Foreign Relations of the United States, 1977–1980, Volume XVIII, Middle East Region; Arabian Peninsula

176. Report Prepared by the Ambassador to Saudi Arabia (West)¹

Jidda, December 31, 1978

SAUDI ARABIA—YEAR’S END 1978

SUMMARY

U.S.-Saudi relations reached an all-time high during 1978, until the strains of the November Baghdad Summit² and the December OPEC action on oil prices³ created tensions causing some deterioration—the full extent of which is just now being assessed. Three main factors during the year contributed to the development of an even closer and more cordial relationship than had heretofore existed. They were:

(1) The F–15 sale;⁴

(2) The continued personal involvement of the President and his Administration in the problems of the Middle East, including not only the Arab-Israel dispute but the security concerns of the region as well;

(3) The Saudi perception of increased Soviet movement in the area with the resulting reminder to the Saudis that protection by the U.S. is their only real security and future salvation.

Two negative factors were:

(1) The strain in the Arab world produced by the Camp David accords and culminating in the resolutions adopted at Baghdad; and

(2) The higher than expected oil price increase at Abu Dhabi.

These two negative events underscored the two basic goals of Saudi foreign policy and their increasingly incompatibility as events unfolded during the year.

The two basic aims of Saudi foreign policy are:

(1) To maintain a sufficiently friendly relationship with all other Arab states, including the radical-rejectionist group, so as to constitute some semblance of Arab consensus thereby preventing not only disunity among the states but also preventing the fomenting of internal unrest in Saudi Arabia by the radical states and groups; and

(2) To maintain a sufficiently friendly relationship with the United States to insure the protection by the U.S. from foreign aggression.

Maintaining these two goals became increasingly difficult in the last two months of 1978.

COMMENT: One inescapable conclusion must be reached based on past Saudi performance and especially the experience of the last sixty days: Saudi Arabia will do everything possible to avoid making any major decision which might alienate either the U.S. or its Arab brothers. Given this fact and the present leadership picture here, we conclude that the Saudis will continue to try to please both sides. A clear decision favoring one or the other’s interest will be made only on a crisis basis, and then largely influenced by emotion on the facts of a given situation, all of which is often based to a surprising degree on a feeling of personal obligation or commitment by King Khaled or Prince Fahd.

Saudi support for the Camp David accords has been disappointing. The Saudis have tried, without marked success, to chart a course that would provide enough support to mollify if not satisfy the U.S. and at the same time maintain their Arab ties. They will, in my opinion, continue this tactic indefinitely even if it is showing evidence of pleasing no one.

The Saudis are already defensive, claiming more success than the U.S. has credited them in moderating the Baghdad meeting and holding oil prices down. This attitude, and our reaction to it, will be an important factor in our relations in the immediate future.

On the economic side, Saudi support for the dollar has been one of the most satisfying aspects of our relationship for the past year. However, the failure of the Saudis to hold the oil price increase to below 10% has caused shock and disappointment in the Western world, especially the United States.

The Saudis are frightened to the point of panic about the Soviet threat. The thrust of their foreign policy is based on a deep fear of the Soviets and their allies. The Arab-Israeli problem is important but is secondary. The Saudis are concerned about the perceived threat not only to their oil fields, but to their very survival. Their fear has been heightened by two recent events:

(1) the unrest in Iran, which they consider a part of the overall Soviet offensive which has the oil of Saudi Arabia and the Gulf as its ultimate target;

(2) A report which they have commissioned on the high cost of future Soviet oil production. The conclusion of that report is that the almost prohibitive cost of expanding current Soviet oil production will make cheap Saudi oil such an inviting target that the Soviets may well move at an early date to achieve their takeover or control of Saudi oil.

The internal situation remains stable. The precarious condition of King Khaled’s health and his age mean that there could be a change in the ruler at any moment, but we think that, in all likelihood, the transition will be smooth and that Crown Prince Fahd will succeed to the throne and Prince Abdullah will become Crown Prince. However, there will probably be some maneuvering in the Royal Family until the question of who is next in line for Crown Prince after Abdullah is settled.

Further bilateral problems are being caused by periodic resurgence of conservative Muslim sentiment. This upsurge bears only a superficial resemblance to the movement in Iran. Its manifestations include crackdowns on women and foreigners working (without visas) and expressions of concern by some traditionalists over foreign influence and customs. However, it does not pose any threat to the King or his Government, especially since the King is regarded as head of the community of the Muslim faithful in the Kingdom.

