NOTE: External links to other Internet sites should not be construed as an endorsement of the views contained therein.
| The State Department web site below is a permanent electronic archive of information released prior to January 20, 2001. Please see www.state.gov for material released since President George W. Bush took office on that date. This site is not updated so external links may no longer function. Contact us with any questions about finding information. NOTE: External links to other Internet sites should not be construed as an endorsement of the views contained therein. |
 | FOREIGN RELATIONS OF THE UNITED STATES 1964-1968, Volume XXI Near East Region Department of State |
 26. Paper Prepared in the Department of State/1/ Washington, December 27, 1967. /1/Source: National Archives and Records Administration, RG 59, SIG Files: Lot 70 D 263, SIG/MEMO: #52, 2/9/68, IRG/NEA, IRG/AF Study on "Western Interests in Arab Oil." Secret. No drafting information appears on the memorandum. An attached memorandum from Battle to Katzenbach, January 18, 1968, states that the study was prepared by an interagency group in response to Katzenbach's request at the time of the Senior Interdepartmental Group's consideration of the Holmes report, and was approved by IRG/NEA and IRG/AF. It was forwarded to SIG members by Staff Director Hartman on February 8, 1968. WESTERN INTERESTS IN ARAB OIL Summary During the June 1967 Middle East crisis certain Arab countries attempted to use their oil to retaliate against the U.S., U.K., and West Germany, which were believed to be unfriendly to Arab aspirations and partial to Israel. As a result, partial and total embargoes on oil exports were imposed with the objective of exerting political and economic pressures on the Western countries. These actions, which initially caused a dislocation in sources of oil supply and a sharp rise in prices, were regarded with concern by Western governments. Although the Arab governments later decided to reinstitute exports to Western consumer countries, the danger of recurrence of these embargoes and the continued closure of the Suez Canal require careful appraisal of the role of Arab oil. Libya's geographical position and high production make it uniquely important for Europe today, but neither Libya nor any combination of two major Arab producers will be irreplaceable when the large number of mammoth tankers comes into use next year. The significance of Arab oil and its inherent danger to Western interests lies in the fact that Arab oil, as a whole, cannot be replaced now or at any time in the next ten or fifteen years. The Arab oil producers supply ten million barrels of oil per day, that is, one-third of non-Communist world production. The United States consumes a negligible amount of this Arab oil and has the capacity in the United States and the rest of the Western hemisphere to meet its present and anticipated requirements up to 1980, the final date of the time period projected in this study. Although certain military supplies have come from Arab sources, these would be replaceable at higher cost from Western hemisphere sources. In a physical sense, therefore, the United States does not now or in the foreseeable future require Arab oil. However, about 65% of the oil produced in Arab countries is from United States investments there. According to company sources these investments return an annual profit of about $1.5 billion to the American oil industry and make a net contribution of over $1 billion per annum to the balance of payments of the United States./2/ While these are considerable sums and have great importance to the United States economy, it is believed that the loss of profits would not have more than a temporary depressive consequence. On the other hand, the loss of $1 billion annual credits to the U.S. balance of payments would be a matter of very great concern to the U.S. Government. /2/This does not include investment in downstream facilities outside the Arab world. [Footnote in the source text.] The oil consuming countries of Western Europe and Japan would be very adversely affected should they lose their supplies of Arab-produced oil. These countries now consume about 11.3 million barrels a day of which 8.3 million barrels come from the Arab world. While about 35% of total Arab country output is produced by Western European-owned capital, the loss of all income generated from this production by the Western European countries would be an excessive burden only for the U.K. and the Netherlands. However, if Western Europe and Japan were deprived of all of the oil, undoubtedly a very critical situation would ensue. This heavy dependence on Arab oil can only be partially compensated by additional production, at most 1.6 million barrels per day in the short-run,/3/ leaving a gap of 8.4 million barrels a day which would have