190. Telegram From the Interests Section in the Yemen Arab Republic to the Department of State1

338. Subj: Need for Economic Aid as well as Military Transfers. Ref: State 83466.2

Decision to consider Saudi and Iranian requests for transfer of military equipment to YARG will give us some needed latitude in furthering US interests here. Sooner or later Yemenis will learn of this positive step we are taking, and it would be helpful if Chargé could speak to high level YARG official about it at appropriate moment, perhaps at such time as first transfer might be approved.
At same time favorable as effect of above might be—especially on professional warrior elements in and out of uniform—it is highly important we build approach to Yemenis which emphasizes our genuine interest in their economic rather than their military development. In our opinion most promising route to reach this goal is also through our Saudi, Iranian and Kuwaiti friends.
More specifically, there is one potential project which seems particularly suited to type of multilateral assistance we are seeking, i.e., the badly needed renovation and expansion of Kennedy Memorial water project in Taiz. As Dept aware, this USAID project of 10 years ago sparked Taiz’s impressive rate of growth. After departure of American technicians, there was unsuccessful effort by UAR to Egyptianize operation. Following Egypt’s retreat, YARG ran project for a while before turning it over to present private management, Taiz cooperative organization. Chargé visited project last week and found 100 per cent Yemeni management doing admirable job of nursing along limping but vital operation, using American procedures in which they had been trained. Project is now serving 7,000 customers, up from original 4,000 and has to refuse continuing flow of new requests for service. Two of three original Fairbanks Morse generators are functioning, third being idle for lack of $40,000 in spare parts. If there are further breakdowns, system itself will come to halt.
Technical survey last year by Ford Foundation of what is needed and how much it would cost to renovate and expand project is, of course, immediately available. There certainly should be capable American companies ready to undertake such a job. For all-important funding, we suggest concerted effort be made at this time in Jidda, Tehran and Kuwait to persuade one, two or all three of those govts to participate in joint project. Such cooperation would help offset widely held impression here that only aim of some of YARG’s neighbors is to fight to the last Yemeni to defeat PDRY regime in Aden. Even in background US could eventually become similarly regarded if we are associated only with military side of things.
  1. Source: National Archives, RG 59, Central Files 1970–73, POL 19 IRAN–YEMEN. Secret; Priority; Exdis. It was repeated to Tehran (Priority), Jidda, and Kuwait.
  2. In telegram 83466 to Jidda and Tehran, May 12, the Department authorized the embassies to inform their respective host governments that the United States would consider requests for transfer of FMS equipment from either Saudi Arabia or Iran to Yemen on a case-by-case basis. (Ibid.)