Another marked difference between the situation in Saudi Arabia and Iran is the complete absence of any student unrest here. For 1979, I would suggest at least three main objects of U.S. policy to include:

(1) Securing further Saudi—and through them—Arab support for Camp David;

(2) Insuring continued support for the dollar to include:

(a) Rejection of any attempts to change from the dollar as currency for payment of oil;

(b) Retention of Saudi monetary reserves in dollar assets;

(c) Insuring, at a minimum, that there are no further oil price increases regardless of fluctuations of dollar; if possible, forestalling implementation of some of planned phased increases;

(d) Making a strong request to the Saudis to make the decision—and spend the money—to increase their productive capacity so as to meet the minimum projected needs of the Western world in the 1980’s.

END SUMMARY.

INTRODUCTION

This is the third informal summary which I have prepared since arriving here in June 1977.⁵ The discipline of preparing it has been helpful to me and hopefully the product is worthwhile. It is a personal rather than an Embassy document, but I acknowledge with appreciation the assistance of key members of the staff who have read and added their comments and suggestions.

Many significant events occurred in 1978 which affected U.S.-Saudi relationships. We will review and attempt to assess the major ones.

THE F–15 SALE

The most important—and most helpful—event in U.S.-Saudi relationships this year was the F–15 sale. In fact, this transaction may well be the most significant single happening in the history of our bilateral relationship. The planes themselves were recognized early on as probably the least important part of the equation, but their symbolic value was beyond calculation. At issue were (1) the credibility of a U.S. pledge given by three Administrations; (2) the justification of Saudi Arabia pro-U.S. policies in the eyes of the remainder of the Arab world; (3) the willingness and ability of the President and the Congress to withstand the pressure of the heretofore unbeatable Israeli lobby in the U.S.

The firm, uncompromising action by the President and Secretary and the subsequent approval by the Senate reassured the Saudis that a promise by the U.S. was reliable and could be depended upon. Saudi Arabia could and did use this happening to prove to her Arab brothers that the U.S. is a worthwhile friend and ally. A failure to approve the sale would have caused an irretrievable loss of face for the Saudis in the Arab world.

Saudi Arabia had long held the simplistic view that the U.S. Government and its supporting political system were completely controlled by the Israeli lobby in the U.S. President Carter’s early statements on the Mideast problems were received with pleasant surprise and polite skepticism. No Arab country, including Saudi Arabia, believed that any U.S. President would take any position in the Mideast contrary to that of Israel. If such an anomaly actually happened, the U.S. Congress would immediately nullify or at least neutralize such action. The F–15 debate, acrimonious and bitter at times, was beneficial. It proved to the Saudis—and the Arab world—that the U.S. could and would take and implement a major foreign policy position contrary to the expressed organized opposition of Israel and its U.S. lobby.

An additional benefit of the F–15 case was the Congressional visits which were undoubtedly a major factor in the Senate vote. The Saudis are traditionally hospitable and when they saw that most U.S. Congressmen and Senators came to Saudi Arabia willing to listen, they responded by making effective presentations of the Saudi view and position. This contributed significantly to a better understanding between our two governments.

I think it a fair assessment to say that had it not been for the favorable action on the F–15 sale, there would have been no Camp David. The President and this Administration established beyond question credentials for leadership, fairness and integrity which will continue to be of lasting value in the tangled problems and politics of the Mideast. I believe Sadat felt he could trust the President and the Saudis felt they could support both Sadat and the U.S. in this endeavor.

A word of caution is in order, however. The Saudis recognize the effort made and the result obtained. They appreciate the political risk entailed for all who favored the sale. However, to assume that as a result of that single transaction we can have the Saudis’ support on any given issue at any future given time by simply saying “F–15” would be a serious mistake. While a definite obligation is felt by the Saudis the credit slip is not unlimited or everlasting. The Saudis in fact are beginning to resent an F–15 obligation or having it used publicly as a criticism for them not taking the complete U.S. position, whether it be on the Camp David accords or oil prices. The proper and effective utilization of the political capital still remaining from the F–15 requires not only a setting of priorities but careful advance planning and preparation. A carefully conceived personal request on a given subject from the President to King Khaled would be the most effective vehicle. In that situation, no mention of the F–15 obligation need be made.

PRESIDENTIAL INVOLVEMENT IN THE PROBLEMS OF THE MIDEAST

The continued involvement by the President and key members of the Administration, especially Secretary Vance, after the F–15 matter was concluded has been a healthy plus for U.S.-Saudi relations in 1978. As we will discuss later, the Arab-Israeli dispute is of secondary importance to the Saudis, their paramount concern being their security from Soviet aggression. However, the Saudis realize that the Arab-Israeli dispute is a continuing threat to their good relations with the U.S. They appreciate therefore the time and effort which the U.S. has made to bring peace to the Mideast.