to be absorbed largely by Western Europe and Japan. By 1980, these two areas are expected to be even more dependent on Arab oil, requiring 18 million barrels per day of Arab oil of a total consumption of 28 million barrels. Under the most favorable assumption, other free world conventional sources might supply 5 million barrels per day by 1980 while non-conventional sources such as tar sands, shale, and coal might under a crash development program at huge economic cost--mainly to the United States--raise another seven million barrels per day. The shortfall for Western Europe and Japan by 1980 would still be six million barrels per day. Even then, these new supplies would cost at least double the current price. Under these circumstances, Western Europe and Japan are likely to be vulnerable to Arab threats of an embargo of exports. /3/Within six months, given a crash program, a total of an additional four million barrels per day might be produced in the non-Communist, non-Arab world, leaving a deficit of about six million barrels per day. [Footnote in the source text.] While a total embargo may not be regarded as likely, since 90% of the foreign exchange income earned by Arab oil exporting countries/4/ comes from the sale of crude oil, the potential Arab capacity severely to disrupt supplies to Western Europe and Japan cannot be discounted. Such extreme action might possibly occur as a result of renewal of Arab-Israel hostilities, nationalizations, a unified anti-Western policy by the Arab countries themselves and/or Communist domination of the area. (At present, however, Soviet activities do not constitute a major threat.) /4/For Algeria, the amount is 50 percent. [Footnote in the source text.] The danger exists that Western Europe and Japan would be willing to pay heavy political and economic prices to avert the loss of Arab oil. We have, therefore, a prime interest in improving the bargaining power which Western Europe and Japan would have in face of a possible oil export embargo by the Arab countries. Some Arab nationalists are discussing the possibility of the nationalization of Western oil interests and an offer to sell the oil to politically acceptable buyers. This is by no means out of the question. While it would mean the loss of the substantial investment in the area and the loss of a valuable addition to the balance of payments especially for the U.S. and the U.K., at least part of the Free World would continue to receive its energy supplies as the Arab states which might have nationalized would wish to continue to sell their oil and even increase their profits. Given the inherent instability in the Arab world, it is important to seek and develop alternatives to Arab oil while recognizing that complete independence thereof is not likely to be achieved in the foreseeable future. As a tactical matter, to reduce Arab confidence that oil can be used as a political weapon, we should give maximum publicity to new developments. We should do this in a manner, however, which does not give unnecessary offense to the Arabs to whom we should stress that we welcome access to Arab oil so long as it is offered on reasonable terms. The following are specific recommendations: (1) Importing countries should increase their storage capacity to reduce the immediate adverse impact on their economies and to give additional time for economic pressures to attenuate any future Arab embargoes. (2) The search for and development of non-Arab sources of oil should be accelerated to the extent possible. (3) U.S. imports should be kept as at present to a small proportion of consumption and further consideration should be given to imports from the Western hemisphere. (4) Projects to expand production of oil from shale and tar sands should be accelerated. (5) Our NATO allies and Japan should be permitted and encouraged to participate in the development of our shale and tar sand resources. This should take the form of capital investments and sales contracts both of which would help the U.S. balance of payments. Our political strategy should aim at encouraging Western European countries, whose stake in Arab oil is greater than ours, to take greater responsibilities in the Arab world. The Suez Canal remains important economically if not strategically. The closing of the Canal appears also a situation in which the stake of Western Europe and other maritime nations is greater than ours and one on which they might well take the lead. We should give such support as is feasible in terms of our efforts to achieve an overall settlement of the Arab-Israel problem. Without prejudice to the principles governing our attitude on the Arab-Israel problem, it remains important, in light of continued Western dependence on Arab oil, that we maintain and strengthen our position in the moderate Arab states. [Here follows the body of the paper.]
