170. Telegram From the Embassy in Morocco to the Department of State1

2215. Dept pass White House for the President from Secretary Kreps. Subject: Meeting at the Palace Between his Majesty King Hassan and Secretary Kreps, April 3, 1979.

1. (S) Entire text

2. Today the King received me in his office in Rabat. He saw me alone with only our U.S. interpreter Alex Toumayan present, and we talked for over an hour. His welcome was warm and genuine. He was most gracious in his references to his meetings with you and what he [Page 415] described as the “good vibrations” he had felt and the good rapport between you. His tone throughout was friendly, informal, candid and relaxed. I had expected a more general meeting, but the King’s choice was clearly a private session, despite the fact that the Prime Minister, two other Ministers, and two Ambassadors were kept waiting throughout the audience. An account of our meeting follows.

3. In greeting the Secretary the King said that he was not prepared to discuss economic matters in English. He could afford a grammatical mistake, but could not afford to make a mistake when discussing figures. The Secretary said that she had talked to the President before she left and that he took a great interest in her mission. She was bringing his personal regards and a personal message from the President.

4. The King stated that President Carter had done a great deal and history would note his record. A foundation was one thing—results were another. The secret of overall success is rapid transition to self rule on the West Bank and Gaza. Under the treaty this would take two to three months (sic). Otherwise, we would have a situation where the Palestinians, PLO and the other groups will be trapped in a three-way situation. (1) Engage in subversion in Israel, which they cannot pull off. (2) Terrorism in other Arab countries which is totally illogical. (3) Retaliation against residents of the West Bank, meaning fighting against other Palestinians. The only way out is quick passage to self-rule.

5. The period of five years allowed for the creation of a Palestinian state in effect boils down to no more than two and one-half. We cannot afford to let anything tarnish what the U.S. has done for peace. As for Jerusalem, Presidents Carter and Sadat were right not to raise it. Begin has closed the door. Religious considerations override anything else. Better to wait for the socialists to come to power in Israel. Someone like Shimon Peres will settle this matter in a more flexible manner. Those were the King’s views on the subject in case the President should ask, as he well might.

6. The Secretary expressed her gratitude and that of the President for the King’s courage and leadership since President Sadat’s initial visit and also praised the King for all he had done during the fall for the sake of peace. She stressed that the President, Secretary Vance and all members of the administration were primarily concerned at present over President’s Sadat’s possible isolation after Baghdad.2 The King reassured her completely on that score. He pointed out that Prince Fahd may soon become Foreign Minister and since he is coming to his villa in Fez, he will come to talk to the King about this. The King assured the Secretary that he and the Saudis had decided to scream [Page 416] and yell like everyone else at Baghdad but not change anything they were doing. He asked her to convey this very confidentially to the President and said that only two or three of his Ministers were informed. [garble] Secretary thanked him for these reassurances and said she knew that President Carter would appreciate them very much.

7. The King expressed his worry over two situations (1) The Soviet Union has recently suffered a defeat in Vietnam. It is a diplomatic defeat because the Soviet Union did not honor any of its treaties with Vietnam. Furthermore, two-thirds of the people of the Soviet Union are Asians and they do not like to lose face. He fully expects to see a trouble spot develop somewhere around the world in the coming weeks as part of a global drive on the part of the Soviet Union to score a token success somewhere. (2) The situation in Iran which the King had discussed at considerable length when in the States.3 The King felt that the Shah was not completely out of the picture. Let us assume that in an empire like Iran each different ethnic group now asking for autonomy should receive it—this could only lead to a confederation. In the United States local origin does not matter, but in Iran everybody would want to be the head of a new confederation. It is conceivable that within the constitutional framework the son of the present Shah could play the role of a unifying national symbol. The Shah himself had told the King he was completely disgusted and would never ascend the throne again. The King considered that this was not an urgent matter but one that the President might want to keep at the back of his mind.

8. The King asked for the help of the President and the Secretary with respect to the First National City Bank (FNCB) withholding payment on $450,000 worth of checks drawn by the Shah on his account at FNCB. The checks were presented for collection by the Moroccan bank which had first been assured in writing (copy available) that the funds were available. Three days later FNCB announced that it had been requested by the Iranian National Bank to freeze the account and was so doing. It was not the first time that FNCB had been unfair in its dealings in Morocco. The Secretary assured the King that should follow this up as best she could with both the President and FNCB.

