Foreign Relations of the United States, 1958–1960, Arab-Israeli Dispute; United Arab Republic; North Africa, Volume XIII

222. Memorandum From William Y. Elliot of the Office of the Under Secretary of State for Economic Affairs to the Under Secretary of State (Herter)¹

Washington, October 24, 1958.

SUBJECT

• Comment on the telegrams from our Missions, particularly Cairo, relating to conversations between Black and Nasser, and other relevant matters, including this morning’s announcement of the Soviet offer to build the first phase of the high dam at Aswan

(1) You suggested that I give you comments on this series of telegrams and on the problems posed by the Soviet offer. I have consulted Mr. William L. Griffin, of L/SFP, in order to round out my background on this, and he may feel inclined to comments of his own.

(2) It appears from the telegrams that Black had made some significant changes in the original proposals that he had suggested for consultation as to the way in which the re-opening of the Nile waters question should be put to Nasser and other interested parties.

(3) According to Dillon’s report from New Delhi (telegram 834 dated October 8)² Black had indicated that the UK in London had given enthusiastic approval to the ideas contained in the original memorandum subject to minor modification of the last paragraph designed somewhat to reduce the predominant role of Nasser. Dillon transmitted to Black at that time the suggestion that further technical information would be necessary before a final plan could be evolved. But Black apparently (telegram garbled) felt that enough information was now available to enable us to commence on certain projects.

(4) Essentially the changes in the original memorandum which were agreed to as a result of this conversation in New Delhi, were largely linguistic and in the interests of bringing in the Belgian-Congo and Ruanda-Urundi, as parties to the riparian problem, with the possible exception of modification of the final paragraph which was intended “further to dilute the position of Nasser”. The substantial parts of this modification read as follows: “If, after it has been ascertained through informal soundings that the Sudan was agreeable to arrangements such as are envisaged in paragraph 14, it would seem to the president of the bank that it would be fitting, and an auspicious send-off for such an approach to the Nile waters question if the President of the UAR would indicate that Egypt would be prepared to associate herself with a request to the president of the bank to lend the good offices of the bank to carrying forward these arrangements”. This modification of the memorandum was airmailed to Kaissouni by Black in order to prepare for the meeting with Nasser although Black felt skeptical of any concrete result from his initiative but it seemed worth while trying in order to get the negotiations off dead center.

(5) Subsequent to this appointment between Black and Dillon, Black showed the revised text to Makins, British head of the Mission in New Delhi. Makins characteristically objected, saying that it would be necessary to refer the changes to London for comment. The reply forwarded in Bunker’s telegram No. 856, of October 9, stated that it had been impossible “to reach Ministers due to absence at party convention but that the working level at the Foreign Office did not agree with the changes suggested by the Department and accepted by Black. The UK feels that principle of agreement by all interested parties prior to any financing by World Bank must be maintained. Therefore they are opposed to negotiations between Sudan and Egypt looking to financing or projects in the Sudan before over-all conference is called”.

It should be noted that this was the working level of the Foreign Office and no subsequent telegram indicates cabinet level views. Nevertheless, it is interesting to note that the working level recognized that this position will probably make agreement impossible since the UAR is highly unlikely to come to agreement with the UK at this time. They stick, however, on the principle that the progress of World Bank financing of needed projects in the Sudan should be delayed if necessary until overall agreement can be reached. Bunker, quite rightly, quoted this position “unacceptable” to the US and advised direct US representations to the UK at a ministerial level in the hope of clearing matters up.

Query: Has this been done?

In this connection it should also be noted that even if the Bank should accept the British position, it might be desirable for the UAR and the Sudan to negotiate and agree on certain matters between themselves prior to a conference of all the basin states.

Bunker suggests that he would be glad to assist while in London if the Embassy considers this advisable.

(6) Telegram No. 1202 of October 20 from Hare in Cairo indicated that Nasser had been friendly and receptive to Black’s suggestion that a commission of riparian states be set up to study the development of the Nile Valley which IBRD would be willing to help establish and chair, if requested.

However, a close reading of the subsequent part of the telegram in the light of the new Russian offer to put One Hundred Million Dollars into the first phase of the high dam at Aswan, throws some doubt on the cordiality of Mr. Nasser’s reception of Mr. Black’s proposal and certainly on his complete sincerity. (Diplomatic language!!) Hare reported that Nasser had been interested and willing to be helpful in regard to Black’s suggestion that the UAR request IBRD to assist in reaching Sudan–UAR agreement on waters. This indicates that Black, in my judgment quite rightly proceeded to sound out Nasser on the independent action of Egypt and the Sudan, and not accept the low level Foreign Office advice to hold up the whole business. In the light of the Russian offer this may become quite an important matter to establish, particularly in view of the consistent misrepresentation of the nature of previous negotiations between the Bank and UAR, and the US role therein. The subsequent language is particularly interesting in view of the Russian offer: “However, Nasser wished delay request to bank until UAR had announced intention proceed first phase of Aswan dam. (Black had indicated IBRD skeptical of feasibility first phase Aswan except as part of entire high dam project.)”

