403. Telegram From the Department of State to the Embassy in Jordan1
2158. Joint State ICA message. Budget Support. Your 23362 (para D) and 23733 (para C) cause for concern here since our position re US budget support during JFY 60 remains same as stated King and Rifai during their Washington visit. Even after taking into account committed US and UK budget support, JFY 60 budget as presented by Rifai during visit, required HKJ find way reduce expenditures. King and Majali should be clearly aware consequences if they acquiesce in additional expenditure demands of military and other Government agencies indicated reftels. Therefore you should at first appropriate opportunity explain to King and Majali US position on JFY 60 budget support and other non-military aid utilizing material contained Deptel 18774 and memorandum conversation between Rifai and Rountree of March 24.5
British Embassy officer informs us Ambassador Johnston told Majali on May 11 UK would make available one million pounds its budget aid in July. Majali’s reported reply was he might well require these funds earlier. We have informally indicated to British Embassy advantages coordinated transfers installments US and UK budget aid as means exercising some control over Jordan budget. In particular we indicated transfer first installment UK aid in early part second quarter JFY 60 would be preferable since second installment our budget support does not appear likely until late August or early September (Icato [Page 718] 562).6 Furthermore it would not appear wise for US and UK allow predominant portion their budget support funds be utilized first half JFY 60 when experience has shown budgetary crises tend develop in latter part third quarter and in fourth quarter.7 We suggest you discuss subject this para with Ambassador Johnston.
- Source: Department of State, Central Files, 785.5–MSP/5–2259. Confidential. Drafted in NEA/E by E. G. Berns and cleared by Lakeland and Rockwell and with ICA. Repeated to London.↩
- Document 400.↩
- Telegram 2373 from Amman, May 15, reported on a conversation between Wright and former Prime Minister Rifai. In paragraph C, Wright summarized Rifai’s remarks on the budgetary problem. Rifai noted that Hussein was greatly concerned about the problem, and felt, on the basis of conversations with the Commander-in-Chief of the army, that the 19.5 million dinars proposed as the defense share of the FY 1960 budget was a “bone-bare” figure which could not be reduced without serious consequences for the King and his government. Rifai estimated that sufficient funds would be available to meet “this stepped-up army spending” until approximately July 1, when the Treasury would face a crisis and be unable to meet the army payroll. (Ibid., 785.13/5–1559; included in the microfiche supplement)↩
- Telegram 1877 to Amman, March 26, summarized the conversation concerning U.S. aid to Jordan which took place on the afternoon of March 24 between Rifai and Department officials. (Department of State, Central Files, 785.5–MSP/3–2659)↩
- Document 396.↩
- Icato 562, April 22, a joint ICA–State message, authorized the allotment through USOM of $10 million for Jordanian budget support for the first quarter of JFY 1960. The Embassy was instructed to caution Prime Minister Rifai to keep expenditures at a minimum during the first 4–5 months of JFY 1960 in view of the likelihood that U.S. budget support funds for the second quarter would not be available until September. (Department of State, Central Files, 885.10/4–2059; included in the microfiche supplement)↩
- Mills responded, in telegram 2438 from Amman, May 28, that he had met with Majali and had given him a memorandum making the U.S. position on the limits and timing of budgetary support explicit. Majali indicated that he recognized the overall limits of U.S. support, as outlined to the King and Rifai in Washington in March, but he was surprised that the second installment would not be available until September. (Department of State, Central Files, 785.5–MSP/5–2859; included in the microfiche supplement)↩