23. Memorandum of Conversation1

SUBJECT

  • Notes on Chiefs of Mission Meeting

PARTICIPANTS

  • Secretary Kissinger
  • Ambassador Akins
  • Under Secretary Sisco
  • Under Secretary Robinson
  • Assistant Secretary Atherton
  • Ambassadors: Paganelli, Scotes, Sterner, Stoltzfus Wolle, Twinam
  • Chief, US Interests, Lowrie
  • Consul General Bahti
  • Mr. Dickman, NEA/ARP
  • Mr. Butcher, Amembassy Jidda, (Notetaker)

Secretary: Welcome and a word of appreciation to the Ambassadors that they have been able to come to the meeting. Please do a 3 to 5 minute appraisal of the most important concerns in each of your countries.

Ambassador Stoltzfus: The Kuwaitis’ main desire is to have US assistance in the military field. After three years of procrastination they have decided that they do want the military program. They have signed a contract with Raytheon for Hawk missiles and have signed for A–4s. Total value of the program will be $300 to $400 million. The [Page 111]Kuwaitis say they are committed to do everything necessary to produce a decent defense force.

Secretary: What are the obstacles to this?

Stoltzfus: We have no commitments yet. If the DOD decides to do the job then work can proceed.

Secretary: Are there special requirements?

Stoltzfus: Yes a series.

Secretary: What is the hangup?

Stoltzfus: A Circular 175 is required giving authority to discuss a Memo of Understanding with the Kuwaiti Government. After the signing a military mission can get under way but they will not begin until the Memo of Understanding between the two nations is signed.

Secretary: Why do we have these obstacles?

Stoltzfus: There is no authority to talk with the Kuwaitis.

Secretary: Who is holding it up?

Stoltzfus: The State Department.

Assistant Secretary Atherton: It is just in the mill.

Mr. Dickman: The Memo is done and is on its way to the 7th floor; it has been completely cleared.

Stoltzfus: The problem is that I don’t know what the basic policy is. Is it to support Kuwait in its basic military needs?

Secretary: Yes, it is. How long have you been working on this?

Stoltzfus: Since the spring of 1974. I just need to know the policy.

Secretary: The policy is: we should do it. We have domestic problems in this area. Many groups are opposed to American arms sales into the area even though others will sell the arms if the U.S. doesn’t.

Stoltzfus: I agree.

Secretary: We must try to do this with a minimum of domestic flack.

Under Secretary Sisco: We have been pressing for the last several years and the Kuwaitis have now made up their minds to go American.

Secretary: Go ahead.

Atherton: This will require Congressional approval.

Secretary: Especially after the (Saudi) National Guard problem. Be careful, but go ahead, the situation won’t be any easier three months from now.

Stoltzfus: The mission would consist of 9 or 10 men. If we underwrite the Kuwaiti needs we should have more than we have talked about. This would amount to several billion dollars over the next few years if we do underwrite the Kuwaitis. If we don’t they will go commercial. Other key issue: is extreme difficulty for Kuwaitis in getting some kind of knowledge about how to handle their investments.

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Secretary to Under Secretary Robinson: Will you go to Kuwait to discuss? Yes.

Stoltzfus: Kuwaitis are small and need little in the way of infrastructure, but they desire to maximize their investments world wide so that when their oil runs out they will have a “perpetual annuity.” They also desire joint ventures in third countries with U.S. business.

Secretary: Is there interest in a producer-consumer conference?

Stoltzfus: Yes. The Kuwaitis are afraid this will mean a confrontation, but are ready to talk. They take keen interest, of course, but will not “set” policy. The Kuwaitis say one thing, then do another. They know oil prices are too high and that in a serious situation they would lose out. They have the second highest proven reserves in the world and are looking at the long run. They know the correct answers, but if Algeria or another such country says something, Kuwait is not really big enough to be of assistance in countering statements etc. (Meaning here was not entirely clear—notetaker) The Kuwaitis hope the Secretary will visit.

Secretary: I plan to visit Kuwait during my next trip to the area.

