wrxm for
6
8 PS
INill
Xl&SBf ART) TBE KTJXU EAST(AdVQOM Cc-gr)
SUslttta by tht DIBBCTOH CP fFffiflTi OnSLUCBUCS
Tto foUovlCGorcpclsctlooa participate In to* prnonUor. of thle mwui irol IirMlllcne* Acaocy on! tbe lntaUinaooa orcnnlaotlco* ofarowiof Slots, tto Aray,to-ry, tto Airaod fto Jolrt Moff.
Ototwrid in by tto
DBBXADCV ADttOORT CXMCTtB
ondootbtI&sttoAcrirtant, bUXllOMM, tkn*rto-*rt of etoVij tto AMlatoTjt Chlaf ot Blast, mmltmmmtmt Depoftaatri cf ttoto Director of frrral -jJtaUlcaxawj tto Miwatorna tto Deputy Director fur Tntoiii,fto Jclot Staff. Tto Alomeoxmaalonto tto VC. and tto Aaalctcnt Mractor, Marol Doner* of Ifr-mi-xttoa, atoViloed, thetolxc outalia of ttolr Jurladletloo.
CENTRAL ILII0IKE ACEfcvM
6
SUDJECTi : BASSE* AID THE HTDDIX EAST SmiATICII
tw nuxirn
* th* tDpUcatloa* of Ecyptiaa arllaallulla of th* Sum CodbI Cccbjidby *odopo*nta in tat rwultaat situation.
A. Bycf th* Bon Cooel Cocfaro-,ho* for th* tin* btiixj araotly ttztKCthttta Ui petition,am laootr of Ejpt, but alto tt tht tpcntrtrun oodl afthrewchaat tb* Mddl* bit. Bo bo* von vlldtb* Bcrptlan population,port free tb* citattr part ofvcrU, and approval froo tb* UBBR. This bosa hitedo haw luTfamd atb*fural of th* U5 and lit, oadthe USSR a* well, to flxooce th*project.
It la not lEBToaslblc fcr tbt Ecyptlcna to run the coral vith reeiorxbla cccjpetenee, oltbouch Hasser voold olnoat oertolcly ccee to use crotrol of the canal to odvonce hie own policies, Tba prtoory aljilrlcanoe of Ik mot's nove llee lapolitical nodaspect* rather than In tbe threat lt poeca to cooal operatlona. Ikaaer'a actionencthened oirti-Ueetero, entl-ccaonlol, ana rsrtlccnllst trendstbe aree, ond If successful, vJU esucurosa future nmi toward norly rsstlrnolliatlonether octlec ocolcetanied oil pipe Hue* ocd petroleuc facilities.
' C. 3te couraee of octloc open to tha Wast lo thisrone* free ocouleecenee vith ae coed grace oa possible,acourae tor*fle.Ttatlocs, local action ic lnternotl jmI or other tribunalo, appeal* to the Halted stations, ond eccooulc sanctions, to nllltory opera ticcaIgfpt. fbe UK baa olreodjr odoptad drasticfivemlng tbe blocked *ajyptlaa *terllnc balance*dlUoDnd oil other Egyptian ficonclol assets in tht atarllnc ano. ttatsc actions nay seriously curtail Igvptlan trade with the Heat, sloe* naarly ell of lt la eceductad InFrauca has fullytbe UK.
D. Tbe courses of action open to boater Ir. countering Western
abort of ntlltory oetloo Include eelsure of Critiah and
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other Western assetspt, horoesuent ntIn the cenol
by.jULTye.aid_ blwlranooj^ull closure itf. the canal to
Major Interference vlth oancl shlppliv; vould not ccly reduce the canal revenu* occrulnc to Etypt but would prabotly oleo orouee too active disfavoriae rssut of cations, lrelufl-ir- acna ofotleulonlaUat faallne- Xt vould alao pro-dda Justification for pcsiible forcaful Waetarn action to lwp tha coral open. Accordingly, Jboaar la llaely to ovoid suchoxcapt oa on axtraoa noeaure In retaliation for Weetern octlooa.