27. Memorandum for the Record/1/ Washington, January 8, 1968. /1/Source: Central Intelligence Agency, Job 80 R-01580R, DCI Ex. Reg. Files, IRG. Secret. Copies of this document with its attachment were distributed to the DCI and seven other offices in the CIA. SUBJECT 1. Assistant Secretary Battle dispensed with further review of the draft NSC Middle East paper, accepting as essentially accurate the assertion that we do not have a comprehensive Middle East policy and that U.S. Middle East policy during the past year had been a patchwork of reactions to crises--Yemen and South Arabia in early 1967, the Athens Coup in April 1967, the Gulf of Aqaba in May followed by the Six-Day June War, Cyprus and the Vance Mission, King Constantine's abortive 13 December coup and, completing the circle, a year-end focus on the Yemen. Although the IRG/NEA had concluded in late 1966 that an updated Middle East policy was an urgent requirement, 1967 had slipped by without real accomplishment. A single IRG/NEA meeting on the Holmes Study/2/ had been inconclusive. The IRG had never met to consider the IRG paper on NEA policy prepared by a small group chaired by Stuart Rockwell. /2/Document 22. 2. Reaction to the paper I had drafted and tabled on 4 January 1968/3/ was that it represented a balanced and streamlined statement of policy but probably exceeded our capabilities. Also, it did not highlight the problems the NSC would have to deal with in 1968. Assistant Secretary Battle said that he had no problem with the substance of the paper; he thought the policy proposed probably came close to the minimum U.S. action required to preserve U.S. interests but that it almost certainly exceeded the means which would be available. /3/Attached but not printed. Critchfield stated that the major U.S. policy objective in the Near East and South Asia in the next year was to preserve the peace while supporting the development of regional solidarity, stability, and independence free from any dominant great power influence. The problem was how to limit the spread of Soviet and Chinese influence while simultaneously keeping the intra-regional conflicts below the threshold of conventional warfare. 3. There was a lengthy discussion of the consideration the IRG should give to anticipated Congressional and public attitudes, domestic politics and limitations on resources in formulating foreign policy for consideration by the SIG, the NSC and the President. Throughout the meetings on 4 and 5 January 1968, the State NEA officers tended to be excessively negative and defeatist in this respect. Several of us, including Mr. John Campbell of State (who is updating a State position on the Holmes Study), argued that the IRG should, within reasonable limits, present the senior policy-makers with a realistic description of the minimum U.S. effort required to protect U.S. interests without attempting to pre-judge what was specifically feasible in terms of politics and resources. 4. Assistant Secretary Battle expressed particular interest in the concept of regional cooperation and solidarity and growing European and Japanese involvement in fields that had been dominated in past years by the U.S. and the U.K. 5. It was agreed that Mr. Campbell would develop an inventory of U.S. assets and liabilities opposite each of the proposed policy measures. Where major shortfalls in our ability to carry out the policy proposed were revealed, the policy-makers would have clearly and separately identified (a) the specific policy proposal, (b) the assumptions concerning political and material resources required to carry out the policy and (c) the assumptions concerning political and material resources available. 6. At the conclusion of the meeting, Assistant Secretary Battle (a) instructed the IRG Secretary, Sidney Sober, to draft a new version of the NSC paper drawing on comments made during the 4 and 5 January 1968 IRG meetings; (b) instructed Mr. Campbell to combine the paper I had submitted with his own efforts to distill something from the Holmes Study and to adopt the formula that the IRG had evolved for dealing with the growing problem of dwindling American resources for conducting foreign policy in the Middle East. 7. The IRG/NEA meeting on 8 January 1968--the third in the current series--will deal mainly with financial and technical problems related to longer-term aid to India and Pakistan. 8. A copy of the initial draft I had circulated on 4 January 1968 which was discussed in the IRG on 5 January 1968 is attached. It has no status as either an Agency or an IRG/NEA document. While it provoked a scattering of nitpicks and a few substantive disagreements on isolated elements, I think it probably represents a solid consensus of what the principals of the IRG/NEA feel should, in 1968, be U.S. Middle East policy. There is a majority view, however, that the means to carry out this policy will not be available. James H. Critchfield/4/ /4/Printed from a copy that indicates Critchfield signed the original.
