27. Telegram From the Embassy in Jordan to the Department of State 1

2815. Ref: Amman 2795.2 Subj: Demonstrating US support for Jordan.

1.
Amman 2795 reporting PriMin Talhouni's reaction to our decision to discontinue budget support highlights psychological considerations that require us to move quickly if we want to prevent further deterioration of our relations with Jordan. We believe it is generally accepted that a moderate Jordanian regime with which we can maintain a constructive dialogue will be a highly important, perhaps decisive, element in a viable solution to the Arab-Israel dispute. In the longer term, moreover, a moderate Jordan with a reasonable Western orientation should be an asset in dealing with the now greatly expanded Soviet presence in the Middle East. Conversely, an unfriendly, unstable Jordan would tend to contribute to further Soviet gains and would generally undermine the force of moderation in this area.
2.
We still have a chance—however fragile—to achieve a reasonably stable solution of the Arab-Israel impasse, yet in Jordanian eyes we appear at this same time to be diminishing sharply the material evidence of our support that has been the basis for our relationship and influence with Jordan. We have continued the ban on military supplies for Jordan—even a minimum of spare parts and logistic equipment—while we have released major arms, including aircraft, to Israel and other Arab countries. We suddenly (albeit with sound economic rationale) cut off budget support to Jordan. We have carried forward a minimum program of technical assistance and have only one smaller development loan project going. A major American company (Grace) pulled out of Jordan's potash scheme on “political” grounds, thereby putting the entire complex package in jeopardy. We have not yet been able to authorize commencement of negotiations of an estimated $3 million PL 4803 wheat sales agreement—more than a month after a formal note of request was submitted. In contrast to the British who in very straitened circumstances are paying their budget support through 1967, we propose not to fulfill the total of $27 million budget support in 1967 (as we had previously indicated). Instead we propose to substitute a grant for up to $3 million for feasibility and sectoral studies and the aforementioned PL 480 sales agreement for the expected $6.2 million fourth quarter payment.
3.
The Jordanian reaction to such actions as discontinuance of budget support must be evaluated against the very real and growing vulnerability of both the regime and the country to political and economic deterioration. The Jordanians argue they are far from self supporting economically, and they have past experience of the unreliability of Arab aid. We are well aware of their innate fiscal conservatism from our discussions with them in brighter periods. Now this conservative fiscal approach makes them distinctly reluctant (particularly in the present murky political climate) to spend to the limit of current liquid resources or to start down the slippery slope as they see it of internal borrowing to meet major, chronic budget gaps. The Jordanians are fully aware they can meet their foreseeable cash outlays in the coming twelve months; but they see themselves being cut afloat with a very uncertain future and no basis for future planning.
4.
The seriousness and immediacy of our problem, however, lies in the cumulative psychological effect of our several actions and reactions as summarized in reftel particularly paras 4 and 6.
5.
State 891494 informing us of imminent approval of the PL 480 program and indications of elements of existing loans and other aid that might be suggested for inclusion in the GOJ budget document is helpful. We believe, however, that considerably more of a positive nature is going to be needed if we are to deal adequately with the psychological problems we face. We see a real need to move quickly on number of fronts.
6.
Release of military shipments is an essential first step. (This may also facilitate the dialogue on budget support.) While we must continue and expand the dialogue we have already started on the shift from budget support to more effective evidence of our continued support for Jordan. As noted above, urgent action on the PL-480 program (we hope by the new year) and offer of a grant of $3 million for specific development purposes will be helpful. However, these two elements—especially the latter—unfortunately will tend to be caught up in probable recrimination over our failure to pay the total 1967 budget support as promised. Something more is clearly needed. Tangible progress on the potash scheme is perhaps the most promising possibility. We should encourage Tenneco to make a move as soon as possible to confirm its interests and intention. At the same time, we should take the initiative to get the World Bank to express willingness to move ahead on the overall scheme without private partner if Tenneco does not intend to proceed. On the problem of showing US support in published budget, reference to existing loan availabilities may help. Even more useful would be the possibility of saying something in the budget document about our intention to make the potash loan in calendar 1968 (thus either USFY 68 or 69).
