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

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

Jidda, undated

SAUDI ARABIA—AN ASSESSMENT AS OF JANUARY 1, 1980

SUMMARY: The year 1979 has been a difficult one for Saudi Arabia—as it has for the USG–SAG bilateral relationship. The year 1980 will not be less difficult for either and could well see a substantial deterioration in the “special relationship.” Four major problems, which faced Saudi Arabia in the last year, seem at this time to have no real solution in sight, and may get worse in 1980. These are:

1) Destabilizing ripple effects of the religious revolution in Iran, together with similar but unconnected events elsewhere, such as the Mecca incident here;

2) Failure to achieve a satisfactory solution to the Arab-Israeli dispute;

3) Continuation and expansion of the Russian threat; and

4) Corruption in the Western sense.

Developments in these four areas in 1980 will have an important effect on the future of the Saud Royal Family and the nature and scope of our bilateral relationship. USG capacity for being helpful is limited largely to (2) and (3) above. However, our actions in these two areas may well be determinative of the future of the present Saudi Arabian Government. Since the availability of adequate energy supplies for the free world during the next decade depends in large part on the continuation of the present government in Saudi Arabia, the national interests of the United States are indeed at risk here in 1980. END SUMMARY.

INTRODUCTION

The year 1979 saw three main events that have had and are having profound effect on the government and people of Saudi Arabia. They were:

1) The development of a full-fledged religious revolution in Iran, which not only toppled the Shah from his well-entrenched throne but sent shock waves throughout the Muslim world;

2) Events culminating in the signing of the Egyptian-Israeli peace treaty;² and

3) A continuation of the Soviet threat—including the South Yemen (PDRY) invasion of North Yemen (YAR),³ and as this is written, the direct invasion of Afghanistan.⁴

THE IRANIAN RELIGIOUS REVOLUTION

The shock effect of the Khomeini revolution was felt far beyond Iran’s borders. In Saudi Arabia, the fall of another monarch was in itself disturbing to the SAG ruling family. The fact that the monarch in question was a neighbor across the Gulf and enjoyed the full support and confidence of the United States was even more upsetting. The constant broadcasts by Iranian militants over Radio Tehran calling for the overthrow of “the corrupt Saudi monarch” has served as an almost daily reminder of the dangers that can emanate from a fanatical government in a neighboring state.

In addition, Saudi compliance with our request to increase oil production substantially to ease the problems caused by the disruption of Iranian oil exports, and Saudi willingness to keep prices well below that of other countries have increased tensions with other Arab oil-producing states. Likewise, more and more Saudis are beginning to question the validity and worth of the USG–SAG “special relationship.” The Saud family is being criticized for its accommodations to USG, especially in oil production and pricing. More and More Saudis, both in and out of government publicly and privately are blaming USG for contributing to the Shah’s demise and are pointing to the close relationship between the Shah and the U.S. with its parallels to the SAG–USG relationship. The feeling of probably a majority of Saudis now is that the U.S.-Saudi relationship is top-heavy in favor of USG. Fortunately the top leadership, Fahd, Abdullah and Sultan, do not agree with this sentiment.

The full impact of the events in Iran were brought home to the SAG ruling family by the seizure of the Holy Mosque in Mecca on November 20.⁵ Even though there was no connection between the two sets of events, the Mosque incident was a ringing warning to the SAG that “it can happen here.” A searching reassessment and re-evaluation of all SAG policy, foreign and domestic, has been triggered by the Mecca affair. The results of this inward and outward look will be reflected in the SAG’s relationship with the United States during 1980.