28. Paper Prepared in the Department of State/1/ CENTO/G-2 Washington, April 18, 1968. /1/Source: National Archives and Records Administration, RG 59, Conference Files: Lot 69 D 182, CF 293, 15th CENTO Ministerial Meeting, London, April 23-24, 1968, Vol. VII. Confidential. Drafted by NEA/NR Multilateral Organizations Adviser Robert A. Stein; cleared by Thomas Ball of the AID/NESA Office of South Asia Affairs, Irving Cheslaw (EUR/BMI), Colonel March (OJCS), Reed (DOD/ISA), Sober, Battle, and Katzenbach. This session of the council was attended by Foreign Minister Ardeshir Zahedi of Iran, Foreign Minister S.K. Dehlavi of Pakistan, Foreign Minister Ihsan Sabri Caglayangil of Turkey, Foreign Secretary Michael Stewart of the United Kingdom, and Under Secretary of State Katzenbach. For text of the communique, see Department of State Bulletin, May 13, 1968, p. 613. For documentation relating to the session, see the National Archives and Records Administration, RG 59, Conference Files: Lot 69 D 182, CF 293, 15th CENTO Ministerial Meeting, London, April 23-24, 1968, Vol. VII, and Department of State, NEA/RA Files: Lot 75 D 312, CENTO Files, 1965-1968 and CENTO Ministerial Files, 1962-1968. FIFTEENTH CENTO MINISTERIAL COUNCIL SESSION Scope Paper I. U.S. Policy Interests CENTO continues to have a positive, if limited, value to the U.S. This value is mainly political. The effectiveness of CENTO as a military alliance is marginal, and its military activities proceed at a low level, but it does continue to have a certain military usefulness. CENTO has provided a security umbrella for the region against Communist aggression, and its existence is a key element in signaling the posture of intent of the U.S. and U.K. to defend the integrity of the region from Communist attack, and of acceptance by the regional members of such support. CENTO increases the U.S. (and U.K.) channels of communication with the regional members and the number of ways we can cooperate with them. It provides our only security tie with Iran. We have a leading role in CENTO economic development activities, the alliance's most active program. Iran and Turkey continue to see moderate advantages in cooperating with us in CENTO, and even Pakistan--which believes that changing circumstances have left CENTO with little current relevance--has been reluctant to cut this tie with the West. Our best course at present is to maintain without significant change our current sympathetic but relaxed policy toward, limited commitment to, and moderately active participation in CENTO. The utility of CENTO to us and our policy of continuing support depend on the regional countries' continuing desire to maintain the alliance. II. Current Situation in CENTO CENTO is in a quiet phase, one of marking time. There is tacit agreement among the partners not to stir up controversial issues or to take initiatives which upset normal cooperation. The active new Secretary General, Turgut Menemencioglu, is fully alert to the special problem of Pakistan's attitude and hopes that new economic initiatives can be found which would be attractive to the Pakistanis. He is looking for ways to make CENTO more meaningful within its limitations, and would like to improve the image of CENTO among the peoples of the regional countries as being relevant and responsive to their own needs. The Secretary General is also seeking to modify some of the formalities and rigidities which have characterized the functioning of CENTO and generally to speed up the completion of business. We are pleased that both Turkey and Iran appear to be increasingly realistic with regard to the limitations on U.S. and British economic aid funds under CENTO. A new disturbing factor is the strain which has recently developed in Iran's relations with the U.K. over the future of the Persian Gulf area, and to a lesser extent in Iran's relations with Pakistan over the latter's increasingly close ties with the Arabs. If these strains are not eased, the alliance stands to suffer generally. III. Scope of U.S. Participation in CENTO There is special importance to our economic support of CENTO which, though limited in volume, is the most "visible" operational effort in which we are engaged under the alliance. The U.S. supports a continuing AID technical assistance program now in the $400,000 range (after a recent $100,000 cut due to the general reduction in AID funds) that is a primary source of substance for the current CENTO economic program. Some other AID funds also get a CENTO label. The U.S. continues to expend substantial funds previously committed to such capital projects as the CENTO railroad between Iran and Turkey. We continue high level participation in meetings of the Military Committee and take an active part in CENTO military exercises, planning, and development programs. We contribute U.S. personnel to the permanent military staff in Ankara, as well as to the civilian Secretariat. We also participate in the activities of the alliance in the field of counter-subversion. IV. U.S. Posture and Aims in this Meeting There are no items on the agenda that should cause real difficulty. The outlook of the British is similar to ours, and we should coordinate generally with them--using care that there is no appearance of our ganging up on the regionals. We and our British hosts for the meeting will: a) expect a wide-ranging discussion of international affairs; b) avoid controversy on the basic military points of difference, while reassuring the regionals of our continuing political and economic support for CENTO; c) support efforts for expeditious conduct of CENTO business. During its thirteen years of existence, CENTO has been helping to stimulate regional economic cooperation and planning among Iran, Pakistan and Turkey. In the past few years the regional members have shown increased interest in such collaboration, as evidenced in their creation of the Regional Cooperation for Development (RCD) among themselves. (The RCD Foreign Ministers are scheduled to meet in Tehran April 14-15.) This is a promising trend which we encourage. We are willing to respond to the regional countries' desires to highlight CENTO's economic development aspect. We are adapting our regular contribution to the economic program to concentrate efforts, as the regionals wish, on the fields of agriculture, industrial development and health. At the same time we expect that more should be done by the regional members themselves to exploit the potential of regional cooperation. The availability of U.S. resources to underwrite CENTO activities is more limited than previously; our CENTO partners are all aware of our balance of payment difficulties. The regional members know too that the great bulk of our aid to them has been under bilateral programs rather than under a CENTO label. The fact that all our assistance, "bilateral" or "regional," has come from the same source should be clearly recognized.