the OK ond France on the one hand, aod baser onhove olreody taken position- fron vhlch tbey on unlikely
to retract le the oeor future. The proepect larolonaad period of crista, owlr*; which existing artlncallet and ontl-Ueetern aartlrjant ln tha Arab atatae, acd probably oncec nautrellat orticolotlnl peoplas, trill probably be irrtenalfied.
recant de^lopcasta era onrtedly to tbeopening aa theyiderbetween Kjypt andbetween the Arob world end the Ueet, ond poeslblywtloaa tbraeelro oa they try to acre* oo eoocerted
- Ill
ect^tarrj-ataret. The USSR vlll probally participate In ciiy
i..tbt coocl crlslt, and thereby wixpacd Its irflueno* lc tht Klddl* lost. Tn* UBSR vlll probablyoth political aidlc bit retlttaro* to Uettsrr. prttturst. ould welcoj* tucb -uppart. Althourti at tha prate* tint hit lots-sett appear t: rc parallel to toots of thtil believe tfaot Jbetertntsxds to oToid to-let doDlxatloo and to refreirire andcon*nt withelds lx tht Baat-ssst etruad*.
In the treat of wssterc dUtory tctlcc onBlntt Ineesr,tlitv* that the UBEB would cake trtry sffort to ovoid dlroet Involvsceet, but abort of that would intsxalfy itso [jive eld to faster, lceledlncj poeelblt covert introduction of laMltary advlaert and ipeclolltte, and would alto capitalite oo tola situation la the Da* and la the Arob and neutralist eouatrlas.
larstl nu wlav with MtlafaeUoa tha widened rift betraa it, prinolpal Arab BBtofconltt and to* rmjarsrt. It will probably appeal far nrtatly lrcressed tttpuast* -af am: eueb thipuenta would oloest certainly lead to violentestern reactions tlu^utfout the Arab world. U* dc tot believe, bowtver, thatiU attack ftypt, at ladtt durlcc tht early phaset of
thle crisis. aoaeer vlU probably foel it raceesory to ovoid ccc-filet with Israel while be is enostjou lr. all contest vith powers, bm, lr Itieer soarttia c7 the vlcttr In thu preeest erlala, be is likely to take an lccreoalcclj stiff attitude toward Israel.
I. It is poseibU that aaonfareoce of tha sudatories to0 cceweotlcc and otbar interested partia* dtfrttrail* raccrsJelns naticeaUlseUco of tba easel coupons' but prctaatisa tha rtotrta of InternotlDnol transit, which would be aeaaptabia to tba Vast, tba USSR, and otbar interested user coojtrie*. fskara weald ba may obataclaa to ooblavlnc BCTPtlen adherecce to an? pew accord Isrvolvia, tntomcticcal eeotrcO, partleularly la tba slant of aaaaar's position that ba would iwfea* to accept any oaaaarw of such control. However, lt would be difficult for baa toolukico If the Weatexn Poware, tba USSR, and Colooto Itaaare, and tba cajorpowarerala* It apes hill, parti oalarly if it fall within tba rimawtaa af tbe lttfl convention.
