215. Letter From the Ambassador to Morocco (Reed) to Secretary of State Shultz1
I want to call your attention to a growing problem in our relationship with Morocco that I believe must be dealt quickly. Morocco is going through the most severe economic crisis since its Independence; senior civil and military officials are becoming increasingly bitter at the pressure they are under from the United States Government and the possible Brooke Amendment sanctions to repay their arrearages on foreign military sales.2 The money is not there—imports are now under [Page 463] strict control, government budgets are being slashed, and the Saudis are not coming through with anticipated financing. In FY 1983 Morocco will have to pay the United States more than $45 million for loans due and $18 million to avoid application of the Brooke Amendment. In FY 1983 Morocco is scheduled to receive $25 million in FMS grants and $23 million in FMS loans, a net to Morocco $3 million.
The reason for the bitterness is not that we are rich and they are poor. They rightly believe that Morocco has done more than its share to support U.S. strategic interests. Morocco has sought political friendship with the United States of America—The King has chosen sides! Hassan II signed an Access and Transit Agreement,3 in effect for President Reagan, which was strongly criticized by his close Advisors as a “giveaway”. Morocco is engaged with the United States in a series of major joint military exercises that are clearly in the interests of U.S. military commands. U.S. Nuclear powered vessels are welcomed in all Moroccan ports and received with great honor. As we drain their meager resources at this painful period senior officials feel they are being “used” by the U.S.A. Morocco knows that the United States is taking more out of Morocco than we are putting in.
We must take a very hard look at converting a major part of our Foreign Military Sales program to grants. The rationale is Morocco’s support for U.S. military security, the importance to us of having a strong Moroccan military as a stabilizing force in North Africa and its availability for emergencies elsewhere. Most important at this critical time, is the role King Hassan is playing and will be able to play in the Mid-East peace process, both as a Chief of State and as Chairman of the Arab League. Morocco is a strong and useful friend of the United States. This is not the time to squeeze Morocco!
Just a few weeks ago the Administration needed funds for El Salvador and took $52 million from Morocco’s 1983 FMS loans of $75 million.4 I strongly advocate that we restore the $52 million to Morocco in the form of grants. For fiscal year 1984 and onward we should look at a) rescheduling their debt and b) a much higher ratio of grants to credits in security assistance.
What I am arguing for costs very little in relation to its contribution to U.S. national security and political interests. It is inconceivable to me that two F–15s (which cost in the range of what we are seeking) provide more security for the United States than a strong strategic partnership with Morocco. It is entirely within our power to maintain and build that partnership. President Nixon, who knows Morocco well, told me “it would cost us peanuts!”
[Page 464]As a former banker I’ve never been known to be the type of person who panics, but this situation in Morocco causes me very grave concern. Recent events have convinced me that it is imperative that a group be set up to resolve the arrearages problem in time for the U.S.-Moroccan Joint Military Committee meetings to be held in Washington, May 11–12.
- Source: Reagan Library, Near East and South Asia Affairs Directorate, Morocco 1983 (04/01/1983–05/03/1983). No classification marking. An attached handwritten note from Reed to Teicher reads: “HJT—We are heading for BIG trouble. And for chips! I’ve done my best but I now need help before we wake up to ask ‘how did this happen?’ All the best. JWR.”↩
- Reference is to Section 620(q) of the Foreign Assistance Act of 1961 (P.L. 87–195), which prohibits the distribution of any new foreign assistance to any country that fails more than one year past due in servicing its debt obligations to the United States.↩
- See Document 207.↩
- See Document 214.↩