The significance of this and the fact that the Soviet Ambassador immediately followed Hare into a subsequent interview with Nasser, may strike me as being greater than possibly the hand of coincidence but I think they are worth consideration.

The next part of the conversation is particularly important: Nasser was reported as “disturbed lest Sudan projects reduce Egypt’s irrigated acres to five million and indicated suspicion UK and US were preventing Sudan from agreeing on Nile water division”.

You are no doubt familiar with the fact that the Egyptian claim on the Nile flow to increase certain acreage is in itself regarded as uneconomic in some quarters in terms of the land to be brought into cultivation. But Nasser stated his maximum claims as minimum claims and indicated in short that we were preventing the Sudan from reaching agreement on Nile water division with the obvious intention of pressuring us in turn to put pressure on the Sudan to accede to the Egyptian position.

As to the subsequent language, I think it probably was not intended by Black to indicate the acceptance of an ultimate veto by Nasser on undertaking Sudanese development independently, if Nasser, himself, were perhaps not to join in the ultimate Nile development scheme as a whole. You will recall that in my brief memorandum of October 3, 1958, commenting on the memorandum forwarded by Mr. Rountree, I asked that the warning by Mr. Black be made more specific that there could be no acceptance of an ultimate power of veto on the part of Egypt if Nile development as a whole were being held up by refusal to make equitable agreements.

I quote the exact language of telegram 1202 on this point: “Black had pointed out that this seemed improbable in light fact agreement between UAR and Sudan necessary before Sudan projects could go forward”.

Obviously Mr. Black was merely disclaiming British or UK attempts to prevent agreement by the Sudan in the light of the Bank’s previous attitude. Indeed he was more than justified on this point since the Bank had in effect insisted on this agreement with the Sudanese as a condition of proceeding with the Aswan dam in past negotiations, and equally to the Sudanese for agreement with Egypt before proceeding with the Roseiras Dam, etc.

(7) Hare reported that no “request” (my italics)³ was made for a loan for the first phase “but Kaissouni indicated likely interest long-term credits (source unspecified) since short-term supplier credits anticipated from sources such as Japan would be inadequate”.

Hare indicated that the next move on the Nile problem was up to the UAR and we have just seen what the Russian move is, at least.

(8) Conclusions and suggested alternatives of policy

This series of moves would indicate that Nasser is now strengthening his bargaining position and to force agreement by the Sudan to his terms on the allocation of Nile waters. He may be able to undertake the first phase of the high dam without flooding Sudanese lands, but if the second phase of the dam at Aswan floods the territory of the Sudan, with or without Russian financing, Egypt would be violating international law and the 1929 Agreement. The 1929 Agreement provided for subsequent negotiations of the Nile waters flow and under the 1953 Owens Falls Agreement, the UAR may obtain increased water by availing itself of its right to raise the level of Lake Victoria on payment of necessary costs, presumably after negotiations with the British before implementing any such step.

(9) The alternatives now open to Nasser on his part would seem to be to use this new leverage in establishing himself in a position from which he could move to the completion of the first phase through Russian help, and then be in a position to accept offers from higher bidders. At the threshold of the second stage he would certainly be confronted with the necessity of either outright violation of the 1929 agreement and customary international law by the flooding of Sudanese lands, or of making a deal with the Sudanese and presumably with the other riparian states. The British would certainly insist upon this agreement before further steps are taken in connection with the high dam development. From the point of view of the United States we would have the alternative either of:

(a) Trying to meet the Russian offer without strings attached in order to prevent the Soviets from having the back door from the Sudan to Africa open. They would most certainly attempt to conduct their own hydrographic surveys, check those made by the British and by us before proceeding with the establishment of the high dam, and they would strengthen their own position for negotiations with the upper riparian states, particularly Ethiopia and the Sudan, for an extension of Russian assistance, with Nasser as a friend at court and as one who would certainly possess rather powerful leverage if they had undertaken the first phase and proceeded at their own pace towards its completion. This intent may be the most important part of the Russian objective since the control of the upper Nile in Soviet hands or governments under Soviet pressure would reduce the independence of Nasser and prevent him from being even a little less tied than Tito to Soviet policy control.

(b) Another alternative which would be open to us would be to allow the Russians to proceed with the first phase of the dam and trust that Nasser would then want to call on us for further help, in view of the insistence which the upper riparian states would make upon not proceeding with the latter phase without general agreement or certainly bilateral agreements, with each of the countries concerned. This possible joint aid might have certain attraction from the point of view of financing. But it is obviously extremely risky. As I pointed out above the Russian’s bargaining power is considerably increased with Egypt. The Soviet block would gain added ability to penetrate the upper riparian states and offer them economic mediation and even “protection” against Nasser.