DISCUSS'ON
I, TUX NATIONM OT THE SOE2 CANAL
1. ij lealiu'i twttooeliaatioa of Um Shi Canaltor tto rnooMBl atighly effective mowbarnsslf from wtot appearedMtmtlittJngaa otherwise extremely ttccetafol foreif* policy. . ih* Serial Bloc inaeatr at oaehimselfosittonpreittge thro^aoW
tha Arab world aa wall aa at keens. Tblt.srlet of ottorlienated tto DS aad UK from Egypt tHtfcoM. rise, ccemectlaats; aad ctoy eigaifled thai Master bad accepted tbe eepport of tbe USSR withoutJ* to Soviet doaaina-HOB. SabMOaaatfy It appeared to many la tha world, aod It mewl bars appeared to ftasssr ieir-iilf. "tot fto USSR aad fto Waatorasretoet each otto- for bit frleadihlp. Aa tto token of fata competitive bidding, Natter eseared aa, offer from tto US aad UK to finance fto Aawaa High Dam project, aad to alitoror at least gavs tto itnpreeeioa that he bad obtained, a
corresponding offer from the USSR. Tho* hetb* advaasagaa lo be gained for U* owe primarily Arab In la reals from playing both sides in tbe Caet-Wsst conflict, and ba caeeadallla* of tba Wast to arceader If rhey bad chaise tba maal profitable
a things developed, however,r*afad th.power* grew vatll tba US. followed by tbe UK. withdrew it* offer of aid for ah* High Dam. At aba aame One lt appeared Cast tbe USSR elad never cleerly aaada aa acceptable off*r. or if It bad done ao bad also withdrawn U. Tba project bad been ao pahliclaed by Nasser abroad aa toyxnbol of hi* prestige sa Cbe area; ita abend oatmeal would bav*. Mow to Ma poaltian. To this situationpeecb vigoroaaly attacking tb* US aad aapaciaUy tba UK aa *a> pooer.ee of Imperialism, aad be announced tb* aaUonallsiog of tba Sua* Canal, pr cent* lag that tb* revenue* from thatwould bato Ooaaca tba High Dam, aad would ba aufflcUat for that purpoaa. Neaaar'* anrisot waa greeted with enthusiasm lo Egypt aad throughout tb* Arab world. At laaat for tba Urn* being
it hu .tr-ngtheoed U- potittoo oot only aa leader of Egypt, bat nleone Um epctuftman**HneuHHm trinnflt.
out the Middle "Ml.
3. We believe that tha aotlonnlliatloo daclaloo was taken oo abort notice. Although tbe Egyptian government had loo* been planning tor eventual aaewmptioe, of control over (he canal whan tbe compeny'axpired Inaster Wad dntao priorao of dealre tor Um cased ahead of time, and in fact had**atad that be di- net wtab to do to.
Atttr the OS-OK ann-uocmeou,ptUne tboerad every tlgn of expecting that tbe USSR which had certainly dltplayed
laterett la financing me dam, wovid come to tbe rettoe when the
roeelbUity of Weel ate nee disappeared.
e view of fa* eaeeJtntmtrivate orgaai-aation incorporated witbla Egypt tadwithin Egyptian territory aad Naattr't proposal to rtcompenae abadart oo Kb*la of Par la Douree qoorvUone juit prior to bit aanouactmant. It moei have appeared to the Egyptian go^eromeot that leltuii would be
- 3
difficult to upset oo. legal grounds. Moreover. if Egypt should fuUUllts lBternfTlooal obligation* in operating tbe canal, there would be Utile baeia tot legal action by the using power*.moat of tbe liquid aaasts of tba canal company are now outside Egyptian control, Naasar has already threatened to bold up compensation of *harehold*ra unlass this* asset* ars mads available to him. He baa additional leverage by virtue of tba fact that tba British, who are principal shareholders, are also the principal users of tba canal and thustrong Interest la keeping it la operation. Now that British troope are dotattooed la me canal eooe tba last contingent* leftaw weak* ago tbe British cannot undertake military action tocontrol of thex apt throvgh outright invasion of Egyptian soil.
5. Meanwhile, nationalisation could bring Nasser important advantage*. Net annual revenues will probably remain farthe HOO million cited by Nasser in hi*uly speech, even if he take* advantage of th* leeway for an Increase In toll* provided by tbe present operating agreements. Nevertheless, tut revenue*illion would easeinancial
c
cd torn work oo the Aswan Dun anight be Birder-taken. Win Importantly the peychologlcel Initiative temporarily lost by Naessr at ibaof tho US-UK anuouncamente oo. tho Aswan Dana baa (or tba moment been triumphantlyo red. both ta Egypt aad ta tbaArab eta lea. Tba fact mat ba baable to strike back oava, without acceptance of Bloc assistance, farther eabanaeo Ma appeal.
