Foreign Relations of the United States, 1958–1960, Lebanon and Jordan, Volume XI

396. Memorandum of a Conversation, Department of State, Washington, March 24, 1959, 2:45 p.m.¹

Washington, March 24, 1959, 2:45 p.m.

SUBJECT

• Jordan–U.S. Discussions at Department of State—Long-Term Aid Commitment and Budget Support for JFY 60

PARTICIPANTS

• Jordanian Participants
  • Prime Minister Samir el-Rifa’i
  • Sam’an Daoud, Minister of Finance and of National Economy
  • Akef el-Fayiz, Minister of Agriculture
  • Anastas Hanania, Vice President, Jordan Development Board
  • Abdul Moneim el-Rifa’i, Chief of National Guidance
  • Maj. Gen. Sadiq Shara’, Deputy Commander and CGS, Jordan Armed Forces
• American Participants
  • NEA—William M. Rountree
  • DOD/ISA—John N. Irwin
  • ICA—Leonard J. Saccio
  • ICA—Leland Barrows
  • Hon. Sheldon T. Mills, U.S. Ambassador-designate to Jordan
  • W/MSC—John O. Bell
  • NE—Stuart W. Rockwell
  • NE/E—George Bennsky

Mr. Rountree, who chaired this meeting, said he thought the exchange of views in the morning meeting with the Acting Secretary was very useful and had indicated a wide range of interests between the U.S. and Jordan on which there was substantial agreement, especially regarding objectives. This afternoon’s meeting provided an opportunity for joint discussion of past and future U.S. aid to Jordan. As had already been agreed, preparations had not been made for formal negotiations on specific proposals. However, these discussions would give Jordan an idea of what the U.S. could and could not do, and indicate that the U.S. was prepared to be helpful within these limitations. He then invited Prime Minister Rifa’i to set forth his views on U.S. assistance to Jordan.

The Prime Minister referred to Mr. Rountree’s December, 1958 visit to Amman and noted that he was sure we were already aware of his views on U.S. assistance from reports by our Embassy in Amman. Thus his task was comparatively easy. After expressing the gratitude and indebtedness of his country for past U.S. financial assistance, he took the position that Jordan was an essential factor in the Middle East and had made a critical contribution to the West in its struggle with the disruptive forces in the area. Because of Jordan’s geographic position vis-à-vis Israel, its army carried defense responsibilities for all the Arab states and was not required solely for the internal security and defense of Jordan. He felt it was fair to say that Jordan, with its limited resources, should not be expected to bear alone this overall defense burden. The budget support which Jordan has received, and continues to require, is for its army. The question is whether or not Jordan should maintain such a large army. If the answer is no, then the financial burden could be reduced and the remaining budget expenditures could be generally handled by Jordan. But, if as he believed, because of Jordan’s special defense role in the Arab Near East, the answer is yes, then outside budget support must be continued. At this point he reviewed the history of the Anglo-Jordanian Treaty² (with its British subsidy to the Jordan Army), its termination in the spring of 1957 and the prompt and generous way in which the U.S. had stepped in to fill the gap. If Jordan was to be successful in carrying out its internal and area responsibilities, it was necessary to move beyond the present day-to-day aid operations to a longer term aid commitment from the U.S. Specifically, what Jordan required was: (1) some form of assurance that the U.S. would continue its assistance for some defined period of years; and, (2) an indication of the magnitude and scope of such assistance. This Jordan requirement remains valid, he said, even though he clearly understood, from the morning meeting with the Acting Secretary, our constitutional and legislative problems in this regard.