EGYPTIAN-ISRAELI PEACE TREATY

Saudi Arabia was forced by Egyptian-Israeli peace treaty to choose between its close friend the United States and the rest of the Arab world (except Egypt). The choice was not easy, in view of the importance that the U.S. attached to the treaty, but in the end it was dictated by a reasonably firm conviction that the Camp David accords would not work because Begin would never make the concessions necessary to defuse the Palestinian problem. That conviction has been strengthened by the lack of progress since signing of the treaty. The tensions have been heightened by President Sadat’s personal attacks on the Kingdom and its leaders. There is little chance, in my opinion, for lessening of tensions, at least prior to the exchange of ambassadors on February 26. This exchange will be a symbolic act of great annoyance but also of great significance to the Arab world. Failing drastic eruptions as a result of Israeli-Egyptian exchange of ambassadors, the tensions will continue to increase as the autonomy talks go toward their May deadline.⁶ In the unlikely event that the autonomy talks result in an acceptable solution to the Palestinian problem, the entire atmosphere will change dramatically for the better overnight. However, in the event that the autonomy talks do not meet the deadline, or produce only an agreement not satisfactory to the Palestinians or the rest of the Arab world, a mini-crisis will then arise in the USG–SAG relationship.

We have, throughout the period of autonomy talks, taken the position that we would exercise our prerogative as a “full partner” in the event that Sadat and Begin were not able to reach a satisfactory solution to both the Palestinian and Jerusalem problems. The Saudis, therefore, expect us to take a public position in the negotiating process if a satisfactory solution is not reached by the May deadline. A failure to do so would be viewed by the Saudis as a major breach of faith and an admission that either (1) the U.S. considers the Camp David accords effectively dead; or (2) at a minimum, that the present U.S. Administration is powerless to do anything at this time of election anxieties and rivalries and, therefore, the USG is just shelving an issue so crucial to the area in order to buy “election” time.

THE SOVIET THREAT

The biggest single plus in the USG–SAG bilateral relationship in 1979 was the President’s action when PDRY forces invaded North Yemen. The expediting, under emergency powers, of planes and equipment to North Yemen, the sending of the F–15’s, the stationing of the AWACS in Saudi Arabia, the sending of a military planning team, and the sending of substantial naval forces into the Indian Ocean, restored in the Saudis’ minds the credibility and reliability of USG as a friend and ally in time of need.⁷ Had this not been done, I do not believe that the Saudi Government would have increased its oil production as it did in July,⁸ and maintained its moderate pricing policies.

As this is written the events in Afghanistan are still unfolding, but the President’s firm stand against the Russians will provide added reassurance to Saudi Arabia that we are their best, in fact, their only effective protector from Soviet aggression.

CORRUPTION

The issue of corruption is the greatest single threat to the continued stability of the SAG ruling family. While there have been from time to time evidences of crackdowns on corruption, there are increasing signs, both within and without the Saudi Government, that the problem has not been seriously addressed and is getting worse instead of better. The fact that these attacks have come from many quarters, all accusing members of the Royal Family of corruption, has begun to have a cumulative effect on perceptions throughout the society.

One of the saving factors is that the wealth of the country is so enormous that the alleged commissions and other evidences of what—by Western standards—would be called corrupt practices have not as yet interfered with gradual improvement in the living conditions of any Saudi. The Saudi version of the welfare state provides, or subsidizes, most necessities but disparities in the distribution of wealth remains—especially between the cities and the villages where benefits are only now beginning to arrive. However, the condition is serious and hard to explain. For example, some of the severest critics of corruption are themselves in a series of enterprises with various members of the Royal Family, the profitability of which has been assured by royal influence. Contrasted with our Western concept of “conflict of interests” this society, indeed societies in the Third World, goes by what may be described as “compatibility of interests,” another one is “spread the benefits.”

The problem of corruption is a difficult one and I do not know of any truly effective means that we can use to help correct the situation.

CONCLUSIONS

The year 1980 will probably produce even greater strains on the USG–SAG “special relationship” than did 1979. Two factors will be determinative of whether the bilateral relationship improves or deteriorates: (1) Progress on Mideast peace; (2) Effectiveness of U.S. moves to counter Soviet aggression in the area.

