Foreign Relations of the United States, 1952–1954, Africa and South Asia, Volume XI, Part 1

711.56373/4–1654: Telegram

The Consul at Benghazi (Summers) to the Department of State¹

secret

Benghazi, April 16, 1954—9 p.m.

92. From Villard. Confirming indications Legation has received from Libyans including King, deputies, and others for a long period of time to effect main issues involved in negotiations were money and jurisdiction, Libyan delegation has been altered to consist of Aneizi, Minister of Finance and Qalhoud, Minister of Justice with Jerbi continuing at least for time being in absence Buseiri, now Foreign Minister.

At meeting April 15, Aneizi, seconded by Qalhoud, immediately opened question of economic aid making following points in justification extensive aid to Libya:

(1) Treaty must be acceptable to Libyan Parliament and people who expect substantial aid from United States in return for making bases available and thus inviting aggression against Libya and possible destruction Libyan cities. Extent of aid which should be provided by United States related in Libyan eyes to that provided other countries which have furnished bases (Spain and Greece) or have not (Israel), to British aid which combines undertaking defend Libya with substantial financial assistance in spite of Britain’s financial difficulties, and to known United States position as world’s wealthiest power.

(2) Libya which is poor small country has need of additional funds for urgent development projects of which government has details.

(3) As Arab state Libya’s political position in signing agreement with west is very difficult especially in view Abd Al-Nasr declaration that Arab states allying themselves with NATO countries are acting against interests of Egypt and Arab League. Therefore it important Libya be able by obtaining sufficient economic aid combat expected attacks from Egypt which might be stronger than those against British-Libyan treaty. Such attacks could be expected to find supporters among Libyan public. In reply I pointed out United States had always been sympathetic to Libya’s needs, had sponsored Libyan independence and has worked actively both through United Nations and directly through Point Four and in other ways to demonstrate concretely our interest in Libyan economic development. However, United States Government’s program was governed by need for economy including substantial cut in foreign aid. I added that comparisons with British requirements were irrelevant and that I would consider it unfortunate if statements from the Arab League were permitted to block an agreement which appeared clearly to be in our mutual interest. I doubted further United States would be moved by demands for compensation against hypothetical future attacks in view of probability that in such event other parts of free world including US would undoubtedly suffer even more. I doubted there was sufficient time to analyze Libyan projects and stated I would always be prepared to consider fully justified projects over the years taking into account our other commitments.

I then reviewed past history negotiations re economic aid along lines my telegram 85,² and stated we had never received any indication extent Libyan demands. I said I had been authorized in fall of 1952 to discuss additional compensation but Libyans had never been willing undertake such discussions. Now since our requirements had diminished I was not sure whether any increases over original million dollars was possible.

After much discussion Aneizi finally proposed the figure of 7 million pounds annually.³

I said that this figure was of course fantastic. I then noted that although we were willing make retroactive payment to December 24, 1951, 1 million dollars obligated for this purpose would lapse on June 30 unless agreement reached before that date. It was in Libya’s interest conclude agreement soonest to be assured steady income which would form basis for conclusion FCN and other treaties at later date. Alternative was prolonged negotiation on unsatisfactory present basis.

Aneizi replied that Libyans considered US occupation bases constituted obligation on US Government for payment of compensation and he would consult with Council of Ministers with regard lapse of funds. Libyans were eager to see US status regularized since obviously unsatisfactory continue on basis interim agreement. Therefore they hoped US would make effort come closer their point of view and asked that Libyan demand be transmitted Washington.

Comment: Libyan figure is obviously bargaining ceiling and subject to drastic cut at least to British figure. I foresee prolonged discussions this point and on jurisdiction which of course not yet discussed. Degree Libyan agreement on balance text will probably hinge to large extent on settlement issues compensation and jurisdiction. Meanwhile we will make every attempt secure agreement other articles still at issue during coming sessions. Date next meeting not yet fixed.

Summers

1. This telegram was repeated to Tripoli and Frankfort for CINCEUR.
2. Apr. 6; not printed. It reported on a conversation with Ben Halim, who was Minister of Communications at that time. Villard said that the Libyan Government had never stated what it considered a reasonable amount of compensation for the base agreement. Ben Halim said that U.S. military requirements were entirely unrelated to Libyan economic needs; and the United States, as a rich and powerful nation, had a responsibility to strengthen Libya’s economy to assure its survival. (711.56373/4–654)
3. Tripoli telegram 365, Apr. 21, reported the figure of 7 million pounds was undoubtedly quoted for bargaining purposes. The Minister, his staff, and the FOA country director, however, all felt that the absolute minimum the Libyans would accept was probably about $10 million per year. If that figure were considered, the Legation recommended that it be subject to review at the end of 5 years. Considering the amount of money the United States had already invested in Libya, the fact that the Libyans imposed so few restrictions on USAF operations, and the fact that Libya was the only Arab country to go out of its way to welcome a USAF strategic base, Villard suggested that the United States at least consider that amount. Telegram 366 from Tripoli, Apr. 21, suggested that the United States make at least some payment to Libya, since as yet it had made none since Dec. 24, 1951. Telegram 334 to Tripoli, May 6, authorized the Minister to make an interim payment to Libya. It said he had the authority to make $1 million available without further action from Washington, and the Department preferred to have the payment made before June 30, whether the agreement had been completed by that time or not. Documentation is in Department of State file 711.56373.