Mr. Rountree said the U.S. felt that the size and role of the Jordan military was a matter largely to be determined by the Jordan Government. However, in arriving at this determination, the Jordan Government would obviously have to resolve the problem of balancing defense and security plans with financial limitations. He noted that U.S. budget support contributions have tended to be somewhat larger than those previously provided by the British, and that budget support per se was difficult for us to justify to Congress. In fact, it is only because of Jordan’s position in the Near East situation that we have been able to provide this type of aid. Further, in order to help the Jordan Government plan its budget for the coming year, we made a special and unique exception to the established practice of the U.S. Government not to commit funds until they are appropriated, and authorized our Chargé in December to commit the U.S. Government to make available (subject to Congressional approval) $40.5 million of special assistance funds to support Jordan’s fiscal 1960 budget. Recognizing that budget support merely meets Jordan’s day-to-day operating requirements and not its economic development needs, the Jordan Government should take a hard look at its budget, in terms of putting as much as possible into activities which build up the country’s economic potential. After completion of Congressional action on the USFY 60 Mutual Security Program and review of world-wide requirements for these funds, we hoped to be able to provide some special assistance funds for economic development in Jordan. If this proves possible, we would be prepared, in view of Jordan’s acute budget problem, to be somewhat flexible as regards division of such funds between budget support and economic development projects. However, if the Jordan budget requires U.S. assistance above and beyond the $40.5 million, the special assistance which we might be able to make available for economic development would be reduced by a corresponding amount. Taking into account all resources likely to be available to Jordan, including UK aid, the $40.5 million in U.S. budget support should provide the Jordan Government with sufficient resources to finance a budget which meets its essential security and operating requirements.

In addition, Mr. Rountree pointed out, we have already committed ourselves to provide up to 100, 000 tons of Title II PL 480 grains (valued at $8.1 million), and agreed to acceleration and flexibility in the use of special assistance funds previously obligated for economic development projects in Jordan. These actions alone provide the Jordan Government with significant resources to meet its drought relief requirements during its coming fiscal year. Further, we are prepared to increase the level of Title II PL 480 assistance to meet additional human and livestock needs if Jordan’s drought situation so requires. Also, in the realm of economic development, the DLF is prepared to consider applications for development projects in Jordan which meet its criteria. Mr. Rountree also noted, as the Acting Secretary had in the morning meeting, that the DLF had approved a loan of up to $2.5 million for the Jordan Phosphate Company project.

As for a long-term U.S. aid commitment to Jordan, Mr. Rountree referred to the Acting Secretary’s statement in the morning meeting that, due to legislative limitations, the Executive Branch of the U.S. Government could not make such commitments. However, the best assurance that Jordan could have of future U.S. aid intentions was our already demonstrated policy of helping Jordan and our policies regarding the independence of states in the Middle East and the economic development of underdeveloped countries. Mr. Rountree then asked Mr. Saccio if he would like to comment.

Mr. Saccio said that, as the Prime Minister was undoubtedly aware, the Executive Branch of the U.S. Government was taking a very strong position re holding down USFY 60 budget expenditures, and that this necessarily affected the anticipated level of foreign aid funds. With reference to a long-term U.S. aid commitment, he pointed out that Congress, and the American people, backed the objectives of our foreign aid program, as was evidenced by the continued annual appropriation of funds for this purpose. However, they were looking for results in terms of concrete economic development, and, therefore, were not particularly impressed by budgetary aid.

Prime Minister Rifa’i stated that there appeared to be no disagreement on general principles, and that he understood our difficulties; his Government had problems also. He then turned to discussion of U.S. budget support required in JFY 60 to cover the cost of the military establishment. He explained that U.S. budget support exceeded that obtained from the British in past years because (1) circumstances in the area necessitated an increase in the size of the military; and, (2) units had to be provided which the British had previously undertaken to make available from their own forces. He then turned over to General Shara’ further discussion of the Jordan military establishment.