ft. HattoaaUaatlon of tba canal baa broeapat an angry reaction from the UK aad rranee, both of whom bare formally proceaaed ma move; the re have also been expressions of concern from Other Western nations. Tha UK baa already retaliatedopping
arms eMptmats to Egypt, and by freealng allrivate and public aeeet* aad or ita ccaaorolrt! eg about UO million pou-.ls in sterlingrance ta cooperating in the canal company'" refuaal to release ita rranch-held liquid areata to Egypt,
ritish aad French ocyoeition arise* la pan iron, their statu* aa owners of tba canal tcenpany (tha British government
owns aboutercent of the stock and rraach private Invsstors remainder)
practically all the / aad aa major naera oftaaU or of products tr ens ported mroagb it. Tha BBOSt Important of these le oil. which inaccounted for bYb at tba tonnage through tee canal: more thenercent af Middle East oil shipments, which now furnish ebouiercent of Western Europaaa requirement* and ar* major ravanoa prodocara for the UK in particular, aow go by canal rather than by pipe Una. In particular, oil from Kuwait aad Qatar, which is least likely to ba effected by oil naUonallaatiooa wholly depeadect on tankers for lifting.
Swan if tha Eg) prise* werehe etoch-hoiders and operate taa caaal la good faith, their selsare of the caaal wouldumber of dangers forand thoee dependent on products transported through the caaal. It lawhether Egypt will be able to run tbe canal etOcleaUy
or whether en Egyptian admlnlatrition will expend the amount on canal improvamente wb&athe increasingly beevy traffic-burden le making Deceaeery. Egypt could ralae to lie to eoma-tmng like twice their preteat level without violating preeent egreemente binding the company. Direct edmlniiit ration of the canal, moreover, will facilitate Egyptian nee of itolitical weapon. Egypt'* control of tha canal approacbet ha* already enabled it to do thli, a* ita prohibition of Israeli ehipa aad lte rettrictloa of ehipmentt to La reel have dernoaatrated. With actual control of the ednalnlatrative machinery Egypt will beotltioo to impott delay* and haratamenta again.itnfriendly orort difficult to preeent for action by the UN or the World Court. *
9. The political and ptychoioglcai irnpact of Egypt'a znov* weighi iar more heavily in Britlah and French thinking than con-earn for the company'*r even the riaka ol interference with traffic. Th* lind French Me national! nation of th*
Sues Canal aa bat another, aad probably the graecat.ong eeriee of attache oo Weetera interest* to the areahe aaoet DOtable being Iran's nationalisation of the oil lad a* try aad Egypt'* anOateral -abrogation" of6 treaty with the UK. They are alrooat certainly convinced that if Naeaer'e anoee goea one becked it will be followed by similar action* throughout me Middle Caat. and tba poeitlon of Wee tern Oilhich Che Britiak to particular conaldsr vital to their oars survival, will ba gravely Jeopardlaed. Mora over, fbey racogaiae thatnatUoallaatlnn of tba caaal wiU greatly tocraese Naaaar'a LaflaeBca to the ether Arab atasaaha* likely to leadurther *roeiouarn preacig* and an lacreaaedn tha part of teas* state* to follow Egypt'* irmii ln re la Hone with tha Bloc aad th* w* at. Itrimarily toreason- thatl bah aadr* likely to demand tba etroogeoto prevent Naeeer from "getting awey with
to."
10. Rfudou from other nation, thua Jar hart been laea Inteaae. Th* natl email aarluo .noauKcm-nl tU|IM rally ballad throughout tha Arab world, ladading Iraq. In Asia, tba acceptance of Egypt'a right to natloaaliaa hat bean mingled with eomeof concern ewer tbe ebruetaeea of tbe move and Ihe poeeibtlity of adveree effecte on trade link, with the We at; Ceylon'e prime miai.ter bae eoggeattd tbe poeaibilityeet-iag ol tbe Colomboo diacwae tbe matter. Early Dloc reaction* have been favorable.
O. POSSIBLE ECTPT1AN COURSES Of ACTION
Tbe immediate outlook ia for an extremely critical period la which Egyptian anovee will depend In great pan en what ecttooe are taken by interacted onteldeincluding tbe UK. Prance, and tbe US. ac wall aa the USSR aad even Israel. Nasser la. howevei sot likely to make any major concessions because of Weatern diplomatic pertuaoloa or Weatern efforts to cecurc legal
.
