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

72. Telegram From the Embassy in Oman to the Department of State and the Department of Defense¹

Muscat, April 8, 1980, 2030Z

927. From Bartholomew. DOD for ISA. Dept for PM—O’Donohue. Subject: US-Oman Facilities Negotiations: Economic and Security Assistance Aide Memoire.

1. (S-entire text).

2. Below is text of classified aide memoire on economic and security assistance. Both sides agreed to consult on public announcement of commission.

3. Two and a half hour meeting involving Foreign Minister Zawawi, Senior Economic Advisor Sharif Lufty and Omani Ambassador to US Suleiman focused almost entirely on question of levels of financing of joint commission projects. After extensive recapitulation by Zawawi of political and economic importance of “high level of concessionary loans” for FY 82 and 83 and long hassle, Bartholomew tabled total package of 25 million dollars per year for FY 82/83 composed of annual 5 million dollar ESF grant to support joint commission plus EXIM credits and ESF loans. Bartholomew related 25 million dollar level to 25 million dollar FMS level in FY 80 and 81. Omanis flatly rejected level as not enough to impress anyone and inconsistent with total relationship we were trying to build, especially since EXIM credits were not sufficiently concessionary. Omanis then countered with proposal for 50 million dollar annual ESF loan which Bartholomew said U.S. could not even approach. Fifty million dollar package annually for FY 82/83 (including annual 5 million ESF grant and EXIM and ESF loans) was then tabled to close out issue. After Omanis pressed, they were informed that proportion of EXIM would be at least 70 percent (based on total 100 million dollar package), which set off another long wrangle. Omanis then countered with insistence that annual 50 million dollar commitment be open-ended and not tied to FY 82 and 83 alone. Omanis then asked for statement of US intent to seek to maintain levels and to increase ESF loan proportion. Omanis insisted that some prospect for the future was essential to settle for these levels for FY–82 and FY–83. Bartholomew agreed to consider point. Zawawi closed discussion by repeating importance Omanis attach from outset to economic dimension, and said this was absolutely vital concern for Oman.

4. Accordingly, seek Washington approval on following language for incorporation in aide memoire: “In implementation of such programs, and in support of the objectives of the Joint U.S.-Oman Commission, the United States Government is prepared, subject to congressional authorization and appropriation, to seek in FY’s 82 and 83 a total of 90 million dollars consisting of Export-Import Bank long term credits on highly favorable terms, and Economic Support Fund concessional loans. Thereafter, again subject to congressional approval, the United States would look forward to seeking levels similar to those in FY 82–83 and to increase the proportion of ESF loans. Oman agrees to match the level of ESF loans in each year.”

5. On security assistance portion of aide memoire, we plan to incorporate following language: “When an emergency exists in which an expedited transfer of defense articles to the Government of Oman is required, the United States Government is prepared to take such measures as are possible under U.S. law to effect the transfer and expedite delivery from available U.S. sources. In determining the availability of sources, we will give consideration to articles located at facilities being used by the United States Armed Forces in Oman.” This is a response to long Omani argument for assured access to materials stored in U.S. facilities in Oman which we resisted on grounds of legal restraints and policy.

6. Aide memoire below incorporates changes in paras 4 and 5 above. Firm judgment here is that Omanis would balk at moving ahead without approved fallback on economics and this type of language on future as set forth in para 4. Zawawi stated several times that he regarded it as vital to Omani interests and to our overall relationship to have something respectable. With these changes, believe we can have assistance aide memoire and construction aide memoire (septel)² wrapped up tomorrow, and can settle remaining questions concerning access agreement (septel)³ expeditiously. (Cover note to access agreement will be addressed tomorrow.)⁴

7. Action requested: approval of language in para 4.

8. Begin economic and security assistance aide memoire:

“Aide memoire draft 4/4/80.⁵

I refer to the recent discussions between our two governments regarding a framework for bilateral cooperation relating to economic development and trade, defense equipment and training, and development and use of facilities in Oman, in order to enhance the ability of Oman to maintain its defense capability, independence and territorial integrity, and to promote peace and stability. As a result of these discussions and as part of this framework, I was authorized to confirm to the Government of Oman the following measures regarding the provision of security and economic assistance to the Government of Oman, subject to the annual authorization and appropriation of funds by the Congress and other United States laws.

The security assistance measures include:

—We are now taking the measures necessary to make available $25 million in FMS financing to Oman for fiscal year 1980.

—Subject to congressional authorization and appropriation, we affirm our intention to make available an additional $25 million in FMS financing to the Government of Oman in fiscal year 1981.

—These FY 80 and 81 actions will represent important first steps in establishing a longer term cooperative security assistance relationship. (The United States has also approached Saudi Arabia on the question of providing financial assistance to fund Omani acquisition of military equipment.)

On equipment, the United States is prepared to respond quickly to Omani requests for information on any items recommended by the defense requirements survey.

When an emergency exists in which an expedited transfer of defense articles to the Government of Oman is required, the United States Government is prepared to take such measures as are possible under U.S. law to effect the transfer and expedite delivery from available U.S. sources. In determining the availability of sources, consideration shall be given to articles located at facilities being used by the United States armed forces in Oman.

