874.00 TA/12–1152: Telegram

No. 1054
The Secretary of State to the Embassy in Egypt1


1287. At inter-agency mtg to consider problem econ assistance Egypt raised urtels 1407 and 1409,2 it was suggested:

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That in connection projects listed reftel, impending industrial survey mission3 might be utilized to advantage. Shld Emb agree, it might prompt requests by GOE for additional staff members Cabot group. Early recruitment cld be undertaken particularly in fields (a. engineering (re Aswan request), (b) steel, (c) public roads (member preferably from BPR group in Turkey), (d. telecommunications, and (e) finance (possibly from Treas). Recruiting additional staff members wld take place after informal consultation IBRD to prevent duplication. Presumed Emdpts will request such technicians chargeable TCA program funds. Dept hopes thus expanded, industrial survey group wld give tangible evidence US interest assist GOE meet long-range econ problems. However, it shld be made clear US not yet prepared give opinion on feasibility these projects nor shld this demonstration our interest be misconstrued as commitment.

Bearing in mind present limitations, Emb requested recommend which one these projects most feasible for early action or which wld give concrete evidence US interest.

Fol para for urinfo only.

That clarification be requested from Emb re need for wheat assistance along fol lines:
Egypt present exchange position;
Rate at which exchange position has been deteriorating;
Prospects exchange position in near future and over next 18 months;
Ability Egypt support a tolerable import program over this period;
Effect on stability Naguib Govt on further deterioration fon exchange reserves;
Whether Egypt fon exchange controls are reasonably administered, so that US assistance will not in its practical effect permit diversion of resources to wasteful ends;
What minimum amt and type wheat assistance (loan or grant), wld in Emb judgment suffice for the present to meet the need, in conjunction proposed mil aid, pending further measures which can only follow passage 1954 MSP legis.

Ghiardi due Cairo after Christmas, can assist.4

  1. Repeated to London as telegram 4236.
  2. Regarding telegram 1409, see footnote 1, Document 1046.
  3. The TCA industrial survey mission was scheduled to leave the United States for Egypt on Jan. 6, 1953. Thomas Cabot was to be its head.
  4. In telegram 1518 from Cairo, Dec. 27, not printed, the Embassy expressed the hope that the Cabot group could study several of the fields in particular, and the Embassy reported that it was undertaking a full-scale review of the wheat assistance project in consonance with the Department’s instructions. The Embassy was able to say that Egypt’s total wheat import needs for 1953 would be approximately 800,000 tons worth roughly $80 million. (874.00 TA/12–2752)