9. The King described the present difficulties in Morocco as being of an acute financial nature, more so after the oil price increase of the last couple of days. But there was no way to stop Morocco’s economic “take-off”. In Morocco social, educational and economic problems are interlocked. Since all education is free for the public, in ten years the entire budget will go for education if no solution is found, and 15,000 new teachers must be trained each year. By the year 2000 if 36 new [Page 417] classrooms have not been built every day, the requirements cannot be met. This is clearly impossible as both the Secretary and the King agreed. The time may come, the King said, when he may have to decree that higher education must be paid for by those who can afford it.

10. At the same time, the King said, one cannot have situation where industrial projects are waiting to be carried out and there is a lack of technically trained staff to carry them out. The King knows that agriculture will remain the prime resource of Morocco—both land and sea cultivation. He looks to oil shale as the major resource for the future, giving the preference to the “hammer” in situ process which has a cost of $9 per barrel. Oil shale permits energy self-sufficiency in Morocco.

11. In agriculture the problem lies in the lack of large cultivation areas permitting intensive cultivation. The King was anxious to have the Secretary help in arranging for agribusiness groups to come to Morocco. The Secretary expressed our keen interest in developing relations between Morocco and the agribusiness sector. The President of OPIC had discussed those possibilities. We are eager to cooperate by linking projects and potential investors. The Secretary had worked with the Ministers of Commerce and Agriculture outlining the process which we could follow. The King announced the recent creation of an inter-ministerial task force to facilitate foreign investor contacts. This would change what he described as a situation where, typically, an American investor spends three months making the rounds of Ministries to secure various permits and after three months gives up and goes home. This inter-ministerial task force will meet every two weeks and examine foreign investor proposals. They will set aside those they do not want. Those that are going forward will be accepted and signed simultaneously by all Cabinet Ministers. This streamlining will facilitate matters as will also the sending to the Moroccan Embassy in Washington of a strong agribusiness/commercial unit.

12. The Secretary expressed her gratification and stressed the excellent rapport she had established with the Ministers with whom she had had working sessions as well as with the Prime Minister. She felt they were eager to address themselves to existing problems in order to move forward in the sense desired by both President Carter and His Majesty.

13. The King went back to energy and costs to state that so far Morocco was paying for the cost of the inter-African force in Zaire, $55 million in cash so far, and when the Belgian Foreign Minister had asked how Morocco would be reimbursed the King had said no bill would be presented but he would like the U.S., France, U.K., Belgium and the FRG to invest in specific projects in Morocco up to the equivalent amount. The EXIM Bank could be the instrumentality through [Page 418] which the USG would make such contribution. EXIM was already very active in Morocco. They could take a share in phosphates, Bureau of Mine Research and Prospecting (BRPM), oil, etc. EXIM had helped Morocco acquire its first 747. Morocco was ready for a second one because it was such an eminently profitable aircraft.

14. The King asked for the Secretary’s help in resolving the delicate matter of the alleged bribe paid by Grumman Aircraft to a former Lebanese Prime Minister who was alleged to have then turned it over to a Moroccan figure. The King was emphatic in stating that he wanted the President to assure the U.S. Attorney General that this matter must be explored thoroughly and all possible light shed upon it. The entire truth must come out. The Secretary responded that although she was aware of the problem she had not been briefed about it in detail. She knew that the Attorney General would pursue this matter very seriously and she would discuss it with the President, because he, too, would want this point to be put to rest quickly.

15. The King invited the Secretary to come back for a private vacation with her family. He expressed interest in having his children know the Secretary’s children. He felt it was particularly important for the Crown Prince, age 16, to know younger people slightly older than himself. The King invited the delegation to come in for greetings and summarized very briefly for Minister Guessous some of the points he had discussed.

16. As the Secretary was departing, the King asked when a mission of U.S. business investors could be arranged.

17. The Secretary responded that we had not brought investors on this trip because we felt that additional preparations were necessary. Once sufficient preparations are completed, a mission could be arranged at the King’s convenience. The King concurred that the schedule should be carefully worked out in order not to waste time.4

  1. Source: Carter Library, National Security Affairs, Brzezinski Material, Brzezinski Office File, Country Chron File, Box 33, Morocco: 1979. Secret; Immediate; Nodis. Printed from a copy that was received in the White House Situation Room.
  2. See footnote 7, Document 101.
  3. See footnote 2, Document 161.
  4. In telegram 2228 from Rabat, April 4, Kreps reported to the President on her visit to Morocco, commenting that “our mission was unexpectedly successful and I believe may contribute to your broader objectives.” (National Archives, RG 59, Central Foreign Policy File, D790154–0412)