Given the degree to which Mahgoub’s attitude in the Sudan has previously indicated the dangers of this promised aid in the Aswan dam and the added avenues it provides for growth of Soviet influence both in Egypt and Ethiopia (the latter exacerbated by the Somali problem), this is a risk worth very serious assessment.

(c) A third alternative would be to insist that if Nasser proceeded with the first phase of the Aswan high dam, offers of Bank assistance would be withdrawn and steps would immediately be initiated in the upper riparian states to secure an equitable allocation of the flow of the Nile within the framework of the previous offer which Mr. Black had made for a general convention, pending Nasser’s acceptance. This would permit freedom of action for both the Roseiras and Managil projects and for that matter for the Ethiopians and possibly some further developments in the upper river basins of the other riparian states.

(d) Still another alternative would be to wait for developments (as we usually do) to see whether the Russians in fact intend to implement the offer or whether it is a carefully staged maneuver such as Nasser arranged previously. At that time his expectations of Soviet help on the high dam turned out not to be founded on a firm and worked-out agreement as to terms for implementation.

The publicly announced schedule of repayments is not to begin until the first phase of the dam is completed. Even with the low interest rates, Nasser economically is quite incapable of proceeding with the dam and with the capital development of the Suez Canal, which are further outlined in Hare’s telegram of October 20, previously quoted in large part.

The danger in this watchful waiting policy is that the Russians conceivably do mean business on this offer and that it is one of those selected targets which gives them the foot-hold in Africa that they have long sought.

(10) Conclusions

Of course, this is a very difficult problem, complicated by the desire of the British to prevent us from taking action in either the Sudan or Ethiopia which, in an ironic way, parallels Nasser’s desire to put pressure on both these countries. With regard to holding up independent action, perhaps the British may see the light because of the Russian proffer, and try genuinely to cooperate without exploiting their bargaining position in a direction which could do no good to anyone but Nasser and the Soviet initiative. It complicates the Bank’s problem by giving Nasser additional bargaining power, as pointed out above. It also injects, from the point of view of our policy, dangerous possibilities if the Soviet moves are genuinely intended toward implementation as a part of the “blue print” (Ethnographic Institute Studies) which provides for a massive and many pronged penetration of Africa radiating from the Sudan and Ethiopia. This penetration is timed to help force a premature end of colonialism, and to Communize Africa.

(11) Recommendations

I do not at this stage feel inclined to make anything but the most tentative recommendations since the situation is new and we have not had reactions from the field to the Russian offer or an analysis by the appropriate political and economic sections of the Department. It would seem to me, however, to be sound US policy to have it publicly known that Mr. Nasser had been approached with a view to the development of the Nile prior to the Russian announcement of their offer, and that we had thought his attitude was cooperative. We should therefore be disagreeably surprised if we found that the Russian proffer had been part of studied moves of which we had not been informed at the time of the offer made by the Bank in good faith, warmly supported by the Governments of the United States, and (I hope we can add) of the United Kingdom.

Beyond this, my own preference would be for informing Nasser that if he accepts the Russian offer and goes ahead without agreement of the Sudan, we reserve the right to proceed independently on aiding development of the upper Nile, on the grounds that he had, himself, in proceeding with his efforts without reaching agreement with other riparian states and particularly with the Sudan, not acted in accordance with the specific language of the 1929 agreement regarding its revision, and the usual practices among riparian states.

This particular package raises once more, by an acute example, the need that we discussed today, for having in Dillon’s shop (appropriately staffed from the Legal Adviser’s office, and with supporting help from the political desks and the economic experts, including possibly someone from ICA and other agencies, as needed), a center for continuous and intensive study of these matters, and for anticipating Soviet moves of this character and for devising both a strategy and a series of tactical defensives taken before the event, as far as possible.

As a particular application of this, I should warmly recommend that Mr. Griffin who has been following this problem more closely than anyone I know in Washington in the Government should be relieved of his present duties in L in order to have a focal point for framing the kind of necessary steps toward working out international control of the Nile waters and keeping in touch with the Bank on the policy interests of the Department where they did not require transmission through Mr. Dillon himself, and for advising Mr. Dillon and others through appropriate representation of the legal, political and administrative aspects of this problem.

Attachments:

• Cairo’s 1202 of October 20
• Cairo’s 1150 of October 14 (Sections one and two)
• Khartoum’s 448 of September 30
• Department’s 766 to New Delhi, of October 2
• New Delhi’s 836 of October 8
• New Delhi’s 834 of October 8
• Department’s 1022 to Cairo of October 10
• New Delhi’s 856 of October 9
• Department’s 1047 to Cairo of October 13 (repeated to London as 3730 and Khartoum as 475)
• New Delhi’s 856 of October 9
• From William Y. Elliott, dated October 3
• From William M. Rountree, dated September 27, with enclosures

1. Source: Department of State, Central Files, 886B.2614/10–2458. Confidential.
2. Neither this telegram nor the other documents attached to the source text is printed. The list of attachments is printed at the end of the memorandum.
3. Presumably the word “request” in quotes; it is neither italicized nor underscored in the source text.