The President’s personal popularity here at year’s end was at an all-time high. The personal rapport which King Khaled and Crown Prince Fahd perceive as existing between them and the President is a potent weapon which, if properly used at the right time under the right circumstances, could conceivably cause the Saudis to make a decision or take a course of action unpopular with the other Arab states.

I have thought for sometime that the commitments made to me by Fahd at our meeting of October 24⁶ with respect to the Camp David accords were a result at least in part of his concern that the President would at his luncheon meeting with the King on October 27⁷ get from His Majesty a sweeping, similar commitment of support which, of course, would be binding on Fahd. He wanted to share in the credit for the commitment, and I think he is now embarrassed that he was not completely able to make good on it at the Baghdad Summit.

THE SOVIET THREAT AS PERCEIVED BY THE SAUDIS

Events of 1978 further confirmed the Saudis’ fear of the Russians and their satellites. At each meeting with the Saudi leadership, whether it be Khaled, Fahd, Abdullah, Sultan, or Saud, the Russian threat is always mentioned, regardless of the purpose of the meeting or the prepared agenda. Every action or lack of action of the U.S. is weighed by the Saudis on the scales of our recognition of the Soviet threat and our will and capacity to counter it.

In the Saudi mind, the events of the past year in the Yemen and Iran have provided all the additional proof, if any were needed, that the Soviets are after their oil. The assassination of the President of North Yemen,⁸ the coup in South Yemen,⁹ the presence of Cubans in the latter, the attempted coup of October 15¹⁰ in the former, have all in the Saudi mind been a part of the ultimate design of the Soviets. In addition to the tangible, visible evidence of Soviet intentions, two intangibles are seen as intensifying the danger from the USSR:

(1) Working in Saudi Arabia are nearly a million Yemenis mostly from North Yemen, virtually all with families in their homeland. The Saudis say that in the event of a Soviet dominated regime in North Yemen, the possibility of Fifth Column activities via the Yemen work force here is very real. The pressure which an oppressive government could place on the families of Yemeni workers here could create tremendous internal problems, in the view of the Saudi leadership; and

(2) The Saudis have in hand a preliminary report on a study of the ultimate cost of oil to the Soviets based on the assumption that they have to develop their Siberian resources to meet their increasing demands for their domestic and satellite needs. The conclusion of this study is that the inefficient Soviet system cannot afford the cost of increased production from these sources without severe strains on its economy. The study, therefore, concludes that the lure of cheap Saudi oil will be a temptation increasingly hard for the Soviets to resist. This study, now being circulated and discussed in the highest Saudi circles, has further increased their fears.

The Saudis, as indicated above, seek constant reassurance of our security commitment to them. However, they are not content to sit back and count on the U.S. to protect them. They are constantly working to eliminate Soviet influence from the neighboring Arab countries. The best example is their conciliatory gesture toward South Yemen at Baghdad even though from past experience President Ali Nasir is known to be a confirmed Marxist. They have offered to resume aid to South Yemen in exchange for a South Yemeni agreement to refrain from provocative actions against its neighbors. The Saudis hope ultimately to woo South Yemen away from the USSR and, through aid, make it possible for the South Yemenis to dispense with Soviet aid and to rid themselves of the Soviet presence.

THE INTERNAL SITUATION

As of the end of 1978, the internal situation in Saudi Arabia continues to be remarkably stable. Concern has been expressed in some quarters in the U.S. that the conditions causing unrest in Iran are endemic to Saudi Arabia and that there will be an inevitable spill-over here. In my opinion the differences in the situation here and Iran are so marked that the chances of an eruption here like that across the Gulf are remote.

First and most important, the Saud family is a unifying rather than a divisive force in the country. King Khaled is universally loved and respected. He is a kindly, father figure. He and other key members of the Royal Family maintain a close relationship with the people. Every citizen knows he has the right to take a problem or grievance to the King or a Province Governor’s majlis and receive a hearing. There is virtually no criticism of the King—even his pending acquisition of a Boeing 747 airplane fully equipped as a hospital has not been the subject of any critical discussion. The excesses of some members of the Royal Family have been frowned upon and discouraged.

Secondly, the average Saudi is well fixed insofar as creature comforts and opportunities are concerned. There is no student unrest either within or without the Kingdom. There is unlimited free education, schools and medical care. Roads, sewerage and water facilities are being supplied as fast as money and modern technology can perform.