29. Memorandum From the Assistant Secretary of State for Near Eastern and South Asian Affairs and Member of the Senior Interdepartmental Group (Battle) to the Under Secretary of State and Chairman of the Senior Interdepartmental Group (Katzenbach)/1/ IRG/NEA 68-29 Washington, July 19, 1968. /1/Source: Department of State, NEA/IRG Files, 68-29: Lot 70 D 503, U.S. Policy in the Middle East, Final Draft. Secret. Drafted by Staff Director for the Interdepartmental Regional Group Sidney Sober and cleared by Director of the Office of Inter-African Affairs Fred L. Hadsel. SUBJECT /2/Document 30. As requested by you at the 26th SIG meeting, IRG/NEA has prepared a new paper on U.S. Policy in the Middle East. This paper, which I attach for your consideration, takes off from last year's Holmes Study/3/ and, taking into account subsequent analyses of indigenous trends and certain other factors as well as developments during the past year, lays out a comprehensive U.S. strategy for the next five years or so. /3/Document 22. You will note differences between the attached paper and the Holmes Study in geographic scope and in format. After careful consideration, it was decided to concentrate in the revised paper on the Middle East and to touch on North Africa and the Horn of Africa only marginally insofar as they affect our consideration of Middle East policy. Conceptual advantages in a comprehensive treatment including the latter two regions were recognized, but in practice we found it confusing and unhelpful to deal in any detail in one paper with all of the Middle East, North Africa, and the Horn. Therefore we concentrated on the Middle East. (AF concurs in this method of treatment.) In approaching the problem, the attached paper undertakes to set out broad policy considerations and principles to guide us in dealing with the Middle East over the next several years. It does not try to spell out in detail the specific operational means by which those policy principles can or should be executed. This approach makes for a less forceful impression than that conveyed by the Holmes Study, which dealt much more directly in the how of achieving our objectives by offering a large number of current action recommendations. Recognizing that the policy principles remain to be fleshed out, I consider the approach in the attached paper preferable as a basic guide to U.S. policymakers for a five-year period. The essence of the policy set forth in the attached paper is that the United States will continue to be active in the Middle East because our interests require it. We recognize the critical importance of the Middle East especially to Western Europe and hence to our global position. We recognize that we will have a continuing competition with the Soviet Union for influence in the area. In these respects the attached paper and the Holmes Study are in substantial agreement. The principal substantive differences between the two papers revolve around the treatment of the indigenous climate for Soviet penetration and the estimate of Soviet capabilities in the Middle East. The Holmes Study saw the issue basically as a cold-war clash and was more activist in approach, focusing on a direct US/NATO response. The attached paper gives greater weight to factors which temper the prospects for an aggressive policy by the Soviets including (a) other demands on their resources, (b) their own dilemmas in policy choices, and (c) the indigenous forces of nationalism and modernization, which act as barriers to Soviet dominance in the area. Although in its principal policy guidelines the attached paper is basically similar to the Holmes Study, it is less urgent in tone and less demanding in this call for U.S. involvement. It would concentrate on the political aspects of our competition with the Soviets, and build on strengthening the local forces of independence while maintaining the overall U.S.-USSR military balance. I believe the flexible approach advocated in the attached paper is the more realistic. In considering the attached paper we are painfully aware of the problems we face in protecting and promoting our interests in the Middle East. I have been most concerned that our overall policy approach be designed to meet the threat, the need and the realities of the situation in the area. I have been insistent that we not back away from advocating a policy that will certainly lay important claims on our resources, merely out of some pessimistic forecast as to the availability of such resources in the years immediately ahead. We do live in, and must plan for, a real world. But if the issues are important to us, as we are convinced they are, we should not avoid facing up to the priorities in allocating resources that they may entail. We have also been struck, in considering this paper, by the need for further, more detailed planning in anticipation of certain contingencies foreseen in it. These include possible changes in the regimes in the UAR and Jordan, as well as the possibility of a resumption of Arab-Israel hostilities and the related possibility of some type of U.S.-USSR military confrontation. The IRG plans to pursue its study of these contingencies in the near future. Finally, I must express our debt to Ambassador Julius Holmes in formulating a policy for the Middle East. The importance of his personal leadership in the policy study done last year is reflected in the fact that his name was, by common understanding, given to that study. We have been stimulated by the clear statement of issues and have benefited greatly from both the analysis and strategy offered in the Holmes Study. I deeply regret that Ambassador Holmes will not be on hand to help us further in regard to the attached paper, which already owes so much to him.
