the Iraqi Government alone. I said we understood that the Bank was considering the Iraqi application sympathetically and would reach a decision at an early date.
Mr. Bakr reiterated his charge that we had lent considerable economic support to Israel, and I replied that the US Government had [Page 638] not given Israel so much as a penny on a grant basis. It was true that the Israelis had obtained a loan from the Export-Import Bank, as had two other countries in the area, but this was on a straight business basis, and the same opportunity existed for other states, including Iraq, to apply for Eximbank loans. I said that to my knowledge Iraq had never applied to the Eximbank for such a loan, and Mr. Bakr agreed that this was so. He inquired whether the Export-Import Bank would lend Iraq money for an oil refinery. I replied that I understood it was not the policy of the Eximbank to make loans for this purpose in the belief that ample private sources of funds existed for this type of operation. In response to his further inquiry, I stated that each loan was made for specific projects or programs whose economic feasibility had been fully demonstrated to the Bank.
Mr. Bakr referred to Iraq’s new cabinet and said that the younger members of the cabinet were among his classmates in college. He believed that the generation they represented was the hope of Iraq; if these representatives failed to achieve the liberal objectives they had in mind for the development of Iraq and the betterment of its people’s living conditions, the next step would probably be catastrophic for both Iraq and other countries in the Near East. He felt that should there not be an early improvement of economic conditions there might even be a sudden swing to Communism. The Government had earnestly endeavored to stamp out Communist cells in Iraq, but the Communist movement had, nevertheless, continued to make headway there.
Iraq had been devastated by many wars, beginning with the invasion of the Tartars who destroyed Iraq’s great irrigation system, never rebuilt. Iraq could make a tremendous contribution to the Near East should the US grant it adequate economic aid. Such aid must be forthcoming at an early date or conditions would deteriorate still further. It was essential to be able to show the people that the West really intended to give the Iraqis substantial help.
[Here follows a brief discussion of the General Assembly resolution of December 9, 1949, concerning the internationalization of Jerusalem.]
As Mr. Bakr was leaving, I said I was personally disturbed that some of our Arab friends continued to express doubt as to the sincerity of our desire to assist them in every way possible. He said he believed in the good faith of the United States, but what was needed was “deeds, not words.”
- Drafted by Harlan B. Clark.↩
- For documentation on this subject, see Foreign Relations, 1949, vol. vi, pp. 594 ff.↩