Memorandum on Food Aid to Egypt
(June 18, 1966)
This memorandum from Rostow to President Johnson
concerns food aid to Egypt.
The Egyptians want a renewal of a very generous food aid program, as
the current program was due to run out within the month. Rostow suggests
that they do not provide the current food aid program but instead switch
to a program that would sell to Egypt on generous credit terms (but
less generous than the current program) which would also provide American
farmers with some income.
Memorandum From the President's Special Assistant
(Rostow) to President Johnson/1/
Washington, June 18, 1966.
The Egyptians asked us in March to negotiate a new
one-year $150 million PL 480 agreement. Our present six-month deal runs
out this month.
Nasser badly needs this food--and on heavily concessional
terms if he can get them. His supplies will run out in October. Allowing
time to ship, he must buy somewhere by early August. His economy is
in worse shape than ever--reserves are all but exhausted.
Despite Nasser's need, Secretary Rusk recommends we
not sign a new Title I-IV agreement now./2/ Instead, he proposes we
offer to sell (probably $50 million) on CCC credit terms slightly better
than those the UAR can get commercially from our competitors. We do
not want to refuse to supply desperately needed food (our wheat was
60-70% of the supply in the cities last year). Besides, we want our
farmers to make the sale since it is on fairly hard terms. Congress
will be a lot more tolerant of CCC than of PL 480.
We do not want to give Nasser a flat "No."
This is not necessary, and his violent reaction could cause us a lot
of trouble. Instead, the Secretary would like to leave the door open
to Title I-IV later. He would also continue Title III ($8-9 million
in school lunches), the AID technical assistance program ($2 million)
and the projects we support with our excess local currency.
We recommend this line with some regret./3/ We still
think it is worth trying to get closer to Nasser and to avoid splitting
the Middle East into US and Soviet camps. But Nasser has left us little
choice. He has almost dared us publicly not to renew our agreement.
He has lambasted us on Vietnam. He continues to stir things up in Yemen
and South Arabia. In general, he has not picked you up on the suggestion
you made to Sadat last winter to discuss our differences quietly and
build a more constructive relationship.
We are not quite sure what he is up to. Our guess is
that he is worried about his political base. For the first time, he
has discovered plots among his junior officers and a serious assassination
plot among the educated young men he thought he could count on. His
stalemate in Yemen has alienated the military. So he is caught between
the moderates who know the UAR must retrench to move ahead economically
and his old-timers who talk a good revolution but have no idea how to
develop a modern economy.
Taking the Secretary's line is taking a calculated
risk. Nasser may react violently, but we think he is expecting this
kind of answer so should be braced for it. Our unreadiness to agree
on PL 480 now could hurt the moderate prime minister, who is pushing
a sensible economic program. If he fell, his successor would probably
be pro-Soviet and less sensible economically. It is equally possible,
however, that mounting economic pressures will force Nasser to lean
more heavily than ever on his Prime Minister as the only hope of pulling
the UAR out of its economic mess.
I recommend you approve Secretary Rusk's line./4/
Walt
/1/Source: Johnson Library, National Security File,
Country File, United Arab Republic, UAR Memos, Vol. IV. Secret.
/2/Rusk's June 16 memorandum is attached but not printed.
/3/A June 4 memorandum from Saunders to Rostow states
that the mood at a May 25 meeting of the Interdepartmental Review Group
for Near Eastern Affairs (IRG/NEA) was not angry but "just fed
up." He continued, "We've tried hard over the past five years
to do business with Nasser. But his public comments in the past few
weeks are almost the last straw. We've tried our best to avoid a showdown,
but Nasser seems to be forcing one--for reasons we haven't figured out."
(Johnson Library, National Security File, Country File, United Arab
Republic, Vol. IV) IRG/NEA was one of several interdepartmental groups
dealing with regional issues. Its records are in the Department of State,
NEA/RA Files: Lot 70 D 503.
/4/The approval line is checked.
Sources: Foreign
Relations of the United States, 1964-1968, V. 18, Arab-Israeli
Dispute 1964-1967. DC: GPO,
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