General Shara’ said that the Jordan Army had not been enlarged very much since the termination of the Anglo-Jordanian Treaty. The addition of one brigade and supporting units had been necessary to fill gaps left by the British. In any case, it is not expansion of troop strength but increasing costs of maintaining worn-out, obsolete equipment from diverse sources that were running up the bill of the military establishment. The Jordan Army required a complete standardization of equipment, which, although costly now, would in the long run effect economies. He noted that the army still did not have enough artillery and, that, although Hawker Hunters were now on hand, it was necessary to build up the Air Force to handle them. In conclusion, he stated that Jordan cannot be expected to reduce the size of its armed forces, since they are now at absolute minimum strength given their internal security and defense responsibilities, and because such a move would be disastrous from the internal politico-security standpoint.

The Prime Minister followed up by saying it clearly had not been the intention or desire of the Jordan Government to increase the size of the army, rather it was the circumstances prevailing in the area and the necessity of closing gaps left when the British pulled out. Jordan’s military budget, supported by the UK, amounted to $35 million. Jordan originally planned a military budget of $40.6 million for JFY 59. During Arab Union negotiations in Baghdad, the military figure was raised to $46.2 million, but the Jordan Government saw no reason to be concerned since it expected the increased financing to come from Iraq. However, when the Arab Union broke up after the July 14 Iraqi revolution, it was not possible to cut these expenditures without reducing army manpower, which is something no government in Jordan can do.

Mr. Rountree stated that, while we appreciated Jordan’s problem regarding the size of its military establishment, we thought these forces should be at the minimum possible level in relation to requirements.

The Prime Minister reiterated that it was not his Government’s intention to increase the size of the army, but that reduction is a problem. In the first place, the army is now at minimum strength. In the second place, up to 75 percent of military expenditures relate to troop support costs, which indirectly aid the economy. Any reduction in manpower would have to be accompanied by economic projects to provide employment for the demobilized soldiers. However, every endeavor would be made to hold to the present manpower level and a study of overall military expenditures had been initiated, which the Prime Minister hoped would result in some savings. Turning to his JFY 60 budget, he pointed out that the military establishment’s requirements are $53.2 million, the increase (over JFY 59) being necessitated by a build-up of the Air Force more than anything else. In terms of cash disbursements during the year, he expected military expenditures to be somewhat less than $53.2 million. Specifically, he requested that U.S. budget support for JFY 60 be at least at the level of the military budget in JFY 59, namely, $46.2 million. The present U.S. offer of $40.5 million is $5.6 million short of meeting Jordan’s minimum budget support needs.

Mr. Rountree said that he understood the UK was planning to provide some aid to Jordan during JFY 60, and hoped that this aid would be helpful in meeting Jordan’s military budget problem. The Prime Minister replied that he hoped so, but that he did not want the army, which is the pillar supporting Jordan, to be paid for by scraping up piasters here and there. In any event, he wanted us to know where Jordan stood regarding U.S. budget support requirements. Mr. Rountree said that we appreciated the Prime Minister’s statement of his position, and that it was in the context of helping his Government plan its JFY 60 budget that we came forward with an offer of $40.5 million. At this point Mr. Rountree turned the discussion to military aid.³

1. Source: Department of State, Central Files, 785.5–MSP/3–2459. Secret. Drafted by Bennsky.
2. Signed on March 15, 1948, and terminated by exchange of notes on March 13, 1957. For text, see United Kingdom Treaty Series No. 26 (1948; Cmd. 7404).
3. In the discussion of military aid, Rountree indicated that, on the basis of General Risden’s recommendations and subject to Congressional authorization and appropriation of the necessary funds, the United States was prepared to initiate a modest program of military aid to Jordan. (Memorandum of conversation, March 24; Department of State, Central Files, 785.5–MSP/3–2459) Prime Minister Rifai also discussed with Rountree and the other U.S. officials the possibility that some FY 1960 special assistance funds might become available to support Jordanian economic development. Some consideration was given to what might be possible through the Development Loan Fund and under Title II of P.L. 480, but Rountree indicated that no definitive reply was possible at the time. (Memorandum of conversation, March 24; ibid.) Both memoranda are included in the microfiche supplement.