222. Telegram From the Department of State to the Embassy in Morocco 1
527. Joint State/ICA. At meeting with ICA Deputy for Operations FitzGerald on Nov 29 Minister National Economy Bouabid accompanied by Benkirane2 requested US FY ’58 economic assistance in amount of $50 million. Stated this was minimum requirement needed from US in order help finance 40 billion franc [Page 601] equipment (development) budget. Because of limited absorptive capacity GOM could only take $40 million in commodity imports for generation local currency and needed balance as dollar credit.
Bouabid in explaining request stated that because of continuing financial and political crises in France he could no longer count with any certainty on assistance from French. Of 16 billion francs promised for 1957 no releases yet made altho 5 billion allotment promised before his departure for U.S. but not yet released. French assistance, he said, has been steadily decreasing and he expected this trend to continue. When asked how GOM able continue finance development program in light French withholdings, Bouabid stated this was done through treasury advances but if French releases not made soon, situation would become critical in January.
In reply FitzGerald expressed sympathetic understanding of financial problem facing GOM and willingness on part of U.S. to be helpful as possible in meeting requirements for external assistance but expressed serious doubts U.S. ability contribute amounts proposed by Bouabid. Explained serious limitations on our ability meet world-wide needs due drastic reduction funds by Congress. Stated U.S. program for FY ’58 in addition to Defense Support could include PL 480 and Development Loan Fund. Urged Bouabid to prepare specific project requests rapidly for DLF financing. Pouching memo conversation.3