v'/V
redreae through international lew. Indeed, lo defy anch limited Weatern effort* would probably al leatt temporarily errengtben fata position, since hla koom could ha made to appeartrufl.pl- againat Wee tarn imperiajiat conspiracy. By lba aatna token, he ie not Ukeiy to ma he major cooceaaions becanea of Waetern economic ease dose againstoycott of the canal, or the impounding of the Egyptian eterliag aatete in the OK, even though each move* would create critical probieme for Egypt which la already abort of foreign exchange and confronted with dlfflcultleailing lie cotton. He probably believee he could count on aaaietance from the Bloc and the Saudi, inltes-
It. If the OK and other Wee tarn Powere abould attempt totheir oewvianrta by cccapettcei or bloc hade, heater would probably attempt inch military realttaoCe aa be could, meanwhile appealing to the ON. Although be hlroaelf would realise the boptleeaDeet of military action by Egypt alone, be would feel
.10
compelled to meke tbe gsvrnre, hoping forfrom tbe Dloc, eed counting OB-fbe revulsion of Arab aad neutralist, optoloa agalaal the Weet to bring him farmer aid.
UA. II le poeilble mat an lateraaclooal ccaiferenee of the elgaatorlee to8 convention aad otbarad parties mightormula recognising aatJooaitaartoa of tbe caaal company but protecting the right* of lateraatioaal transit, which would ba acceptable tot, the USSR, aad otbar Interested Uaer countries. Tho re would be nieuyOhis ring Egyptian adherence to any new accord involving Intsruattooa! control, particularly in the light of Ma* ear's poaltton that he would refuee to eccept any measure of *ach control. Howe ear. it would be difficult for Mm tocJaSton if tba Weataraba USSR, me Colomboad th* majorpower* agreed la urging It upon Mm, particularly if ll fall within the framework of8 convention.
10a
Egyptian Operation of ihe Canal
initially reacted to the UK'e freezingaaaata by threatening to cloee tbe canalib eh
hipping. At preaeat, be la ernpbaalaing Egypt's intention to
operate tbe canal efficiently and to maintain it in good coodl-probably
Hon. However, be would Aake nwaaorea to prevent the peaaage of ehipe involved if be were confrontede rata tent refoeaJ on the part of major wee re of tbe canal to pay tolla to Egypt.
tbe Weat dec idea to accept Egypdao control ofornly Ineffective protettt. Naaaer leto abide for tome time by currentndrvtpect to level of charge a, freedom of transit, andHaving taken tbe big gamble in eelaing control, beprefer to avoid baraaaing meaauret againatlatere ate. at leaat In tbe near future, leal eucb act! one
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should th, final provocation celling forth violent coanttriMuurM by Moreover, ba urlU ba anriooj to demcaatrat*itfmacy of hi. action ao other oatioaa. particularlyiraini atataa of south aad southeast Aaia.
timee felt bis ccavtrol of ma caaal to
be secure, tht temptation to eaploit bit poaitioa to gala lacreaaed revenue would probably become irresistible. Cveutaally.Naaaar rnigM corns to mat control of me aaaalora partampaign agalaat Brttlah interests to me Uidcle Seat.
Actions eHth rsspect to Other Western Interests Within Egypt
Che outcome of tba Sues controversy itself,
(be tanaiooa engendered by that affair can only increeee Nas se r's alreadyhoe till ly aoerard Weatern inflaeaae to Bat Middle la almost aay evwat. hi* campaign agalnet Weaternrests la the area will ba continued. Tb* tctloa* alrttdy tnaao by the British tad Frenchs that anstruggUirtually certain to occur.
-
17. Maaaer may move to take over private Weetern ln-tereata in Egypt. Such action would h. particularly likely
a form of reprieal in tha eventuction* by tha Weetnro Power* raanltadorm ofwarfare betestD tba
Uttar and Eaypt.