Progress on the Mideast peace does not mean a complete or immediate solution to the Palestinian and Jerusalem issues—although of course such a result would be a welcome Utopia. The Saudis will be satisfied with less, especially if they receive our assurances that we will continue to work for more.

The Saudis fully expect the May deadline to pass without a solution to the autonomy issue. In that event, they expect USG to take a public position on this point. A failure to do so will mean to the Saudis that we have tacitly approved what they consider Begin’s stalling tactics. By implication, this will mean to them that we are approving what amounts to a separate Egyptian-Israeli peace.

I cannot emphasize too strongly how detrimental such a scenario would be to our bilateral relationship in all of its aspects, including oil production and pricing. While the Saudis continue to say that they will not use the “oil weapon,” such a statement is more and more considered to refer to an oil embargo of the 1973–74 type. Their accommodations to U.S. needs in terms of both production and price have been a gesture of support for President Carter and his Mideast peace efforts. If the time ever arrives (and it may well do so in May 1980) when the Saudis are convinced that the Administration no longer has the will or the ability to bring about a lasting Mideast peace, then the motivation for accommodation to USG needs will be lessened. A possible—even probable—result by July of 1980 would be a reduction of production to 8.5 MBD or less, and movement toward a price change comparable to the “oil hawks” (including Mexico and Great Britain) namely, a range of $30 per barrel and upward.

The Saudis will be watching closely USG actions to counter aggression in Afghanistan. Any Soviet moves in Pakistan or Iran will further heighten the already extreme concern which is felt here. If we can show the same decisiveness and achieve the same results as in the YAR–PDRY incident of last February, then our bilateral relationship will be substantially enhanced. The real bottom line in our relationship is U.S. security in exchange for Saudi oil. When the Saudis are reminded of their vulnerability to Soviet aggression, then our response is critical and, if positive, is most beneficial.

RECOMMENDATIONS

1) That we reassure the Saudis by both word and deed that we will not be satisfied with an Egyptian-Israeli peace leaving unsolved the questions of the Palestinians and Jerusalem. Ambassador Linowitz has the key role and we are furnishing him some detailed suggestions.

2) That we continue to work and consult closely with the Saudis on how to counter the Russian threat, much as we have done in the past year. Small gestures, such as expediting arms and equipment to them would be most helpful as a symbolic, as well as practical, gesture. (For example, to speed up deliveries of the F–15 by six months would be very meaningful to the key SAG military and political figures)

3) That we continue to recognize and work patiently with SAG in meeting and solving the problems of modernization at a pace acceptable to their prevailing cultural norms.

John C. West
Ambassador

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 68, Saudi Arabia: 12/79–1/80. Secret. Carter wrote “Good J” in the upper right-hand margin of the report. West attached his report to a January 11 letter, in which he noted that his appraisal was “not as optimistic as some in the past,” and that “frankly, faith in you is main factor holding our ‘special relationship’ at its present high level.” Attached but not printed is a January 30 memorandum from Brzezinski to Carter forwarding West’s letter and report. Carter initialed Brzezinski’s memorandum. For West’s previous appraisals, see Documents 154, 176, and 196.
2. See footnote 7, Document 188.
3. See Documents 261 and 264.
4. The Soviet Union invaded Afghanistan on December 25, 1979.
5. See Documents 201 and 202.
6. Reference is to the ongoing talks on Palestinian autonomy held between Egypt and Israel as stipulated by the March 1979 Egyptian-Israeli Peace Treaty. A deadline for the conclusion of those talks had been set for May 26. For documentation on this issue, see Foreign Relations, 1977–1980, vol. IX, Arab-Israeli Dispute, August 1978–December 1980.
7. See Documents 268, 271, and 275.
8. The Saudi Government announced on July 3 that oil production would be increased. Telegram 174919 to Alexandria, July 6, transmitted a letter for Strauss to deliver to Fahd expressing Carter’s appreciation for the increase. See Foreign Relations, 1969–1976, vol. XXXVII, Energy Crisis, 1974–1980, Document 223.