442. Memorandum of a Conversation, Department of State, Washington,
July 11, 19561
Washington, July 11, 1956
SUBJECT
- Aswan High Dam; Military Assistance to Iraq
PARTICIPANTS
- Mr. Ronald Bailey,
Counselor, British Embassy
- Mr. Willie Morris, First
Secretary, British Embassy
- Mr. William C. Burdett,
NE
Mr. Bailey left the attached
memorandum analyzing the present situation in Egypt and possible courses
of action with respect to the Aswan Dam. The memorandum requests the
Secretary’s views.
Mr. Bailey remarked upon the
similarity between the Foreign Office observations and those of the
Department conveyed to him yesterday.2 I said that
Ambassador Byroade had just
reported that Egyptian Ambassador Hussein was expected to leave Cairo for
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Washington on July 13 and had been charged
by Nasser with discussions
principally on the Aswan Dam. Ambassador Byroade indicated that the Egyptians were prepared to
suggest agreement on the basis of our December 1955 offer.3 I
commented that it would probably be necessary to give Ambassador
Hussein some reply next week
and that we would be in touch with the British on the matter
shortly.
With respect to the British suggestion for a Nile Development Board which
is essentially similar to the US proposal for a riparian conference, I
informed the British representatives that Ambassador 1 Pinkerton thought
the Sudan would not be attracted by the idea. The Ambassador is of the
opinion that the Sudanese think they can obtain a better deal by
negotiating directly with the Egyptians and that involvement of other
countries will result in a reduction of the total amount of water
allotted to them. Ambassador Pinkerton also doubts that the Egyptians
and Sudanese will finally resolve the question of a division of Nile
waters in less than a year. Mr. Morris said that should a Soviet-Egyptian deal on the
Aswan Dam materialize, it would set a bad precedent for the Sudanese and
would immediately expose the Sudan to Soviet penetration.
Mr. Morris stated that the Crown
Prince of Iraq4
recently had urged an increase in the supply of weapons by the West. The
Crown Prince thought that the flow of Soviet Bloc armaments on a large
scale to Egypt was having a particularly bad effect among junior
officers. Mr. Morris asked that
the US do everything possible to speed up a final decision with respect
to additional offshore procurement in the UK. I explained that the appropriations legislation had not
yet been passed and that in view of the prospective deep cuts it would
probably be some time before we were able to arrive at definite
decisions.
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[Attachment]
Memorandum From the British Embassy to the Department of
State5
Washington, July 10,
1956.
ASWAN DAM
Although Shepilov left Cairo
without any announcement about Russian aid for the High Dam,
evidence continues to mount that Nasser may shortly accept a Russian offer in some
form. He may, before setting out for Moscow, ask us point blank
where we stand. We must therefore consider what line we are to
take.
- 2.
- Since we and the United States Government made our offer of a
grant in November [December?], our
political assessment of Nasser’s position has become more unfavourable.
One of our main reasons for making the offer was to help him
limit the Czech arms deal to what he called a “once and for all”
transaction and keep other Communist technicians out of Egypt.
This hope has been progressively contradicted by events.
Moreover Nasser is
already enmeshed in the Russian net (though he himself may not
realise how much). This involvement is economic as well as
political. Politically Nasser continues to work against Western
interests, for all his fair words; and seems in particular to be
developing sinister ideas about acquiring some control of oil in
other Arab countries. We have therefore been considering whether
it is in our interest economically or politically to maintain
our offer of a grant to build this dam for Nasser now.
- 3.
- The arguments for continuing our offer are substantial. We
must draw a distinction between Nasser with his pro-Soviet policy, and the
people of Egypt for whose long term interests a dam is
essential. Egypt remains the most influential Arab country, and
in the long run we want a friendly Egypt. If we now withdraw our
offer, or leave Nasser
a case for arguing that we have done so, we shall risk a serious
propaganda defeat in the Middle East and Russia will be able to
pose as a humanitarian benefactor who attaches no political
strings. In any case we are substantially committed to a
specific and detailed offer.
- 4.
- On the other hand apart from the major political
considerations in para 2 above, there are substantial reasons
for not maintaining our offer of a grant. Economically it would
land the United
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Kingdom with a large open-ended agreement against limited
resources which we might find on further examination could be
used to greater general advantage in other ways. Nasser has devoted a
substantially greater share of his economic resources to
building up armaments and has run into other financial
difficulties of a more serious kind than we foresaw when the
scheme was drawn up, and is paying for imports from the
Communist bloc by selling to them increasing quantities of
cotton on which he must rely for the major part of the foreign
exchange necessary to finance his share of the dam. Moreover we
have to suffer the serious disadvantage of doing more for a
regime whose actions are consistently hostile than for our
friends.
- 5.
- There are several possible courses, the most important of
which are set out below.
- A.
- We might take the initiative and make public our
withdrawal This would encourage friendly governments in
the Middle East; and force Nasser either to
turn to Russia, thus making unmistakably plain his
Russian connections, or go without his dam. It might
also encourage the opposition to Nasser of elements
in Egypt who do not wish to quarrel with the West.
Against this we should be revealing prematurely our
confirmed hostility to Nasser, and not only risk an
intensification of his anti-Western activities (from
which the United Kingdom would be the first and most
severe sufferer), but also shake the confidence of many
Egyptians and other Arabs in our good intentions towards
them, and prejudice our chances of reverting to our
offer with a more friendly Government.
- B.
- We could toughen up our financial terms. This might
also give Nasser grounds for claiming that we were
never serious, and give him a pretext for turning to the
Russians.
- C.
- We might do nothing, but continue to let our offer
languish. This gives us no adequate reply if he asks us
point blank what our position is, or offers to clinch
the deal on the basis of our offers.
- D.
- We might make a specific proposition to Nasser: asking him
what side he is on, and what evidence he can give us of
the value of his reply. This is unlikely to produce
realistic results.
- E.
- We could try a new approach. We could say that the
present scheme is too exclusively focussed on Egypt’s
needs: that we want a wider scheme bringing in a lot of
other affected states. We are prepared to go on with the
scheme on this wider basis, with a Nile Development
Board and equal opportunities of access by the Sudanese
and others to the capital available, so that Egypt does
not scoop the pool on Nile development. This would be a
difficult charge for Nasser to answer without seriously
upsetting the Sudan. Unless some additional arguments
were adduced this would however expose us to a charge of
breach of faith.
- 6.
- We see considerable merit in the last idea which is in line
with the thoughts put forward by the American Minister on June 1
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when he asked for
our views on the proposal to call a conference of riparian
states.6
- 7.
- We should much value Mr. Dulles’ views, especially on para. 5(e)
above.7