Otbar Envptlen Action*
10. Naaaav baa for eome tuna baan clearly cororaittad to tha broad goal of undermining Weatern Influence in tha Middle Eaat and Africa. Tba Kaaaer regime'a active propaganda against tbe Weet, both arirhin Egypt and in otherf tba Arab world and Africa, to virtaally aertnin to coettone. Tbe Sme; ieewe may let rests Ha appeal nmoag anxt-Wettera andi ilimiolt. itfitrltlly if Weatern reaction to fto canal atiatsre laablat Ifnater to appear eitherartyr to im-periallam or aa ante who haa tacceeefeUy defied the Weet.
ne important target of fto Egyptian antl-WeaternwiU continue to be Western oil interests la tbaale a, Naaaer would probably like loatlonalieatloa of the oil
- IS -
industry taroughogt tha Arab world, and in tba longer run may
aapected to encourageeeulopoaeai. -ln-tbe short
ran,ora promising opportunity for undermining th* Waatarn oil position would ba toiOO by oil trenail states aimed at weakening oreetara control over tbe oil pipeline* from Iraq ami Saudi Arabia to the Mediterranean. Suck action might be particularly appeal, lag to Naeeer aloe* the uaisnlad situation in the flue, canal increaess tb* importancsfIk* to bring about such action. It* chief hope would ba la Syria, where Egyptian infl-aeac* li attxaagtfii^ important factiooa Id thefi and tnutabla governmenl. Egypt also aeaka toba Waaatra ell coenpaaia* ta tba Uiddl* Eaatoting labor unreal aadedi oca among employee* of the com-paniaa.
20. Other Egyptian actioneatern inter*.t* la tat Arab etstae will continue to Include political rwpport lor aau-Wratr.national! BU in Syria aad Jordan, encourage-ment of Saudi Arabia la ite alraady proaibichre demands oa tba US aa tba prica of renewal of tbe Dbabraa Airfield. Naaeer will continue hi. effort* to diminish US end UK infloaace la labra bad bis campaignranee la North Africa. Neeill aleo iacreaee efforts to easaad Egyptian influence la the Sudan. Thereothing new in tbit patternrptian action, which haa beta going on eince Naeaer emerged aa tbefor natioaaiiem la the ana, Tha chief danger la Sat pretest eimedoa. however, le that costing aaalccallst and and-westers eaatiment intattt may be Interny tympathy for tba Egvptlau lasdar in hla etruggle over She canal isach an event, WaaasrV tnflnewta ewer other Arabmay increase .
- IS -
toward liml. Nasaer's to.oUir,wtll not ba lessened by hie current coaOlct withPowers, aad tba Egyptian ragima will eon tin oatba laraail laaaa aa aaif= Uvc means ot* gainingaad support la tba Arab world. At laaal in tbaover tba caaal, Nat tar will probably aa analooa to(rotable wttb Israel, aad la not Ukaly to go out ofto provide tha ureelia with aa aaeuae for militaryEgypt. However, ifmerges aa tba victor
in tbe prseeot critit ba la Ukaly to take aa lacreaeingly sdli attitude toward laraal.
HI. THE ROLE OF THE
Soviet role la recantaid* nee that tba USSR did in fact offerthe forelga eechange requirements of tha Highsome months ago and matossibly with Soviet
- ]6
action on
Egypt tookhe offer in the .pxpectadon of getting the money from the Win Since the unexpected withdrawal of theK aid offer, the record ha- been ambiguous, withby Soviet officials In EgyptftlaT tbf ^offrr atUl etood being matched by atatemente of Foreign liinlater SOMpilov andhat tba USSR waa willing to support other
development projects, leaving tba implication that it wet not
.
prepared to/finance tba darn,
21. It is poa Bible that Neater'e declaloa to aatioaaiiae the Sues Canal waa taken in coUueloa with the USSR. We eon-aider thla unlikely, though wa believe that Nasaer made Ma decle.'oo with confidence that he would receive Soviet approval aad eupport.
he USSR wiU probably help Nasaer in his political'
/with tba Watt, by each methodi as diplomatic eupport in tba UN aad elsewhere aad economic esilstance to alleviate tha effects of Weatern economic sanctioaa. It will aluoat certainly continue to provide military aid, and help for industrial projects end other enterprises of economic development, probablytome assistance toward launching the High Dam project if Naaeer recjuaata lt.
25. In ta*of WuUn military actionuUar. thai th* rjMJt would man* anr, afxoan to aa^ad direct Involvement, bet abort of that would intensify Ita effort* to ,iv* aid to Naaaar. tncludln; poeaihl* covert Intro-auction of military advleer* aadad would alao capitallaa on thla aituatlau la tba UN aad laArab aad neutralist countries.
