47. Memorandum From the Under Secretary of State for Economic Affairs
(Dillon) to the
Under Secretary of State (Herter)1
Washington, November 4,
1958.
SUBJECT
- Proposed Program for Palestine Refugees
The attached memorandum from IO and NEA gives a total figure for the U.S. share
for the Palestine refugee program of $850 million. By the use of various
statistical assumptions of highly doubtful validity the memorandum
reduces this figure to a total of $290 million, which is labeled “Net
cost of program to U.S.” I think this figure is highly unrealistic.
A fairer analysis would seem to be the following:
Total cost of U.S. share approximately $800 million. (This
eliminates the $55 million which we will in any event be
required to contribute to UNRWA prior to June 30, 1960.)
[Page 109]
An estimate of $300 million representing the U.S. cost of
continuing care for the Palestine refugees in the ten year
period 1960–1970 at the present scale, assuming no resettlement
takes place. This would leave a net cost for the U.S. for the
resettlement program over and above that of keeping the refugees
in their present state of approximately $500 million.
I doubt if the Congress would approve such a $500 million program unless
it was enthusiastically accepted by both Israel and the Arab states, and
unless there was some shift in the present orientation of the UAR toward the Soviet Union. In any event
this program should be considered in an inter-agency forum, such as the
OCB so that views of other
interested departments, i.e., Treasury, could be obtained before any
decision is taken to encourage the Israelis that we will in fact proceed
with a program of this magnitude.
Attachment
Washington, October 17,
1958.
Memorandum From the Assistant
Secretary of State for Near Eastern and South Asian Affairs
(Rountree) and the
Assistant Secretary of State for International Organization
Affairs (Wilcox) to the Acting Secretary
of State2
SUBJECT
- Study and Cost Analysis of Proposed Program for Palestine
Refugees
You have approved paragraph 3 of the recommendations set forth in the
IO/NEA memorandum of June 19 on the Palestine
problem,3 namely, that there be undertaken urgently a study
and cost analysis of the various recommended means whereby Israel
and the Arab host governments might be assisted in carrying out
programs for the integration and repatriation of the Palestine
refugees after the conclusion of the UNRWA mandate on June 30, 1960. It should be recalled
that these programs are based on the premise that Israel would first
publicly accept the principle of repatriation and compensation and
give effect to that commitment. The study has now been concluded
with the collaboration of the International Cooperation
Administration and a number of bureaus in the Department.
[Page 110]
The total cost of the program is estimated at about $1,370,000,000,
to be paid over a ten-year period. The United States share is
estimated at $850,000,000. This is a large sum dwarfing past United
States contributions to the relief and rehabilitation of Palestine
refugees. However, it should be viewed not only in terms of
liquidating the political and economic problem of the million
refugees but also as a significant means of developing the
productive capacity of the Near East. The carrying out of the
programs envisaged should, therefore, further other programs for the
area in which the United States could expect to participate. For
example, it is estimated that approximately $480,000,000 of the
United States expenditures could appropriately be channeled through
development programs for the area over the next few years. Moreover,
regardless of the programs in which the United States might
participate for the benefit of the refugees, it is estimated that it
would have to contribute to their relief over the period 1960–70 at
least $80,000,000 (if it continued to contribute at a 70 per cent
rate). The June 19 recommendations can therefore be viewed as
calling for the expenditure of approximately $290,000,000 beyond
what the United States might otherwise pay over the period 1960–70
for high priority development projects in the area and for continued
help to the refugees. It should be remembered that the steps
recommended on June 19 have as their objective the absorption of all
refugees by the end of the ten-year period.
In addition, it is estimated that UNRWA requirements until June 30, 1960, will be
$78,000,000, of which it is anticipated that the United States will
contribute $55,000,000 (including its contribution of $23,000,000
for relief and rehabilitation during Fiscal Year 1959 as already
authorized by the Congress).
