Here’s the latest on US-Saudi relations in response to the President’s query. In a nutshell, Saud has become increasingly surly since his visit because he’s apprehensive over our attentions to the UAR. State attributes his current behavior to childish spitefulness over this one issue. Hart has tried to reassure him that our aid to the UAR implies no less interest in him.
We’ve been quite responsive to the requests Saud made during his visit:
1. The President promised to consider the possibility of economic assistance. A three-man AID survey team headed by Harvard’s A. J. Meyer arrived in Jidda on 13 June, has been cooperatively received, and has reported preliminary findings.
2. The President promised to examine the possibility of providing credit terms for a $16 million arms purchase. State has officially asked AIDand Defense to arrange this. They hope it can be worked out, although it will mean taking funds from some other program.
3. The President promised we would communicate our views on the British role in Southern Arabia. State did so both here and in Jidda in February. Saudis haven’t asked for anything further.
4. The President expressed willingness to continue the US Military Training Mission but pointed out we would have to negotiate new arrangements in view of our formal withdrawal from Dhahran Air Base on 2 April. Negotiations are now going on, and training continues under the old agreement.
5. After considerable vagueness about what King wanted, Saudi ambassador requested three 5 KW short-wave transmitters. Saud originally confirmed this request. Now, however, he says they’re unsuitable; he wants 50 KWs. State feels his change of mind results from pique over our UAR policy, not from any change in technical requirements.
Saud has taken care of one of the two problems the President asked him about:
1. He released from customs the backlog of equipment consigned to our Consulate General in Dhahran and promised to expedite further customs clearances.
2. Hart has not had a chance to take up with him the matter of visas for American Jewish travelers to Saudi Arabia, and Saud has offered nothing. In the current climate, it doesn’t look as if we can hope for much progress for the present.
Comparative figures on aid to Saudi Arabia and the UAR appear on the attached sheet. Chief financial difference between the two is that the UAR for the past year has been fighting a serious balance of payments problem and food storage resulting from the last year’s crop disaster. In contrast, Saudis since 1958 have improved their position to the point where, by late 1963, we expect Saudi government will owe no money internally or externally.
Meyer’s preliminary findings confirm State’s view that the Saudis don’t need substantial development assistance. Saudi government gets about $375–400 million in annual oil revenues—about 80% of its total income. Although they have the makings of a fairly good planning authority under a privately hired American, they probably won’t be able to spend the $85 million set aside for development and normal construction projects this year. Finance Minister told Meyer he didn’t anticipate the need for large-scale financial assistance for two years. However, he agreed with Meyer that the real need is for technical help. Meyer will bring his detailed recommendations to Washington early in July, and AID will determine then what we might do.
We’ve been quite responsive to the requests Saud made during his visit:
1. The President promised to consider the possibility of economic assistance. A three-man AID survey team headed by Harvard’s A. J. Meyer arrived in Jidda on 13 June, has been cooperatively received, and has reported preliminary findings.
2. The President promised to examine the possibility of providing credit terms for a $16 million arms purchase. State has officially asked AIDand Defense to arrange this. They hope it can be worked out, although it will mean taking funds from some other program.
3. The President promised we would communicate our views on the British role in Southern Arabia. State did so both here and in Jidda in February. Saudis haven’t asked for anything further.
4. The President expressed willingness to continue the US Military Training Mission but pointed out we would have to negotiate new arrangements in view of our formal withdrawal from Dhahran Air Base on 2 April. Negotiations are now going on, and training continues under the old agreement.
5. After considerable vagueness about what King wanted, Saudi ambassador requested three 5 KW short-wave transmitters. Saud originally confirmed this request. Now, however, he says they’re unsuitable; he wants 50 KWs. State feels his change of mind results from pique over our UAR policy, not from any change in technical requirements.
Saud has taken care of one of the two problems the President asked him about:
1. He released from customs the backlog of equipment consigned to our Consulate General in Dhahran and promised to expedite further customs clearances.
2. Hart has not had a chance to take up with him the matter of visas for American Jewish travelers to Saudi Arabia, and Saud has offered nothing. In the current climate, it doesn’t look as if we can hope for much progress for the present.
Comparative figures on aid to Saudi Arabia and the UAR appear on the attached sheet. Chief financial difference between the two is that the UAR for the past year has been fighting a serious balance of payments problem and food storage resulting from the last year’s crop disaster. In contrast, Saudis since 1958 have improved their position to the point where, by late 1963, we expect Saudi government will owe no money internally or externally.
Meyer’s preliminary findings confirm State’s view that the Saudis don’t need substantial development assistance. Saudi government gets about $375–400 million in annual oil revenues—about 80% of its total income. Although they have the makings of a fairly good planning authority under a privately hired American, they probably won’t be able to spend the $85 million set aside for development and normal construction projects this year. Finance Minister told Meyer he didn’t anticipate the need for large-scale financial assistance for two years. However, he agreed with Meyer that the real need is for technical help. Meyer will bring his detailed recommendations to Washington early in July, and AID will determine then what we might do.