Above all, there are no taxes! Therefore, dissent from the have-nots is minimal simply because that class is amazingly small. The young Western-educated Saudis who return from abroad find responsible government positions or opportunities in the private sector unequalled in any other society at any time. The rate of return of Saudi students studying abroad is almost 100%. With the continued increase both in production and price of oil, and the continued expansion through exploration of oil reserves, there is no visible end to Saudi prosperity and the accompanying opportunities it offers.

With respect to a coup involving the armed forces, in every branch of the military members of the Royal family hold many of the key positions. They include operational directors, key staff positions, pilots, ground unit commanders as well as administrative positions. The fact that the military forces are completely separated with the National Guard under Prince Abdallah and MODA under Prince Sultan is probably deliberate rather than coincidental. In addition a third military group, the Coast Guard and Frontier Force with armor cars, light tanks, etc., is under the control of Prince Naif, the Minister of Interior. There are always potential Qadhafis in any military force and the threat of a military coup can never be ignored. However the chances of a successful military coup happening today in Saudi Arabia is in my opinion remote at this time.

While the situation today is stable, there are certain contingencies that could produce an overnight change. The Kingdom is ruled by King Khaled, but in effect governed by Crown Prince Fahd. The combination has worked well and the sudden transition following King Faisal’s assassination was remarkedly successful with no apparent problems in the ensuing 4-year period.

The precarious condition of the King’s health has focused attention on the matter of succession. Fahd is the agreed successor to the King and speculation has centered on the rivalry between Abdallah, presently number three and Sultan who is number four in the present order of succession. Abdallah’s stutter is considered by many to be a substantial obstacle to his being King. Sultan is a vivacious, clever person and his control of the Ministry of Defense and Aviation (MODA) gives him a power base unequalled elsewhere in the Kingdom. Likewise he is of the Sudayri seven, a full brother of Fahd and therefore a formidable figure from all aspects. Abdallah on the other hand has the support of the bedouins, plus the anti-Sudayri group. (The surviving sons of the late King Abdul Aziz still number about 30, all of whom are consulted on matters of succession, regardless of whether they are in government. The “Sudayri seven” are a powerful group. In addition to Fahd and Sultan, they include Naif, Minister of Interior, Ahmed, his deputy, Salman, Governor of Riyadh, Turki (recently resigned as Dep MODA) and Abdul Rahman, a businessman who has never held public office.

The rivalry between Abdallah and Sultan could produce a major division in the family, especially if Sultan attempted to become Crown Prince upon the King’s death or abdication and Fahd’s succession to the throne. The chances of such an open split are in my opinion considerably less than 50–50. In fact, there are already signs that the decision has already been made in the Royal Family that Abdallah will be made Crown Prince with the understanding that, upon his succession to the throne, Sultan would become Crown Prince.

A different picture would be presented if Fahd died or became incapacitated prior to Khaled’s death or abdication. Of some immediate concern is the matter of Fahd’s health and attitude. He is the consummate politician, polite, suave, persuasive and likeable. There have been reports and criticism of his indecisiveness, his occasional depressions and his neglect of important issues. Undoubtedly, he has not found the process of government an easy one, especially in the last year. He is further handicapped by not having around him any substantial number of trusted advisors upon whom he can rely with complete confidence. All this has made his decision-making process both arduous and thankless. Decisions have generally been made only after a consensus is reached; and if it is not, then the decision is simply postponed. The results have been a general lack of decisiveness and a failure to make the hard but meaningful decisions.

There are other related factors that are cause for some concern with respect to internal stability and tranquility. These include a resurgence of religious fervor with an assertion that foreign influences are eroding traditional values. One of the manifestations of this attitude has been a renewed enforcement of the regulations against women working in certain organizations alongside men, and a denial of work visas and even permits for visas for foreigners.

The conflict between the modernizers and the traditionalists is not new; in fact it is one of the interesting and spirited parts of the history of Saudi Arabia. A number of religious scholars opposed the radio until King Abdul Aziz demonstrated that the Koran could be transmitted by it without demonic distortion. The order that schools be established for women (made by Fahd as Minister of Education and approved by Faisal) caused bloody rioting in the streets. In fact, the brother of the young prince who assassinated Faisal was killed in those riots. The present leadership recognizes that modern ideas must inevitably come to the Kingdom, and they are moving ahead as fast as is necessary to placate the modernizers but at the same time not so fast as to arouse the active opposition of the traditionalists. They make a distinction when comparing the situation here to Iran. They say that the Shah brought Westernization as well as modernization and herein contributed to his problems.