Ambassador Scotes: North Yemen has a range of problems. It is the poorest of the Arabian Peninsula countries, but also the most populous. They are anxious to have the U.S. play a more active role in channeling aid and in activating the flow of oil money to them. The main problem now is that North Yemen is waiting for the results of the military survey team of late 1974 (November). This is the Fifer report. The team made a survey of Yemeni army needs. The report was intended to provide cooperation with the Saudis in meeting Yemeni needs.

Secretary: Can we spring this loose?

Atherton: We’ll try.

Dickman: The report is not the prerequisite. We are waiting for the Saudis.

Secretary: What do we know now? Why has there been no action?

Dickman: The Saudis must finish their own survey so that we may meet trilaterally.

Secretary to Ambassador Akins: Are you talking to the Saudis about this?

Akins: No. We have never been asked.

Secretary: The policy here is to help Yemen.

Atherton: Yes, but with the Saudis.

Akins: We need to know what the U.S. can supply before going to the Saudis. Can we get this information from the Pentagon?

Dickman: It would be a good idea if Yemen would send a military mission to Saudi Arabia. They could survey the items we could supply but which would be paid for by the Saudis.

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Akins: We don’t need to wait for the Saudis. They may never finish this study. What we need is the Pentagon’s list.

Secretary: We should get a list and send it to the Saudis. Have we got such a list?

Sisco: We can’t be the substitute here but we can be the stimulant.

Secretary: It is our policy to sell (the hardware). We should get the list and ask the Saudis to pay. What about South Yemen?

Scotes: Little hard information is available in Sanaa. The North Yemenis are worried about subversion from the South. They are very concerned about the Egyptian policy of supporting the regime in the South in an attempt to wean the South away from the radical elements. The Egyptians have gotten promises from the South, but the internal situation remains unchanged. Therefore the South is still a potential threat to the North. The North believes the weaning attempt is all right, but should be tied to specific commitments on the part of the South. Money should not just be supplied, but should be tied to specific commitments to change policies vis-a-vis the rest of the peninsula. There is no overt pressure on the border at this time, though refugees, whom the North can’t support because its resources are insufficient, continue to cross the border. South Yemen still sends an occasional sabotage team to keep the North off balance.

The North is worried. It sees no change in the ideological disposition of the South. In the long run, if there is no change, they believe South Yemen could be the springboard for revolt in the peninsula. They are also worried about recent diplomatic initiatives of the south—the effort to gain diplomatic recognition.

Secretary: I assume the Arab-Israeli situation is not a major problem in Yemen.

Scotes: It is there, but not significant.

Stoltzfus: Kuwait is just totally behind the Kissinger policy.

Scotes: The new Yemeni premier and much of the Cabinet are U.S. trained and educated. They have a great fear of radicals. They would like to get rid of the USSR military advisors who are still in country. The U.S. can give more help with the modernization effort in North Yemen such as the loan for the water works and other areas which will show immediate results.

Twinam: Our relations with Bahrain are very close. The Navy problem was solved satisfactorily, as was the technical assistance agreement. The paper work is not wrapped up yet. There could be arms requests. The problem is technical: do they need the arms? They have little oil or money. They look to the U.S. for stability in the Middle East. They are greatly worried that a solution (Arab-Israeli) is not coming fast enough. They support us and our policy on Saudi Arabia and Saudi [Page 114]cooperation. The main future problem is to encourage U.S. business to come to Bahrain.

Stoltzfus: Kuwait is not worried about Iran. They want to cooperate. Iraq is the main concern, especially with the border.

Secretary: I assume from all this that the Arab-Israeli problem is not a matter of concern in the Gulf States.

Mr. Lowrie: It is of great concern in Iraq of course. (The other Ambassadors did not comment except for Sterner and Paganelli—see below). The Soviet Union has suffered a massive defeat in the economic sphere in Iraq during the last 2 years which is comparable only to the withdrawal from Egypt. Virtually every contract is now going to the West and U.S. exports are up over 500% to Iraq. Boeing is supplying all of the aircraft for Iraqi Airways and has the contract for maintenance and repair.