CSSK hu recentlye efforte torelative, with Israel aod certain FngbdaJ Pact member*.
Although It will almott certainly take advantage of opportuni-
between Egypt and th* Welt tie* for widening theittle cost to Itself, it probably
coo*Ida re that rapid consolidation of an sapecially close and exclusive relationship with Egypt is not only uuneceaaary but actually undesirable at this time in view of tba probableeffecte on it* freedom of maneuver. It will probably continue to avoid full endorsement of the Arab position onine.
In hostilities, will probably continue
himself; uniceso place important
limitation* on the political commitment* ha would willingly give to the Bloc. He probably believe* that ha can porauean 'Wnpe.rd.r4 foreignnd that th* pre sent necessity of accepting heavy economic commitment* to ths Blocemporary proposition which can be brought back into roper foe a*ater data if be take* reasonable precautions. In so doing. Naeeer probably overestimate* waVantlity to retain
f
genuine Ireedora of action. Should tbe airnatioo io worsen
materially toie already great economic depen-
dence on ihe Bloc ha might find himself trapped. However,"
we believe that at leaet for aorae Um* to come Egypt and the
Bloc will be linked by a ' tboagh by no mean* compieta community of intern at with respect to Middleatlona ratbet than by nay more bindingnd that both aide* will continue to have Important reaervaUoa* about their mutual relatiooeMp.
27a. The canal crisis has clserty opened to fas
opportunity of fartherlta influence In th* Middle negotiated
Esst,aolutioo of the cIlaikely to involve th* approval and perhaps tba pertlclpetioo of th* USSR.
IV. REACTIONS IN PRO-EGYPTIAN AND UNCOMMITTED ARAB STATES "
21. Tha Initial public reaction to Neseer'e action In tha pro-Egyptian and uncommitted Arab eta tee baa been Ughly favorable. Hie dramatic act of de fleece baa raisedending la the Arab world to aaw ksigble. At leaet In the abort ran, the action wiil bars an intcertcttitt effect on Arab antiaasdlst eentimeat eimfler to that engendered by ths original Egyptian arms deal with tbe Soviet Bloc. In additioo, certain Arab eta tee may be aac cur aged, both by eaartwde and pare nee ion, to tabs similar
-cttooe in proportion aa Jtaaeer'e aahwkwlbawerofitable aaoee. Watte Alt* gee-rally approve Neater'a action. Che deajree c- concrete eepport they -ill be prepared toefner Egypt will probably depend on the etrength of Western end general world reacflao. More-oewr. the tuttmete eftect in both Cke wnc aiwwlrterl teal la ana pro-Ewjutiar. Areb eentae wUlnaha carry throwgh the ectloe eatceeafally Weetern peaaltlee.
Saodl Arabia, rtaaeer'e dacdaioe coaaeearly onforeaeata Caaaa ao far aa Weataiaecta at*
i high price for renewal of th* agreement covering nee of the DS milx Dbehren, end Lo (he wake of Neeeer'e defiance of tb* Weatern Poerera, it le unlikely that Sand wiU coin* down enough tc meet pre lent DS terms. Failure to reach agreement concerning the air beee would cause Send aeriously to coevaidcr obtaining Eloc arms, although ha would prefer to obtain arms frotn (ha US or some other non-Soviet aource. Meanwhile. Saudi Arabia (and Temea) will ba encouraged by Naaeer'a action to preee urritoriel claim* agalnet the Dritlah end the DritUb-eupported aheUndom* evan mora strongly.