Whether or not this distinction is valid, the current Saudi leadership is not faced with organized religious opposition. While there are religious thinkers and religious teachers in Saudi Arabia, there is no clergy in the sense of Christianity or even of Shi’a Islam, as it is practiced in Iran. By the time of the death of the founder of Wahabism, the religious movement had been thoroughly absorbed in the society. The religious and political realms are fused, and the ruler of Saudi Arabia is simply the leader of the community of the faithful. His decrees and laws must conform to the religious consensus. The important Saudi religious figures do not have the direct political influence of their Iranian counterparts, where a religious leader with a reputation for piety and learning may attract a large number of personal adherents who follow his guidance in matters of politics as well as religion. The religious authorities in Saudi Arabia are in effect judges in the shariah courts dispensing justice according to the Koran as interpreted by the Wahabi scholars. At a lower level, the muezzins and the Friday preachers are paid by the Ministry of Religious Endowments and seldom stray into the political realm.

Another group that may someday present a threat to the Royal Family are the technocrats. The influence of this group is substantial and is increasing steadily. As of now, they have no political base. There is no indication that any of this group is anything but completely loyal to the Royal family. However, the possibility of a change in that attitude is always there. The technocrats are an interesting group. (I call the group that includes Finance Minister Aba Al-Khail, Planning Minister Nazer and Industry and Electricity Minister Gosaibi the “Young Turk California Mafia”—a term which has been picked up in other circles.)

Aba Al-Khail, the Finance Minister, is the most powerful of the technocrats. In 1978, he won in a power struggle with Oil Minister Zaki Yamani over the future management of ARAMCO. As a result, when the nationalization is complete, the company will be run as a department of the government on a government-approved budget. The importance of this to the U.S. is that it means that any funds for expansion of oil productive capacity must come from the Treasury. The funds required are substantial, i.e., roughly somewhere between one and three billion dollars for each one million barrel increase in productive capacity. Aba Al-Khail does not believe in any increase in productive capacity. In the attaining and exercise of his power, Aba Al-Khail has made enemies, including some in the Royal family. He has said “NO” to many projects including some of the pet projects of Princes. He is sometimes described as the ideal treasurer, a man with long pockets and short arms.

The Royal family must of necessity depend upon the technocrats for the management of the vast resources and the implementation of the ambitious goals of the Kingdom. At this stage there are no apparent conflicts between the two although that possibility cannot be completely discounted at some future time. It is too early in the country’s emergence and development to make even a tentative prediction. However, I would predict that the technocrats will continue to work in close tandem with the Royal Family and eventually there will emerge a constitutional monarchy with the technocrat group being the dominant faction.

A LOOK AHEAD—1979

The year 1979 should see the bilateral relationship between our countries continue to improve. Immediate short-term U.S. objectives here should include securing additional Saudi-Arab support for the Camp David accords; strengthening of economic ties including Saudi support for the dollar; insuring the continuation of an adequate supply of oil to meet present and projected future needs at affordable prices.

These objectives are all interrelated and to a substantial degree mutually supporting, at least from the U.S. viewpoint. Viewed from the Saudi standpoint, in the short term, they present some difficulties, both internally and in the Arab world.

However, the ultimate in Saudi interest in the long term—survival—depends upon their protective relationship with the U.S. This fact is known and appreciated by the ruling group here. Reminders of this dependency are occasionally necessary, but unless handled with sensitivity and diplomacy, cause resentment.

The proposed visit of Crown Prince Fahd to the United States in early 1979 will, in my judgment, accomplish much and set the tone for good relations throughout the year.

John C. West
Ambassador

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 67, Saudi Arabia: 6–12/78. Secret. West sent the report to Carter under a two-page handwritten letter dated December 31. In the letter, West praised Carter for his 1978 accomplishments and noted that the attached analysis “is not supposed to be an all-out comprehensive analysis, but a more or less personal appraisal of what I consider to be key points in our relationship.” (Ibid.)
2. See footnote 2, Document 175.
3. See footnote 3, Document 175.
4. See footnote 2, Document 172.
5. West sent his first informal summary to Carter in August 1977. See Document 154.
6. See Foreign Relations, 1977–1980, vol. IX, Arab-Israeli Dispute, August 1978–December 1980, Document 106.
7. During a private visit to the United States for medical treatment in October 1978, Khalid met with Carter at the White House on October 27, where they discussed the Middle East peace process. For the substance of the meeting, see Foreign Relations, 1977–1980, vol. IX, Arab-Israeli Dispute, August 1978–December 1980, Document 108.
8. See Document 243.
9. See Document 244.
10. In telegram 5137 from Sana, October 15, the Embassy reported: “Elements of the military, military police, and national police apparently attempted a coup d’etat in early hours of morning October 15. After early success including seizure of airport, coup failed when armored brigades to north [of the] city confronted dissident units.” (National Archives, RG 59, Central Foreign Policy File, D780422–0030)