85. Airgram From the Embassy in Saudi Arabia to the Department of State1
SUBJECT
- Quarterly Commentary for Saudi Arabia: Jan–Mar 1973.
INTRODUCTION AND SUMMARY
The period began with the Saudi Arabian Government’s efforts concentrated on the largest Hajj in history, which included an increase of more than one-third in foreign pilgrims over last year.
High-ranking visitors to Saudi Arabia during the first quarter of 1973 included President Franjieh of Lebanon, the Italian Foreign Minister, the Kuwaiti Defense Minister (performing the Hajj), a Syrian Deputy Prime Minister, former U.S. Secretary of Defense McNamara in his capacity as IBRD head, and Prime Minister Al-Hajri of Yemen accompanied by a full retinue from his government. On the other hand, many of the leading members of the Saudi hierarchy, including Princes Sultan and Fahd, and Minister of State for Foreign Affairs Saqqaf, were away during a good part of the period.
The Black September operation against the Saudi Embassy in Khartoum dominated events of the second half of the period. Following outspoken criticism by Saqqaf of the perpetrators of the crime, a high-ranking Fatah member, Abu Hisham, visited Riyadh, saw the King and reported all as being well between the SAG and Fatah.
The period closed in a renewed state of instability, as the Saudis were attacked—by design or by error—by two MIGs at a desert outpost along the South Yemeni border only a few days after an incursion by Iraq against SA’s northern neighbor Kuwait. Although there was no confirmation of reports of Saudi-Iraqi clashes along their lengthy border or of Saudis massing troops there, the SAG was clearly troubled by this new evidence of Iraqi radical activism.
[Page 316]The fourth meeting of the Islamic Foreign Ministers’ Conference in Benghazi, coming in the midst of these other clearly more important events, passed almost unnoticed.
Beginning the year as a 25-percent owner of ARAMCO, the SAG continued to receive increasing royalties from their ever-growing oil production. Nearly eight million barrels a day are now being produced, and reserves are piling up at approximately $130 million a month.
Concluding a chapter in Saudi-US relations that began over a year ago, Ambassador Thacher and Prince Abdullah signed an MOU outlining a government-to-government relationship in developing the Saudi National Guard.
I. SAUDI FOREIGN RELATIONS
A. Black September, Fatah, and the Khartoum Incident
Towards the end of January, Tapline was ruptured at two separate points on successive nights by what was clearly sabotage. Action of the Saudi security forces, once they were forced to concede sabotage was involved, seemed primarily aimed at exonerating themselves of any blame for the affair: no one was ever apprehended, nor was it ever decided who had carried out the sabotage. At the time, however, there was speculation—in view of the apparent reduction in the Saudi subsidy to Fatah and the recently-concluded participation agreement—that the fedayeen (perhaps operating from Iraq) were showing Saudi Arabia it was no longer off limits.
In any case, regardless of who was responsible for the Tapline sabotage, the lack of inviolability of Saudi Arabia from organized fedayeen operations was firmly driven home by the Black September/Fatah operation launched against the Saudi Embassy in Khartoum on March 1.
The Saudis clearly were shocked by the operation, and privately members of the SAG expressed strong indignation over the murders of the two American and the Belgian diplomats. Coming as it did so shortly after the Israelis shot down the Libyan passenger plane over Sinai, many Saudis concluded that the operation must have been planned by Israeli agents who had infiltrated the Black September organization. Publicly, however, there was no official reaction for several days. Then Saqqaf denounced the operation as “evil and bad”, and the perpetrators as misdirected. This denunciation was followed by a visit to Riyadh by one of the higher-ranking members of Fatah and PLO, Abu Hisham (who is apparently Fatah’s new representative for Saudi Arabia). He met with the King and subsequently held a long-winded press conference in his hotel in Riyadh, invoking the glories of Islam, the evils of Zionism, the wisdom of King Faisal, but saying very little factually about the present state of Fatah-SAG relations. [Page 317] Fatah leader Arafat, despite Beirut press reports, has not made a post-Khartoum pilgrimage to Riyadh.
In subsequent discussions between the Ambassador and Saqqaf, the Saudis officially have refused to accept an organized relationship between BSO and Fatah; Saqqaf prefers instead to suggest that various Fatah individuals may, without Fatah approval, be members of BSO. It would seem clear, therefore—partly out of convictions, partly concern for its own protection—that Saudi Arabia intends to maintain its relationship with Arafat and Fatah, though perhaps the SAG will be even more restrictive with its financial support.
B. PDRY/SAG Border Incident; Kuwaiti/Iraqi Border Incident
While relations between the SAG and the Palestinian resistance have thus become more ambiguous, SAG’s always-uneasy relations with the Communist-backed PDRY were also disrupted by an incident March 22 in which two MIGs strafed the Saudi outpost of Wuda’iah, between Shururah and the South Yemeni border. Although the motive behind this attack is somewhat obscure—there was speculation that it may conceivably have been an error—as it occurred within two days of Iraq’s clearly-planned attack against the northern border of Kuwait, there has been speculation by Saudis of coordination between Aden and Baghdad. At any rate, as a result of these two incidents and the Khartoum killings, the line between the various conservative regimes of the area and the “progressive” ones—a line that Saudi Arabia has attempted, and since Nasser’s death somewhat successfully, to blur—is once again being more clearly delineated.
