Foreign Relations of the United States, 1981–1988, Volume XXIV, North Africa

314. Memorandum From the Under Secretary of State for Political Affairs (Eagleburger) and the Under Secretary of State for Security Assistance, Science, and Technology (Schneider) to Secretary of State Shultz¹

Washington, January 11, 1984

SUBJECT

• Additional Assistance for Tunisia

We have real problems with Tunisia in the wake of the bread riots. Much of the problem is psychological, rather than economic, stemming from Tunisia’s understandable tendency to see a Libyan hand everywhere and uneasiness over the Bourguiba succession. Nonetheless, we need to respond quickly with a solid gesture that demonstrates to the Tunisians we are willing to help.

Vernon Walters is now in Tunisia with a package consisting of 1) improved terms for our $134 million CCC credit (bureaucratically no mean achievement, but worth little over $500,000), and 2) agreement to increase deliveries of some military equipment. While Alan Wallis believes this is sufficient, we disagree.²

There are two ways to supplement this package—PL–480 (I) reserve funds and ESF. PL–480 (I) has the advantage of meeting the proximate cause of the riots—the increased price of bread. It is also easier to deliver in that it does not require painful reallocation of limited ESF funds. On the other hand, the Tunisian Ambassador, supported by Senator Percy, has appealed for ESF funds. His preference is both expected and understandable. ESF is essentially budget support, and would give the Tunisians more flexibility. Further, there is no doubt the Tunisians could use the money, e.g., to repair damage to the transportation system caused by the riots.

NEA believes, and we agree, that the best course is to provide Tunisia with $5 million from the PL–480 (I) reserve immediately. Bill Schneider thinks OMB can be convinced of the need. We think Tunisian and Congressional pressure for ESF can be managed by a timely offer of PL–480 (I).

In anticipation of the Moroccan delegation’s visit next month, we will be sending you shortly a separate memo on Morocco, which of the two has the greatest need for ESF.³ In both cases, we must recognize that, faced with sizeable ESF shortfalls worldwide, not only is ESF for Morocco or Tunisia a zero-sum game, but it will also require painful reallocations elsewhere, e.g., Oman, Middle East regional, or Zimbabwe. However, the Moroccans cannot go back empty-handed, and some ESF, in addition to PL–480, may be our only recourse.

Meanwhile, we recommend that General Walters be authorized to tell the Tunisians that we are prepared to provide an additional $5 million in PL–480 (I). If you agree, we will try to push this through the interagency process before Walters leaves tomorrow.⁴

1. Source: Reagan Library, George Shultz Papers, Official Memoranda (01/11/1984). Confidential. A stamped notation at the top of the memorandum reads: “GPS.” In the top right-hand corner, Covey wrote his initials above Shultz’s stamp.
2. On January 10, Wallis wrote Shultz that he did “not concur in the additional PL–480 Title I. We have provided Dick Walters a respectable package to go along with a basically ‘hand-holding’ mission. The improved blend on CCC credits was a significant concession not lightly obtained. In addition, we are manipulating the military credits and deliveries to Tunisia’s advantage.” (Ibid.)
3. See Document 222.
4. Shultz approved the recommendation. A stamped notation next to his initials reads: “JAN 11 1984.” Below the recommendation. Covey wrote: “NEA AND T alerted. JC 1/11.”