874.00 TA/3–353

No. 1110
Memorandum by the Administrator of the Technical Cooperation Administration (Andrews) to the Deputy to the Director of the Mutual Security Agency for Program and Coordination (Ohly) 1

secret

Subject:

  • Request for Program Reauthorization in the Amount of $10,000,000 of Fiscal Year 1953 Funds for the Point 4 Program in Egypt

The Point 4 program in Egypt has never been commensurate with the magnitude of the social and economic problems of that country. One reason for this has been the attitude of the regimes in power up to July 23, 1952, which severely restricted opportunity and did not permit programs to be based on Egypt’s needs or potentialities.

The assumption of power by General Naguib and his reform Government last July, however, led to a clear change in the situation, culminating in the past two weeks with the Government of Egypt’s request for an expanded and balanced Point 4 program specifically designed to deal with some of Egypt’s major social and economic problems. The Egyptians made their request for such a Point 4 program in preference to an earlier proposal for a special economic program involving the provision of wheat or other import commodities in a similar amount of U.S. funds. Moreover, our Embassy, having weighed the two proposals on its own, and on the basis of questions submitted by the Department, has cabled that in its judgment an expanded Point 4 program would have “an even greater political and economic impact on our policy objectives than the wheat deal” authorized under Section 503.

We wish now to seize this newly presented opportunity without delay as a decisive attempt on our part to create a stable and friendly Egypt. The decision to act affirmatively in Egypt was made at the Cabinet level in January when it was determined to allocate a further $10,000,000 to Egypt and to waive eligibility conditions if necessary. On January 17, we authorized our Embassy to inform the Government of Egypt formally that the U.S. Government had approved assistance to Egypt in the amount of $10,000,000. On January 20, our Ambassador cabled that he had informally [Page 2006] told the Government of Egypt that the wheat grant had been approved in principle in Washington. Subsequently there were American-Egyptian talks on programming the $10,000,000 under the Act for International Development.2 In light of what has been said above, we consider that in effect we are committed to giving Egypt $10,000,000 in economic aid at this time.

It is requested, therefore, that the recent authorization of $10,000,000 for the purchase of wheat under authority of Section 503 of the Mutual Security Act of 1951, as amended, now be modified to permit the same amount to be made available for the purpose of carrying out a general Point 4 program in Egypt under the Act for International Development. Since discussions have been initiated with the appropriate representatives of the Government of Egypt concerning the type of economic assistance now needed, it is assumed that negotiations along these lines may be continued. However, authority to sign these program agreements has been held in abeyance pending your approval of this request for reauthorization of funds and a weighing of the effect of notification to the appropriate Committees of Congress of the changed circumstances described herein. Our Embassy in Cairo has been instructed accordingly.

The proposed Point 4 program consists of a $10,000,000 joint-fund agreement for community development and rural rehabilitation, including housing, health, agricultural extension, farm-market roads, cooperatives, vocational education and training in the province of Beheira, near Alexandria, and in the province of Fayoum, south of Cairo. It will be carried on primarily by Egyptian technical and custodial personnel with heavy emphasis on training at each step. The Egyptian contribution is currently estimated at 5,500,000 Egyptian pounds (equivalent to 15.7 million dollars), or more than half again as much as our $10,000,000.

The program in Fayoum involves the reclamation of approximately 60,000 acres of land and the resettlement of approximately 10,000 landless families. The program in the province of Beheira calls for the reclamation by drainage of 20,000 acres of land and the resettlement and housing of approximately 4,000 landless farm families.

The funds contemplated under the present Point 4 program of $3,000,000 would not be affected by this new program.

The information presently available regarding the program, the opportunity involved in and the need for this expanded technical cooperation program in Egypt, and the factors making prompt [Page 2007] action essential are contained in the following cables exchanged with Embassy Cairo:

  • Deptel 1434, 1–17, Secret
  • Embtel 1687, 1–20, ”
  • Deptel 1646, 2–17, ”
  • Embtel 1876, 2–18, ”
  • Embtel 1898, 2–20, ”
  • Embtel 1901, 2–20, ”
  • Deptel 1680, 2–20, ”
  • Embtel 1914, 2–21, ”
  • Embtel 1940, 2–25, ”
  • Embtel 1948, 2–26, ”
  • Deptel 1712, 2–27, ”
  • Embtel 1958, 2–28, ”3

In closing, I should like to say that this is a rare opportunity to take a big step forward in our relations with Egypt. The Government of Egypt is ready to negotiate and sign a joint-fund agreement to carry out this proposed Point 4 program. Moveover, Ambassador Caffery is of the opinion that it would “give the same emergency financial support to the Egypt balance of payments deficit, but will associate us with a continuing program of more effective benefit to Egypt.” The one thing that is now holding us back from taking this very significant step forward in Egypt is the lack of authority to sign the necessary agreements.

Action Requested

We respectfully urge you to insure this program reauthorization so that authority to sign the agreements may be given to our Ambassador as soon as possible.4

  1. According to a note attached to the record copy of this memorandum and addressed to Arthur Z. Gardiner, this memorandum was taken to the Mutual Security Agency that same day. Moreover, Johnston Avery, Assistant Administrator for Programs, Technical Cooperation Administration, had signed the document for Andrews.
  2. Title IV of the Foreign Economic Assistance Act of 1950, signed into law on June 5, 1950, as Public Law 535. See 64 Stat. 204.
  3. Of these 12 telegrams, only telegram 1434 to Cairo, Document 1080, is printed. The others are in Department of State file 874.00 TA.
  4. The Department on Mar. 4 in telegram 1749 to Cairo, not printed, informed Ambassador Caffery that the new program had been approved in Washington, but that he was not to sign the program agreement until the allocation funds had been received. (874.00 TA/3–353) The Department in telegram 1761 to Cairo on Mar. 6, not printed, authorized Caffery to sign the program agreement. (874.00 TA/3–553)

    This special Technical Cooperation Administration agreement was signed and entered into force on Mar. 19, 1953. For the text, see TIAS No. 2843, printed in 4 UST (pt. 2) 1761. This program was separate from and did not supersede the funding and development of the other Point IV projects in Egypt which were being funded in the amount of $3 million.