With regard to the specific questions raised during the visit of the Foreign Minister to the United States,⁶ I am pleased to confirm that my government has moved quickly to respond to the concern of the Government of Oman and has agreed to the following:

—The sale of C–130 or L–100 aircraft

—The sale of Sidewinder missiles, of which 60 are to be delivered within 6 months

—The sale of the DSU–31/B fuse for the Sidewinder

—The sale of 6 M–60 tanks, with delivery by November

—Expedited delivery of TOW missiles and launchers, with 10 launchers and 220 missiles to be delivered in July, 1980, and 10 launchers and 220 missiles in December, 1980

I also confirm that the United States recognizes the heavy stress Oman places on economic cooperation and that:

—The United States is prepared to institute and participate in a Joint US-Oman Commission on economic and technical cooperation. The Joint Commission would be located in Oman and operate under the co-chairmanship of the appropriate Omani (official) and the U.S. Ambassador to Oman.

—United States Government technical personnel would be stationed in Oman with the Joint Commission to work with their Omani counterparts as an integrated Joint Commission staff.

—We are prepared to provide up to $5 million in grant Economic Support Funds annually beginning in fiscal year 1981 and subject to congressional approval, as our contribution to the operation of the Commission. As was stated during the recent discussions, the Government of Oman agrees it will also contribute to the Commission’s operation.

—The role of the Commission would be to serve as a central point for developing economic and commercial ties between the U.S. and Oman, with particular emphasis on the transfer of U.S. technology to foster Oman’s development.

—As appropriate, the Commission would draw on the resources of AID, the Export-Import Bank, OPIC, and U.S. agencies with international technical or development roles (e.g., the Departments of Health and Welfare, Agriculture, Transportation, and US Corps of Engineers) to develop the coordinated programs to enhance the development of Oman and to strengthen economic and commercial ties between the two countries.

—In implementation of such programs, and in support of the objectives of the Joint U.S.-Oman Commission, the United States Government is prepared, subject to congressional authorization and appropriation, to seek in FY’s 82 and 83 a total of 90 million dollars consisting of Export-Import Bank long term credits on highly favorable terms, and Economic Support Fund concessional loans. Thereafter, again subject to congressional approval, the United States would look forward to seeking levels similar to those in FY 82–83 and to increase the proportion of ESF loans. Oman agrees to match the level of ESF loans in each year.

—The Commission would also seek to draw on private U.S. sources of technology and on private business as well as foundations and educational institutions.

—Within the framework of this Joint Commission, the US Government will be prepared to work with the Government of Oman in identifying possible economic development projects for joint financing, drawing on the resources described above. Such projects could include:

(A) Rural area irrigation and water catchment

(B) Crop diversification

(C) Health services

(D) Basic vocational and technical education

(E) Coastal and deepsea fishing

(F) light industry (based upon labor availability and work force intensification guidelines approved by Omanis)

(G) Highway and road network development

(H) Maritime service industries

(I) Air service industries

(J) Mining

(K) Telecommunications

The United States confirms its proposal that a special USG team visit Oman to discuss formation of the Joint Commission and to begin initial discussions to identify possible projects and programs for consideration, if the Government of Oman wishes.

With further respect to Oman’s economic needs, it is the view of the U.S. Government that its contemplated military construction program is substantial, and will have a significant positive impact on the Omani economy.

As stated in our recent discussions, the United States has also made approaches to other friends and allies to urge their political and economic support for Oman and will keep Oman informed of the results of these approaches.

American Embassy, Muscat

April, 1980”

Wiley

1. Source: National Archives, RG 59, Bureau of Politico-Military Affairs, General Program Country Files 1980–1984, Lot 86D371, Box 2, Indian Ocean Base Access Negotiations. Secret; Niact Immediate; Limdis.
2. The Embassy sent the draft construction aide-mémoire in telegram 928 from Muscat, April 8. (National Archives, RG 59, Central Foreign Policy File, D800174–1081) The final text, accepted by the Omanis on April 9, was sent in telegram 975 from Muscat, April 10. (National Archives, RG 59, Central Foreign Policy File, D800179–1112)
3. The final text of the access agreement, granting the United States military aerial and sea facilities at Masirah, Khasab, Thumrait, and Raysut, was initialed by Bartholomew and Zawawi on April 9 and sent in telegram 971 from Muscat, April 10. (National Archives, RG 59, Central Foreign Policy File, D800179–0847)
4. The text of the cover note to the access agreement, addressed from Wiley to Zawawi, and agreed and initialed by Bartholomew and Zawawi on April 9, confirmed that, as a result of the U.S.-Omani negotiations, “agreement was reached on the use of certain facilities in Oman by the United States in accordance with and subject to implementing arrangements as may be agreed from time to time by our two governments.” (Telegram 976 from Muscat, April 10; National Archives, RG 59, Central Foreign Policy File, D800179–1098)
5. The Embassy sent the final text of the aide-mémoire, accepted by the Omanis on April 9, in telegram 974 from Muscat, April 10. (National Archives, RG 59, Central Foreign Policy File, D800179–1045)
6. See Document 60.