[Omitted here is material on trips abroad made by Saudi officials and visits by foreign leaders.]
II. SAUDI INTERNAL DEVELOPMENTS
A. Participation and Oil Production
As of 1 January 1973 Saudi Arabia was the owner of 25 percent of ARAMCO, which makes it the largest of the five participants in ARAMCO. The satisfactory conclusion of oil agreements between the Iraqis and BPC on the one hand, and the Consortium and Iran on the other, led to speculation at the time that perhaps Yamani would feel the need to ask for even more from ARAMCO. In a press conference and in public meetings during the period, however, Yamani continued to support participation, as opposed to nationalization, and gave excellent and convincing reasons why Saudi Arabia had achieved the best deal for itself for the present time. At the same time Yamani seemed quite concerned with rumored groupings of oil-consumer countries, which he said could lead to an economic “war.”
Oil production continued to rise and was approaching eight million barrels a day by the end of the period. This continuing dramatic [Page 318] increase, coupled with the 10-percent loss through devaluation of the Kingdom’s dollar reserves, may in time precipitate an intensification of the debate between advocates of removing the oil as fast as possible, and those who would prefer to let production level off at some as yet unannounced figure. The supporters of a slowdown have been more vocal in recent months. Their major arguing point is that the Kingdom will be unable to spend the vast amounts of money it will earn in production of 20 or more million barrels a day, and it would be better to leave the oil in the ground until such time as the money it produced could be spent. At the same time, and as part of this debate, Yamani continued to stress that his desire for downstream investments, which had been expressed publicly last fall in New York, was only in order to protect Saudi marketing of its own oil; that to the fullest extent Saudi Arabia intends to use its oil money to reinvest in the Kingdom and thus develop its own industrial base.
Foreign and American bankers continued to visit Saudi Arabia in great numbers and hold talks with oil and monetary officials with regard to the future of Saudi investments. But no decisions were made, and it is apparent that Saudi Arabia will continue in the immediate future to play the conservative investment game it has so far. In this connection, reports that Saudi Arabia had moved vast quantities of dollars during the weeks preceding devaluation were vigorously denied by Governor Anwar Ali; in point of fact, considering the conservative nature of Saudi investments and the lack of sophisticated communications necessary to move money fast, Ali’s denial was certainly correct. In any case, the question of future Saudi oil and investment policy remains unanswered, and one can only conclude from a preliminary review of the situation as it exists today that a key factor in convincing the Saudis to produce the quantities of oil the United States and Western Europe would like is to convince them that they will be able to invest the money productively in their own country.
B. King’s Overland Trip
Following the Hajj, King Faisal returned from Jidda to Riyadh by way of a 10-day overland progress through Medina and the Nejd Oasis areas of Buraida and Ha’il. The Saudi press gave considerable play to the trip; it apparently was the first time the monarch had visited Medina since he ascended the throne.
III. U.S./SAUDI RELATIONS
A. National Guard Agreement Signed
After more than a year of on-again off-again negotiations which had begun with Raytheon, and in which the King and other ranking Saudi officials played an as yet obscure but no doubt important back[Page 319]ground role, Prince Abdullah signed a government-to-government agreement with the United States on March 19. The agreement, in the form of a memorandum of understanding, clarifies the nature of assistance the U.S. will provide to modernize the Saudi National Guard. Although there were no references made to the time period for the modernization, it is clear that the relationship will probably extend for the rest of the decade and longer. Actual work on the program will not begin until later this year, but the Department of Defense team which visited the Kingdom in early March was quite pleased to have brought talks to a satisfactory conclusion. In the future, the Embassy anticipates some disagreements with Prince Abdullah over the nature and scope of the modernization, as the prince is clearly more interested in rapid acquisition of weapons rather than in the essential complementary process of manpower training specified by the MOU.
B. Other Military Requests
As a result of the Wuda’iah incident, the USG has been urged to expedite shipment of munitions for the F–5 aircraft in-country. As the period ended the Embassy, in conjunction with USMTM, DOD and the Department, was attempting to meet the Saudi request.
-
Summary: The Embassy provided its first quarterly assessment of governmental and economic developments in Saudi Arabia for 1973.
Source: National Archives, RG 59, Central Foreign Policy File, 1970–73, POL 2 Saudi Arabia. Secret. Drafted by T. McAdams Deford (POL); cleared by Eugene Bird (POL/ECON); approved by DCM Horan. Repeated to Abu Dhabi, Algiers, Amman, Baghdad, Beirut, Cairo, Dhahran, Khartoum, Kuwait City, London, Manama, Rabat, Sana’a, Tehran, Tel Aviv, Tripoli, Tunis, CHUSMTM, CINCEUR, COMIDEASTFOR, and DIA. On the Khartoum incident, see Document 81.
↩