106. Memorandum for the Record1
Amb. Bengelloun, just back from Rabat, came in this morning to make a pitch for help in the current Moroccan financial crisis.
His line is that a new situation now exists, different from that envisioned when the Kennedy-Hassan aide-memoire for 1964–5 was formulated. Morocco faces a serious financial crisis brought about by problems common to less developed countries trying to invest heavily enough to launch a serious development program while coping with poverty, unemployment, vast educational needs and the other serious problems of underdevelopment. Hassan has instructed him personally to talk with Morocco’s friends here, including President Johnson, and to seek aid. I dissuaded him from trying to see the President now.
I told him that the President has had Moroccan problems much in mind recently, was pleased the exchange of intelligence views had gone so well, and was relieved that the immediate threat from Algeria seemed less serious than GOM had originally feared.
I went on with a little speech on our interest in Morocco. There was no question about our support for Morocco’s independence and progress. In fact, we had already given more aid to Morocco than to any other country in Africa except the UAR (where actual dollar aid has been relatively small). However, even that sizeable contribution was secondary to what the Moroccans could do for themselves and to assistance from France. These facts don’t rule out further US help, but put our help in proper perspective. Regretting frankly that past aid has not been as effectively used as it might have been, I stressed that the biggest pre-requisite to Moroccan progress was for the GOM to put its own financial house in order. Morocco could learn a bit from Tunisia in this respect.
I underscored that to do so would be the best possible insurance for Moroccan security, too. The real threat from Algeria was not the threat of an overt attack across the border; in that event, the UN, the OAU, and the Western powers would all intervene to halt the fighting as they had last year. What really made Morocco vulnerable to the Algerian brand of radicalism was internal economic weakness. Subversion, not attack, was the greatest threat.
The best way to cope with this, I said, was financial reform and a serious development effort. Citing the Shah’s “white revolution,” I suggested, for instance, that the King himself might launch an austerity program—perhaps [Page 159] announcing a cut in palace expenditures as an example. Then he might get 100% behind the new development plan and make this his own political instrument, much as the Shah had done in attempting to ride the crest of change. Bengelloun probably missed the point and got bogged down defending palace expenditures and explaining the differences between the Shah (who held vast lands to give away) and King Hassan (who doesn’t).
Bengelloun got down to arguing that the decrease in US dollar aid is partly responsible for the current crisis. When I commented that this was the natural result of the agreed evacuation of our bases, he expressed regret that Morocco had moved in this direction. But he had to find out whether Morocco could count on US help. I replied that the important thing was to work out a solid stabilization plan with the IMF. He said the GOM would meet IMF conditions (though he probably overestimates the value of measures GOM is taking and may be seeking US aid so GOM won’t have to swallow the IMF prescription). He asked specifically that we turn the $10 million we’ve set aside for projects under the aide-memoire into a general program loan. I promised to ask Mr. Hutchinson about the problem. (B. is seeing him 8 October), but could offer no encouragement just now. The PL 480 outlook might be more hopeful. Mr. Saunders reiterated that AID’s response would depend heavily on what measures the GOM takes to remedy permanently the situation which has led to the current deficit and financial crisis. So the Ambassador should be prepared to state what his government will do to shore up its own structure.
Before leaving Bengelloun mentioned that he had an Arabic letter from King Hassan thanking the President for sending the intelligence team. He would have given it to me, but was having it translated. Could he get just a minute’s interview to deliver it? I talked him out of this. But I agreed to ask his friend, Mr. Bundy; he assured me he’d only take five minutes.2
- Source: Johnson Library, National Security File, Country File, Morocco, Vol. I, Memos & Miscellaneous, 12/63–7/67. Secret. Prepared by Komer.↩
- Attached to the source text is an October 7 transmittal memorandum from Komer to McGeorge Bundy that reads: “Mac—Your Moroccan friend Bengelloun promises he’ll only take ‘five minutes’ Friday at 4 pm simply to deliver King Hassan’s letter of thanks for our intelligence team (this gambit worked). Even so, I’d see merit in your reinforcing my pitch to him about importance of Morocco putting its own financial house in order. We want to be helpful but our aid is marginal at best, compared to what Moroccans can do themselves. They should follow Tunisian model, and meet IMF terms for austerity program. US is not drawing away from Morocco—US is merely anxious that Moroccans use their own resources wisely, plus the really massive aid they get from French.”↩
- Printed from a copy that bears this typed signature.↩