Recommendation to Supply Egypt Food to Bolster Nasser
(June 18, 1966)
This memo relates to a food deal for Egypt,
as Egypt is lacking in food
and has poor agricultural production. In it, the USA urges a credit
sale of wheat to Egypt in light of Nasser's
growing stability and the possibility of strengthening the Soviet position
if the U.S. does not act.
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. 20, Arab-Israeli Dispute
1967-1968. DC: GPO,
2001. |