Secretary: What kind of contacts do you have in Iraq?

Lowrie: Our best contact was with the Foreign Minister, who died on his way home from Rabat. Contacts at that level have not been reestablished.

The Iraqis want more U.S. technology and products. They keep the economic/technical relationship separate from the political. We try to support this effort as an area which has many positive opportunities. The political side is bleak: 1) the Kurdish problem continues; 2) the Iraqis are convinced the U.S. gives its active help to the Iranians. The most sophisticated believe the U.S. could call off the Iranians, as they know there is a massive Iranian interference with U.S. equipment; 3) the Arab-Israeli question dominates attitudes. The Iraqis are one of the most extreme nations. They are still at war with Israel. Given present attitudes and past history, statements of current leaders themselves, and the weakness of the regime, if they attempted to change toward Israel they would be knifed.

Secretary: Why? What is the element of weakness?

Lowrie: It is a minority government and a police state, but not a strong police state. The Iraqis have made significant changes, they have army support via political control of the army, but personal rivalries within the party (the last coup attempt was in the spring of 1973) illustrate weakness. Nevertheless, this is still the strongest Iraqi Government since 1958.

Lowrie: The Iraqis also see a direct relationship between the Kurdish and Israeli problem—the common element is the U.S. The Iraqis believe the U.S. uses its special relationships with Israel, Iran and Saudi Arabia to promote U.S. interests to the detriment of Arab interests. The most threatening aspect of this attitude is not immediate, but is felt because of the influence Iraq has on Syria. The Iraqis will insist there can be [Page 115]no settlement of the Arab-Israeli conflict if there can’t be a settlement of the Kurdish problem. They can cause trouble for Asad.

Stoltzfus: There should be some way to indicate at a high level that we would like to resume relations, but we shouldn’t chase the Iraqis or we could have problems with the Soviet Union.

Secretary: We don’t respect Soviet Union spheres of influence. How can we reestablish relations, however?

Lowrie: The Iraqis might not reject overtures, but it is probably premature at this stage.

Secretary: They know where to contact us, when they are ready. After all, they saw David Rockefeller. How much higher can you get?

Stoltzfus: The question is still of importance for Kuwait. Should we hold back military assistance for Kuwait for Iraqi concerns.

Secretary: No.

Akins: Saudi Arabia wouldn’t like to see us establish rapport with the Iraqis. The Saudis have recently admitted for the first time that they are supporting the Kurds, and Saudi Arabia experiences constant propaganda attacks from Iraq. The Saudis would want us to work to get the Iraqi Government changed.

Secretary: One won’t exclude the other. Saudi Arabia won’t object to arms sales to Kuwait and we’ll look over and discuss any overtures from Iraq with Ambassador Akins.

Ambassador Paganelli: Qatar has many problems, yet little substance. It is a small nation with little oil production but a good many business opportunities. The Qataris have strong basic ties with the West, specifically with the UK. They look to us for technology. Constraints on our relations? They have great interest in the Middle East negotiations and support the Kissinger approach, but complain that it is too slow. They want us to pull out the stops to keep Sadat in place. Qataris are concerned by “high level U.S. threats,” but when we presented the arguments concerning those threats as we were instructed, the Qataris said they didn’t believe it would be our policy to wipe out such a small nation. Their policy is to wait and see, and to assess our motives in the Gulf. They want more direct contact and explanation, more consultation, and for us to talk with them not to them. They would like to hear our explanation before they read about something in Reuters.

Sisco: There have certainly been a number of detailed public statements and statements, for example, on the producer/consumer conference.

Paganelli: The Qataris will not allow U.S. investment in Qatar when we make statements such as have been heard. They still see the U.S. as the ultimate guarantor of their safety, but believe we are bent on confrontation in the whole energy sphere.

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Secretary: They must understand that so far all of the confrontation has come from the Arabs. They enacted the Embargo. They raised prices. We have talked, but what have we done?

