186. Paper Prepared in the Bureau of African Affairs0



1. Progress of U.S. Long-Term Aid Commitment to Tunisia

The first year of Tunisia’s Three-year Plan has seen her substantially achieve her investment goals by drawing down heavily on her foreign exchange and restoring [resorting] to extensive internal borrowing. This has generated inflationary pressures which could imperil the Plan’s success. The Tunisians say they were forced to rely more heavily on their own resources than expected because of the slow flow of foreign aid, particularly U.S. aid. (Our total commitment in support of the Plan—made in July 1962—is $180 million; allocations thus far are now about $35 million. AID has always regarded the plan as overambitious. Anticipating a stretch-out of the Plan, we made our commitment to the Plan and not for a three-year period.) The Tunisians seem determined to maintain the scheduled pace of investment in spite of the recognized risks of inflation and foreign exchange depletion.

Anticipated Tunisian Position

Mr. Slim may repeat his plea to you last July for additional flexibility of implementation of our aid program.1 He may take the tack that the sluggish flow of U.S. aid threatens the success of the Plan.

Recommended U.S. Position

Reassure Mr. Slim of our desire to see the Plan successful and our admiration of Tunisian efforts to this end. Since you last saw Mr. Slim we have eased certain aid procedures to expedite the flow of aid. Within the limits set by legal obligations and our balance of payments problem, we will continue to make such efforts. Our hope is that Tunisia will be able to find ways to make effective use of its aid commitments from other foreign sources. If total foreign investment was lower than planned during [Page 280] the Plan’s first year, the proportion of U.S. aid to total foreign investment was higher than planned—two-thirds against one-half. We believe this is fair evidence of our attempts to provide aid in good time.

2. Future U.S. Military Aid to Tunisia

Deliveries on our FY 60-62 Military Assistance Program to Tunisia are being completed. The success of our MAP has been limited by Tunisian reluctance—for reasons rooted in their past experience with the French military—to take full advantage of training and maintenance assistance available under the MAP. With the termination of this program our military assistance to Tunisia comprises only a small training program. During the past several months the Tunisian Minister of Defense has indicated on several occasions to Ambassador Russell the Tunisian Government’s hope that additional U.S. military assistance would be forthcoming. The Tunisians have mentioned military jets especially. Our response essentially has been that large quantities of equipment are now being delivered under our MAP (a $15 million program) and we believe for the present our best contribution would be to assist in training in the use and maintenance of this equipment.

Anticipated Tunisian Position

Alluding to unstable conditions in North Africa and acquisition of arms by Tunisia’s neighbors, Mr. Slim may again urge U.S. assistance in supplying Tunisia’s future military needs.

Recommended U.S. Position

You may wish to point out first to Mr. Slim that our readiness to supply arms to Tunisia since 1957 attests to our belief that an effective Tunisian military establishment will contribute importantly to stability in North Africa. We continue to hold to this belief, but at this stage we feel that our best contribution will be to assist Tunisia in training for the utilization and maintenance of equipment still being received under our MAP.

Talking Points

Mr. Slim, in all likelihood, will be more concerned with African than with bilateral issues, particularly apartheid, the Portuguese territories, and the situation in the Congo.
Mr. Slim is always appreciative of hearing our appraisal of the current status of leading cold war issues, and has informed Ambassador Russell he would like to discuss with you the future of East-West relations following the test ban agreement.
  1. Source: Department of State, Conference Files: Lot 66 D 110, CF 2326. Confidential. Drafted by Stackhouse and cleared by Brown, Heffner (DOD), Hilliker, and Rives. Prepared for the 18th Session of the U.N. General Assembly.
  2. The conversation between Secretary Rusk and Foreign Minister Slim on July 15 was recorded in a memorandum of conversation; ibid.; Central Files,AID (US) TUN.