The basic assumptions of the study are given in Annex I (Tab A).4 The resulting cost estimates are set forth in
general terms as follows:
|
Total Cost (millions of dollars)
|
US Share |
| I. UNRWA requirements
until June 30, 1960 (Annex II—Tab B) |
78 |
55 |
| II. A. 10 year program starting on July 1, 1960, for the
repatriation in Israel or integration elsewhere of all
Palestine refugees. |
|
|
| 1. Repatriation to Israel of 100,000 refugees (Annex
III—Tab C) |
185 |
123.2 |
[Page 111]
| 2. Compensation in lieu of repatriation (Annex IV—Tab
D) |
417 |
200 |
| 3. Integration either through Jordan and Sinai development
projects (Annex V—Tab E) |
251.2 |
165.4 |
| or through settlement otherwise within the absorptive
capacities of Arab states (Annex VI—Tab F) |
404.1 |
282.9 |
| 4. Decreasing relief over 10-year span (Annex VII—Tab
G) |
110.6 |
77.4 |
| Total Cost |
1,367.9 |
849.9 |
| B. The expenditure of the following amount of the above
sum, while resulting in the absorption of refugees, could
appropriately be channeled through the high priority
development programs for the Near East in which the US could
expect to participate over the next few years (Annex
VIII—Tab H) |
483.3 |
|
| Regardless of the nature of the programs for Palestine
refugees in which the US might participate, the US (if it
continued to contribute at a 70% rate) would have to
contribute for their relief over the 10-year span at
least |
77.4 |
|
|
560.7 |
560.7 |
| C. The programs for the complete absorption of the
refugees recommended in the June 19 memorandum would
represent a cost to the US in excess of what it could expect
to spend for high priority
[Page 112]
area development programs and for
continued relief of [unknown amount of source text
missing] |
|
289.2 |
III. Support of UNRWA through June
30, 1960, would be with funds appropriated under the Mutual Security
Act. The United States’ share of settlement programs, including the
large development projects, and the terminal relief programs would
at least in part be with funds requested under a separate
authorization and appropriation. Use might also be made of the
Development Loan Fund.
Annex I
BASIC ASSUMPTIONS5
1. Every person registered with UNRWA as a refugee is accepted as one for the purpose
of this study.
2. The number of refugees will continue to grow at the present rate
of 3 per cent a year. The following breakdown of refugees is used:
|
No. of Refugees—1000 |
|
Registered
|
Ration Recipient
|
| Number of Palestinian refugees reported by UNRWA, June 30,
1957 |
933.5 |
836.8 |
| Jordan |
(517.4) |
(433.5) |
| Gaza |
(221.0) |
(214.5) |
| Lebanon |
(102.6) |
(101.4) |
| Syria |
(92.5) |
(87.4) |
| Estimated, as of June 30 1960 |
1,020.0 |
914.4 |
| Estimated, as of June 30 1965 |
1,182.4 |
1060.1 |
| Estimated, as of June 30 1970 |
1,370.7 |
1229.0 |
3. UNRWA would continue to function
until June 30, 1960. Until then, the US support of UNRWA would be maintained at the
present level, it being anticipated that the UNRWA budget for 1959–60 will be
enlarged due to increased caseloads and to liquidation and transfer
costs.
[Page 113]
4. After June 30, 1960, assistance for repatriation, integration,
development projects and terminal relief would be channeled either
directly or through international organization such as WHO, UNICEF, Arab development institutions, or through the
Development Loan Fund. Compensation payments would be made to
refugees in a form and manner agreed upon by the Compensation Fund
Administration and the host state concerned.
5. While under the proposal the option to be repatriated would be
granted to all refugees, it is assumed that ultimately about 100,000
refugees would, in fact, be repatriated.
6. Every refugee not repatriated would receive an initial
compensation payment of $100, regardless of whether or not he could
establish a valid claim to abandoned property. Individual valid
claims in excess of $100 would be accepted and liquidated during a
subsequent phase of the program.
7. The total value of abandoned property in Israel is $480 million,
as estimated by the land specialist contracted by the Palestine
Conciliation Commission for its Identification and Evaluation
Program.
8. Due to the prevalence of community land ownership in certain parts
of Palestine, whereby individual property rights were calculated in
terms of given percentages of the community land, the fact that in
many instances such ownership was fractionalized to insignificant
amounts through inheritance, the faulty records kept and conflicting
claims, it is anticipated that the scope of valid claims presented
would be considerably less than the total value of abandoned
property.
9. Registered refugees who are not ration recipients would be
considered as integrated upon the receipt of their initial
compensation payment of $100 per refugee. The remainder would be
considered as integrated and self-supporting upon the receipt of
their initial compensation payment and their settlement. Settlement
would be effected either through absorption into the development
projects envisaged or through the payment (through the host
government) of a settlement fee varying from $400 per refugee in the
case of refugees in Lebanon, Syria and Jordan, integrated in those
areas, to $800 per refugee in the case of refugees in Gaza and
Jordan transferred to and integrated in Syria and Iraq.
10. For the purposes of this study, settlement is estimated as
beginning on July 1, 1960, and progressing at various rates,
depending on the project. However, as settlement will to a certain
extent be dependent on progress toward the completion of the various
projects, the rate at which refugees can be taken off relief may
during the initial stages be somewhat less than indicated.
11. There will be a progressively declining terminal relief and
education program after June 30, 1960, to provide for the needs of
[Page 114]
those refugees not yet
integrated. This program would be completed within ten years insofar
as the refugees integrated through the development projects are
concerned; for the remainder of the refugees it would be completed
within five years.
12. Relief is calculated at the yearly figure of $30 per refugee and
education at a yearly figure of $10 per refugee. These figures are
based on UNRWA experience.