Paganelli: What they desire is some kind of dialogue, whether the consumer/producer conference or something else. They are also anxious to have a high level visitor: they hope for a Kissinger visit.

Stoltzfus: Ambassador Paganelli would probably agree the Secretary needn’t go to other Gulf countries if he only visits Kuwait, but if he visits Bahrain, then he should visit all.

Paganelli: The Qataris specifically think that if the Secretary visits Kuwait he should visit Qatar.

Twinam: If the Secretary visits only Kuwait, the Bahrainis will understand, but if he goes to one other he should go to all.

Stoltzfus: Visiting a few of the nations would not be good. It is worth saying that there is no security problem in Kuwait.

Sisco: Any security problems elsewhere?

Answers: None.

Atherton: There has been a change in the security situation.

Ambassador Wolle: The Omanis welcome the increase in relations with the U.S. They are approaching the modern world and coming to understand that life means more than just a relationship with the British. They have more contact with others, and the Sultan’s recent visit brought a very favorable reaction. In the military field the question of rights on Masirah Island went well. The Omani Foreign Minister was asked if the American request would give any problems and replied none at all. He could control any opposition from the Arabs. The Omanis are intensely interested in modernization and of course in the Dofar war. They are receiving Iranian help and Jordan has sent a battalion. There are some 3–400 guerrillas fighting.

Secretary: Jordan says the British, Iranians, and Omanis are not fighting.

Wolle: The foreign press has concluded that the British could wipe out the rebels, but are going slow to preserve their position in Oman. However, this is a hard core group operating in very rugged terrain. In January the rebels suffered 70–80 killed in action, so there is certainly some fighting.

Oman is not in OPEC and is glad they do not have those responsibilities. The Arab-Israeli question is never raised. They only give lip service to the issue and attend meetings. They will try to keep Palestinians out of Oman.

Ambassador Sterner: The UAE is distinguished by being a new and loose confederation of small states whose principal motivation is (to [Page 117]find) internal and external policies which will help to consolidate the confederation. In unsettled conditions, they are trying to organize policies which will increase the knitting together of the members, therefore they try harder to cultivate Arab relations. This effort has led to some trouble with the Shah and with Saudi Arabia. The UAE is very realistic. When there is any sign of trouble with the Shah they immediately back off and repair relations. They have given aid to Oman and to North Yemen and support Egypt in its current efforts in South Yemen. All in all their policies show a great deal of realism.

The UAE is perhaps more conscious of the Arab-Israeli question than other Gulf states. The young technocrats in the government, right below Sheikh Zayyed, were mostly educated in Cairo. They are matured Arab nationalists and therefore their attitude toward the U.S. is colored. This also affects bilateral relations. At first (June, 1974) the attitude was curiosity. Now they are more cautious. They are worried we can’t bring off a peace settlement and are also worried that if some agreement is reached on Sinai, the Syrians may be left out. There is a close bond between Sheikh Zayyed and Syria. We have received desultory responses to several of our proposals for closer relations, therefore, we are taking it easy while trying to keep a dialogue open. The UAE is interested in the producer/consumer conference but the Arab-Israeli question and energy policy as a whole are more important. They want something to do; want to have some task. They understand that the U.S. will spend its major efforts in major capitals, and by the time they get down to the UAE nothing is expected. The UAE wants, however, to be brought into the picture, in food for example. They want more than just a visit, they would like to have projects they could work on.

Secretary: First, on the Arab-Israeli question. You should convey to your host governments the U.S. determination to move ahead in the near future. They should understand we face massive problems domestically. Good intentions are not sufficient. This is the first administration to move at all, but we must move step by step or all will be lost. Other Congressional actions could be repeated here if we don’t move circumspectly. We have nothing against moves in Egypt and Syria together, but the time necessary to include Syria will likely mean a settlement will be more protracted. It is important to move one step at a time. The U.S. has no interest in a divided Arab world.