30. Paper Prepared in the Department of State/1/ Washington, July 19, 1968. /1/Source: Department of State, NEA/IRG Files 68-29: Lot 70 D 503, U.S. Policy in the Middle East, Final Draft. Secret. No drafting information appears on the memorandum. The paper was prepared by the Interdepartmental Regional Group for Near East and South Asia in the Bureau of Near Eastern and South Asian Affairs. U.S. POLICY IN THE MIDDLE EAST Introduction American policy in the Middle East in the early 1950's was shaped in the cold war context with the objective of containing the expansion of Soviet power, largely by constructing a barrier of regional military pacts buttressed by military and economic aid. NATO, the Baghdad Pact, and SEATO all overlapped in the Middle East, broadly defined. The Soviet threat was envisioned largely in Korea-style military terms. Our policy in that period also assumed that decolonization would proceed but that outside powers, principally the U.K and the U.S., could continue to play an effective role in shaping developments there, including organization for defense in which the states of the region would cooperate. The Soviet Union was not admitted to the circle of Middle East powers. By the late 1950's we had to recognize that the Soviet Union had leapfrogged the northern-tier barrier, using basically political and economic methods, and had become a Middle East power in fact. At the same time we saw that local forces, of which the strongest was militant Arab nationalism, threatened the ability of the Western powers to control developments. The Western attempt to organize strength in the area against both Soviet influence and radical nationalism led and personified by Nasser came to grief in the crisis of 1958, which brought an end to the pro-Western regime in Iraq and weakened Western influence in Lebanon. We then began to question the usefulness of heavy involvement in local rivalries. Adopting a more relaxed posture at the end of the 1950's, we had the pleasure of seeing the Soviets feuding with Arab nationalist leaders and the latter with each other. We gradually reestablished a tolerable relationship with the radical nationalist governments while keeping our ties with the moderate Arabs and continuing to rely on our security arrangements with the non-Arab states of the northern tier. Even the Arab-Israel dispute was relatively quiet, an unexpected benefit for the U.S. In the early 1960's, while maintaining this line of policy, we turned to the general theme that economic development, whether the recipients were our military allies or not, provided the best means of stabilizing the area and the best defense, south of the northern tier, against the Soviet threat. That threat was now seen largely in terms of subversion and "wars of national liberation." We hoped that by playing a major role, largely in economic aid, we could counteract Soviet influence and keep the Middle East countries friendly toward the United States or at least neutral. The program of heavy food assistance to the U.A.R., at the same time that it was getting military and economic aid from Russia, was a symbol of this policy. The policy faltered, however, when Nasser did not turn inward but revived his attempts to spread his influence throughout the Arab world (notably in Yemen). At the same time he moved closer to the Soviet Union and was increasingly abusive of the United States. U.S.-Egyptian relations came to a low point even before the Arab-Israel war of June 1967, when they were broken. It was the war, too, and not U.S. persuasion or intervention, which shattered Nasser's ambitions and brought an end to his adventure in Yemen. These recent events have caused us to question further our ability to control local forces in the area or to attain our objectives through some broad and consistent policy applied to the area as a whole. Neither containment nor development provides the key. We continue to recognize the critical importance of the Middle East to Western Europe and hence to our global position. We continue to have commitments and important interests there. Development remains our concern, as it is the concern of the peoples of the region. But we recognize the need for a redefinition of policy reflecting the manifold realities as we now see them. The essence of the policy set forth in this paper is that the United States will continue to be active in the Middle East because our interests require it. Our relationship with the USSR in this sensitive area has yet to reach the kind of balance it has achieved in Europe. Local forces, especially in the Arab-Israel zone of conflict, are not wholly within the control of either power. The area is in a period of transition in which local violence and crises will be endemic. It is recognized that some trends in the past few years have been adverse to the U.S. position, and that we should attempt to check and reverse them. Other trends have been adverse to the Soviet position. The paper that follows outlines a policy of competing with the USSR for influence in the Middle East, recognizing that this contest is taking place primarily on the political level and that the governments and peoples of the region will have much to say about their own future. Thus, the main obstacle to Soviet domination will lie in strengthened local forces of independence, provided the overall U.S.