7.
On the budget support question itself, perhaps we could suggest to the Jordanians a specific timetable for review of Jordan's fiscal situation, e.g. August-September 1968. This might be more concrete evidence of continuing concern for their economic situation and thus ease their feelings of uncertainty. We would reaffirm readiness to review earlier in event of unforeseen developments or need.
8.
The most valuable assistance we can afford Jordan in the period immediately ahead is support for certain necessary elements in the political settlement with Israel as envisaged under the UN resolution, especially a viable arrangement on Jerusalem. The King and his advisors have already shown unease as to the actual meaning of the support we have promised. Their adherence to the moderate course directed at political settlement—no matter how much they desire it—is [Page 51]conditioned by the extent to which they believe it is possible. Both the establishment and the Jordanian public see the US role as critical, and they continue to look for something tangible to confirm the US intention to provide this support. A strong public or even private statement consistent with our even-handed policy, or a position that favored Jordan on some key issues, preferably Jerusalem or possibly on refugees, could have significant favorable effect. If we can find some way to make our promise of support for an acceptable settlement more credible, or if we can take some action that will clearly demonstrate our ultimate intentions and capacity to deliver, the problem of developing a rational and mutually satisfactory overall relationship will be greatly simplified. Conversely, if our demonstration of our capacity effectively to support a satisfactory settlement is inconclusive in the immediate future, the achievement of understanding and acceptance of our posture including aid will be much more difficult.
9.
With the foregoing in mind, therefore, we recommend that the following courses of action be considered on a priority basis:
A.
Release of military shipments followed by authorization to begin talks with the Jordanians about force goals taking into account the disappearance of the UAC and compatible with a peaceful solution of the current crisis.
B.
Telegraphic authorization to begin negotiations of PL 480 sales program.
C.
Authorization to offer up to $3 million for development (including feasibility studies).
D.
Urgent attention to moving potash project forward.
1.
State/AID approach to Tenneco to obtain firm statement of intention proceed with potash project.
2.
State/AID approach to IBRD to gain agreement in principle that potash project can move ahead with appropriate technical and management assistance on contract basis in lieu of private partner.
3.
Obtain any necessary approvals sign project agreement for test pans construction.
E.
Approval of mention in GOJ budget presentation of contemplated development loan operations, to include potash as well as existing loan availabilities. (This will need to be authorized urgently since printing of this final section of the GOJ budget document is scheduled momentarily.)
F.
Propose to the GOJ a definite date to review their fiscal position in the light of situation after mid-1968, expressing also readiness to examine earlier if circumstances warrant.
G.
Explore what encouraging indications we could give to show our support for an Arab-Israel settlement with which Jordan can live, e.g. [Page 52]
1.
A letter from Secretary to PriMin Talhouni reaffirming our intention to lend all diplomatic and other support for a settlement and providing reassurance on our support for Jordan's well-being on the basis of sound economic development and political stability. (Suggested draft by separate message.)
2.
A public statement reciting established Arab rights in Jerusalem and environs (such as private property ownership) and expressing disapproval of measures pretending to change these.
3.
Revival of pressure on Israel for repatriation of significant numbers of newly displaced persons prior to settlement.
Symmes
  1. Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL JORDAN-US. Secret; Priority; Limdis.
  2. Telegram 2795 from Amman, December 28, reported on a December 27 conversation between Ambassador Symmes and Prime Minister Talhouni. Symmes reported that Talhouni “let down his hair” and stated that he regarded the U.S. decision to discontinue budgetary support for Jordan as another sign of U.S. disapproval of him personally. Talhouni added that some leading members of his government felt that discontinuing budgetary support, like the failure to resume arms shipments to Jordan, was meant to punish Jordan for its role in the June war, and constituted economic pressure to force Jordan to agree to a Middle East settlement on Israel's terms. (Ibid.)
  3. Agricultural Trade Development and Assistance Act of 1954; 68 Stat. 454, as amended.
  4. Dated December 23. (National Archives and Records Administration, RG 59, Central Files 1967-69, AID (US) 15 JORDAN)