The Soviet Union wants to go back to Geneva. The first action thereafter would be an attempt to seat the PLO. This would be the worst thing in the world. Whatever the attitude in the Arab world, in the U.S. the PLO are thought of as terrorists. Within the first two weeks we would have a total hangup. Gromyko would present a list 175 paragraphs long and the Soviets would then take the position as lawyers for the Arabs with the U.S. on the other side.

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It would be easy to start in Geneva but hard to get something out. If we move at a careful pace, we are now at a point where results can be achieved without high expectations. But, it would help if we make clear our special problems in Arab countries.

Since the U.S. is providing the movement, they must trust our judgment. The next few months will tell. As a result of this trip, I am very optimistic. It will be tough, very tough. Sooner or later we have to solve the Syrian side, but the Arabs must get it out of their heads that if we say it will happen it will. We may go to Geneva, but that would mean a guaranteed stalemate. Your clients should remember it is Israel which wants to go to Geneva so they can play the delaying game. The U.S. groups which support going to Geneva are: 1) pro-Soviet and 2) those who want to see a stalemate. In Geneva we would face all the dilemmas of constant maneuvering for position which would make America’s position harder. The job ahead will be hard. It will be murder. But in our problems with journalists and congressmen, the groundwork has been laid. Without great work this would have been blown.

Akins: The King wonders whether a global approach under you, not Geneva, would work.

Secretary: That must be done at some point, but as late as possible to avoid domestic uproar. Under me? The Soviet Union wouldn’t like that. Syria would have to split with the Soviet Union.

Sisco: I doubt that the Arabs really want us in the middle.

Akins: And after the next step?

Secretary: We might go to Geneva for a few months and then try the global approach. Don’t trumpet the fact, but executive authority is now weaker than at any time in the post-war era. This is not a judgment of the President (by Congress), but a statement of Presidential/Congressional relations. Actions by Congress regarding Turkey, the Soviet trade agreement, etc. illustrate this. You must keep this in mind. Understand, we need to move, and we think we’ll succeed.

There is no area with more nonsense spoken than energy. We are trying to reduce the power of OPEC. We are trying to decrease our dependence on OPEC and to restore the West’s freedom to act. Without this a sense of impotence will seize Western Europe and Japan until vague fears about what the oil producers will do will create unmanageable abuse. I am not saying we want confrontation. We don’t, and we don’t have to have confrontation. What leads to this belief (that we want confrontation)? A misreading of our statements. We said we won’t use political or military force to bring down prices. We have said we would act in the case of actual strangulation. They (OPEC) must create that situation, it can’t arrive in current circumstances. We have meant to avoid three possibilities:

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1. To discourage threats to use the oil weapon in the current situation.

2. To encourage moderates so they won’t rely on the Soviet Union.

3. To decrease the readiness to go to war because they (Arab side) rely on the oil weapon.

We won’t threaten force in this situation to achieve our goals, which should be the subject of a producer/consumer conference. Force would demand strangulation, which (latter) would not be in the Arab interest. We are perfectly willing to go to a producer/consumer conference, but we want a statement about what they want to talk about. What are their goals? They should describe 2 weeks of such a conference. I fear that if we go ahead prematurely with no idea what will be discussed, a deadlock will result. We do not even have agreement on an agenda. If we play the card with no result, confrontation will be more likely than with no conference. If the meeting is not carefully prepared and the Europeans try for a special relationship it could end in a nightmare.

We are prepared to begin bilateral talks immediately (on producer/consumer). Let each say what they want and we will respond. We must distinguish between willingness to talk and hesitation to talk until positions are defined.