-USSR military balance is maintained. For American policy the need is for flexibility: to oppose the Soviets while trying over time to convince them of the need for cooperation in order to avert dangers to both; to hold to necessary commitments and interests while taking account of local aspirations; to avoid over-involvement in local politics and disputes peripheral to our main interests while seeking to control those conflicts which could bring on wider war; and to find a sound policy for the Arab-Israel impasse where we labor under the handicap of our own conflicting interests. It is a policy which calls for political skill and the development of long-term relationships more than for heavy outlays of material resources. We should recognize, however, that certain critical objectives may not be achievable without some provision for expenditure of U.S. resources at relatively high levels either for continuing programs (such as aid to Turkey) or for emergencies. [Here follows the body of the paper.]
31. Memorandum From the Principal Deputy Assistant Secretary of Defense for International Security Affairs (Earle) and the Deputy Director of Plans and Policy for the Joint Chiefs of Staff (Orwat) to the Deputy Secretary of Defense (Nitze) and the Chairman of the Joint Chiefs of Staff (Wheeler)/1/ I-26041/68 Washington, November 22, 1968. /1/Source: Washington National Records Center, RG 330, OSD Files: FRC 73 A 1250, Middle East, 092. Secret. Drafted by Murray (DOD/NESA) on November 20. SUBJECT The Staff Director of SIG has circulated a paper prepared by IRG/NEA (Tab B)./2/ He proposes that this be approved "as policy guidance" by the SIG members without a SIG meeting. The paper would then be sent to Secretary Rusk for his approval, and finally forwarded to the President for his information. /2/Document 30. The paper proposes the following guidelines: (1) the U.S. should meet the threat of expanded Soviet influence primarily by helping to support the forces of independence and modernization in the area, (2) American policy should pay particular attention to our relationship with certain key countries (Turkey, Iran, Israel, and Saudi Arabia), (3) the U.S. should keep to a low level of involvement in local politics, (4) in dealing with the Arab/Israeli conflict, the U.S. should seek a modus vivendi between them which takes into account Israel's need for security and also U.S. interests in the Arab world; the U.S. should avoid identification with the aims or policies of one side alone and should be prepared to bring pressure to bear on either or both parties as a means of moving the dispute towards a settlement, (5) the U.S. should promote a larger role in the area for Western European states, (6) oil is an important interest but it doesn't require special commitments or the use of military power for its protection, (7) military aid should be related to political objectives in each country, (8) the U.S. should support economic development, and (9) the U.S. should giver greater attention to cultural and information programs. It was our understanding that the IRG paper would go forward to the SIG for information, not for action. Frankly, we do not believe that the paper is of adequate quality to publish as policy guidance. It neither analyzes fully those issues and problems raised in the paper, nor does it consider other important policy questions which we will face in the coming year. For example, the paper states that the Soviets appear to be aiming at becoming the dominant external power in the Middle East and the Soviet objectives include the building-up of a system of pro-Soviet states, neutralization of U.S. power, and the reduction of Western influence in the area. To meet this threat the paper proposes that we support local forces of independence and modernization. The paper doesn't make clear who these forces are, how we support them, or what impact this will have on Soviet activities. It poses, however, two unreal alternatives to this strategy: on the one hand, a substantial build-up in U.S. and Western armed forces in the area and large increases in U.S. military aid; or, on the other hand, withdrawal from the area. Another example, the paper proposes we concentrate on certain key countries, but goes on to say that we should also pay particular attention to Egypt and to do what we can everywhere else. It makes, in effect, a strong argument for selectivity, but holds out the opposite prospect. The paper fails to treat certain important policy questions, such as: whether or not we should deal directly with the Soviet Union on certain problems in the Middle East (e.g., the Arab/Israeli