When the US goes to the preparatory meeting we will be fairly rigid. The danger is that the meeting will turn into a “General Assembly” meeting. Problems are: (1) will discussions include all raw materials, etc.; (2) will the Europeans try for a special relationship with OPEC; (3) what will we discuss? We can’t talk about price till we get the other things settled. The last thing we want is confrontation. We want a serious dialogue. We are prepared now for a bilateral exchange of ideas. We would like to settle the issue of the consumer/producer conference, as it concerns each nation, immediately. We don’t want a multilateral mass meeting. We are facing today a world-wide mass challenge to the nature of industrialized society. If this turns into worldwide confrontation it will not help producers either. We must work together: the oil producers must be able to invest the money they earn, they must have stable investment policies, they need our cooperation on their projects. We must define the relationship under which we will discuss a long-term supply relationship (if lower price, price must be guaranteed for a certain period). Selling this last idea will be a problem in the U.S. The President accepts these ideas if they (OPEC) want, as well as an investment program. We will work harder on this than on any other problem.

We are not opposed to indexing. The producers can’t say, however, as many do, that prices are too high and also ask for indexing. In fact commodity prices are going down now so an indexing tied to [Page 120]commodity prices would not be in the interests of OPEC. If they think sloppily they will fall in a trap. Has the fact that we face the problem of inflation with recession penetrated? It could be, on supply and demand alone, that a drop in oil prices will result and that there will be an energy surplus in 5 years. They may well be able to get a higher price now than in the future. The U.S. will invest $500 billion in the future and will spend $20 billion on exploration. We will find something. The U.S. industrial machine will succeed. It is not even a scientific problem. We know what to do, we don’t need great discoveries. They are found. We just need to make them economical. Oil prices of $6.50 to $7.00 per barrel are feasible except for synthetics. When this happens, given the oil available, the price will come down. Therefore, it is not definitely a sellers market. If OPEC countries analyze the situation they may not be so tied to indexing. I would like you to ask whether people are ready for preparatory talks on this subject.

Stoltzfus: It is not so much what we do in having the conference, but the fact that we show they are sufficiently important to talk with them.

Scotes: Too many countries have been lumped together here. Iran seems to be the source of most trouble in this area, the other little Arabs are not. We can establish rapport, and it is important not to lump Iran and Venezuela with the Arabs.

Paganelli: The time element is important. It is essential to make our approach before the March 4 OPEC meeting. We need material one week from Monday, (Feb. 24).

Secretary: Tell your governments that within a week you will have authority to talk. There is no confrontation in our attitude. We will send the instructions. Under Secretary Robinson will make the same points in his trip (and will plan another as soon as possible).

Paganelli: If we tell them first, then follow up with a special emissary, it would be more effective.

Secretary: We don’t expect too much from OPEC meeting in March.

Paganelli: The ostensible purpose (of the March meeting) is to prepare for the preparatory conference (for the producer/consumer conference).

Robinson: The purpose for my current visit is to talk to key leaders in the area.

Secretary: We will send instructions to Ambassadors in all OPEC countries.

On US/Iranian relations. In the peninsula the Iranians are depicted as the villains. I am not sure that this is the case. Your clients are no doubt delighted to see someone push so that they can blame them. For political reasons Saudi Arabia couldn’t and won’t take on Algeria regarding oil prices. We have a common interest with Iran. Iran’s [Page 121]conduct of foreign policy supports us. They have said they won’t participate in an embargo. Thus we have resisted advice that we have a special confrontation with Iran. The cost of such a confrontation would be out of all proportion to the gains. It would not be in our interests. If we did create such a confrontation and managed to get, say, a $1 per barrel reduction in oil prices, what would it be worth? We value our relations with Iran. We don’t recognize the Iranian preeminence in other parts of the world (in the Gulf). We want to stay in step with Saudi Arabia and Iran, but will not see Iran as a special villain. We don’t exempt Iran from any analysis. They are vulnerable. A cut in production would hurt them, whether it meant the same production for lower prices or lower production at the same prices.

Secretary departed for his next meeting.

  1. Summary: Kissinger met with the Chiefs of Mission of the Gulf and Arabian Peninsula Embassies to discuss regional issues, with emphasis on Saudi Arabia.

    Source: National Archives, RG 59, Central Foreign Policy File, P820123–0946. Secret; Nodis. Drafted by Butcher. Copies were sent to the White House. The meeting took place in Riyadh, during Kissinger’s February 10–15 trip to the Middle East.