conflict); the implications of the continuing arms race, and the increasing sophistication of weapons coming into the area; the impact of the growing instability in Jordan and Lebanon on the Arab/Israeli and conservative-radical Arab conflicts; and the role of military forces in the area generally and the Sixth Fleet in particular. Finally, we do not believe it would be helpful to publish a policy paper in the last weeks of the Administration; even if it would be helpful, we believe this paper is inadequate policy guidance. We recommend that Mr. Nitze sign the letter at Tab A to Mr. Katzenbach/3/ suggesting that the paper be published for background use rather than policy guidance. /3/Nitze's November 26 letter to Katzenbach is attached but not printed. On December 5 Katzenbach responded to Nitze, noting that he had some difficulty with Nitze's proposal that they deal with the paper as simply a background-information document rather than as useful general policy guidance. The Under Secretary pointed out that the paper was the product of a 2-year dialogue in the IRG and the SIG, drawing on the Holmes report and on subsequent work by all of the agencies under IRG/NEA auspices. He noted that no basic disagreements had been raised by OSD or JCS representatives or by other agencies when the paper was approved by the IRG. Katzenbach said he did not agree with withholding approval merely because the IRG paper did not cover every issue in full detail nor prescribe specific courses of action dealing with those issues. He proposed that they approve the document as general policy guidance while explicitly recognizing that certain aspects of the Middle East situation needed further study. (Washington National Records Center, RG 330, OSD Files: FRC 73 A 1250, Middle East, 092) Genl Wheeler concurs in attached letter./4/ /4/This sentence is handwritten. Ralph Earle
32. National Intelligence Estimate/1/ NIE 30-2-68 Washington, December 19, 1968. /1/Source: Central Intelligence Agency, Job 79-R01012A, ODDI Registry of NIE and SNIE Files. Secret; Controlled Dissem. According to a note on the cover sheet, the estimate was submitted by Deputy Director of Central Intelligence Rufus Taylor, and concurred in by the U.S. Intelligence Board on December 19. The Central Intelligence Agency and the intelligence organizations of the Departments of State, Defense, and NSA participated in its preparation. The State, Defense, and NSA representatives concurred; the AEC and FBI representatives abstained because the subject was outside their jurisdiction. A note on the first page of the estimate reads: "A detailed presentation of the postwar posture of the eastern Arab states is contained in the Arab-Israeli Handbook (revised 15 February 1968, with most recent information to be included in a new edition to be published in January 1969)."
THE EASTERN ARAB WORLD IN THE AFTERMATH OF DEFEAT Conclusions A. Of the issues that previously occupied the attention of the eastern Arab states, that of Israel has dominated the scene since the June 1967 war. Nasser and the Arab unity drive that he symbolized have been weakened, and the wealthy conservative states have acquired some leverage over him. This has brought some moderation of traditional inter-Arab rivalries, but antagonisms and suspicions between individual Arab states remain and will manifest themselves again. B. The war has further slowed the already glacial movement toward economic and social modernization in the Arab world, and has increased political instability in Jordan, Egypt, Syria, and Iraq. The many factors which make the Arabs technologically and militarily inferior to the Israelis will continue to be operative for a long time. C. The chances of any genuine movement toward a modus vivendi between the Arabs and Israel are slim indeed, except possibly in response to strong pressure by the US on Israel and by the USSR on the radical Arabs. Meanwhile, the war has given new stature to the fedayeen, and the present pattern of raids by these free-wheeling commando organizations and Israeli reprisals seems likely to perpetuate a situation of chronic violence between the two sides. This could develop--by accident or design--into broader hostilities which could in turn lead to a direct confrontation between the US and the USSR. D. The war and its aftermath have greatly reduced US influence in the Arab world and increased that of the USSR. So long as Arab-Israeli tensions remain high, Soviet influence is likely to remain strong, particularly among the radical Arabs. It will be limited by Arab resist- ance to external dominance and by the likelihood that the USSR will continue to support the existence of the Israeli state. But the ability and will of the radical Arabs to resist Soviet pressures are less than they were two years ago. [Here follows the 8-page Discussion section of the estimate.] [Continue with the next documents] Volume XXI Index | Foreign Relations Online | Historian's Office | Department of State | Secretary of State |