30. At the eame time, tbe Sewit* wiU remain aandou* to avoidetariorettoo la their relatione with the US aa would endanger their vital oil revenue* from the Arabian American OU Cceaaaaay (AfiAhiCO). While eh* Egyptian actloa in taking over tbe Canal Company willowerful fillip to Arab incline-tion* to nationalise foreign ownedbe Saudi* are aware from the Iranian experience of tb* great diffJcultte* of attempt-log to operate ao oil Industry in the fee* of concerted Western
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comrwrclil oppoe Irian. National! rati on of nt TAPLXNE faclli-CUa (and reieiag rates) may ba considered, bat would probably doc ba undertakes If ARAM CO threatened to retaliate by cutting production. Wbila an attampt to nattooaMaa tba oil laduatryhole In tba nant eeveral years appaara unlikely, tba Egyptian action might encourage tba Saudis to raiae tbalr royalty demands againet tba company. Evan bar* they will probably proceed ceatloualy. however, and may cowneel rnoderetlon ebould the Egyptian, threaten to raise canal tolls to each an ea> tent ea to Interfere with tba flow of oil.
M. Syrta, Jordan,banon. ally Syria willNeeaer'a action. Under Naaaer'a inflaenca, Syria might be encouraged to undertake natiooahaattoo cat ths oilrsverelng tba cowatry or, at least, seek go obtain largtr rave-noea from the operating companies. Syria's actions will be detarmlnsd la conalderable massnrs by the ortsatatioo of Its government. Conservative sUmeots appear In recent weeks to have regained some Strength, especially within the army.
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However, Naeeer'e coup Is more likely to strengthenrnovea. Ob balance, walcae tbe Egyptian* receiveeat-beck at Weaterabe chance* at eventual action*eatern pipelinee and other tatereate appear to be better than eve a.
tt. The preaent weak Jordanian government it probably nmvUlirg to leopard!ae lba Drltlah support and aubeidy. but will temporixe for fearof tbe public reactton to any pro-Weatern aland. It will be ewbject to strong Internal preeaarea to glee Egypt maximum diplomatic and propaganda support. Jordan will nevertheless probably coatiowa aeeklng to evoed EgyptianShould the Egyptian* decide to oust tbe US economic aid miaaion. they might wall urge other Arabaving each program* toimlUrna. Ha* ear'* glwatnal chance of success -would be la Jordan, where US aid haa already bean eutfert to eevere nadoaaUet attack*.
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35. aa-aa gueswUl probably adoptaoo-eomrmttel attitud* until ttttnlni lb*f* defyingt. WhU* praa.odytodl*put* with tb*ocnpnnyIt** of tb*abanon would prater to euoid dra.tic action*t*ra latarastn bacaae* of It* owncrading aad flaaocUla tbal^baaoa will..acraaaiagly dlfBcuHalngt along ia bay gaaaral wau* oft* roaad actfvitU* whlcblowction.
34. Ryacdoaa toRetaliatoryba rcactioa ba tba prr>-Egyptian aad taaccesandtted Arab atataa toagaiuat Manser by tba Weatera Power* would probably ba aaarp. f .conocniewould probably aroue* ajifrtiy lor Egypt *ad gira fanbar iaupataa to daraaoda for aaM-Waetant lutaliatory aaaaaara*. Tba liae-libood of aucb affect* would b* iacraaaad La tba avant of lata motionilitary forces or a
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increase la Weatern anna ehipmenta to la reel sad widespread attack, oq wo .tarn ilva. and property might take place, Should Neaeer ba forced to rnaka compromises in order toettlement Chars would at bastrumbling acceptance by pro-Egyptian elementa. Persona aad groups friendly to tba West would, however, be encouraged to assert themselves more openly. The Weetera position would accordingly be atrengtheoed, bat farther actions to bolster the position of friendly nations would probably be required If tha gains wars not to be lost.
V. REACTION OF TPRKET. IRAQ, AND THE PERSIAN COLT PRINCIPALITIES
35. The reaction In Turkey to Nasser's action has been no-favorable. Relations between the two coontries have not been good in recant years and was present Tnrklsh government sroald in all probability favor strong Western retaliatory meesares against tba Nasser regime. While tber appears to ba little tba Tasks can do th influence tho situation directly, they would give moral support to Western cosertarmaasnres. On the other band. Weetern
(
uilm toweald tend further to wttktD Turk! ah faith Lb th* UKlready*omewhetloud UcvM of th* Crpru* leeuea firma tba Baghdad Pact.
So. Th*la Iraq la mora complicated. Tha Iraqind publicavorably toctloa bat tbae* ao Car acted with greater reserve, la addlBoo. aoma popular preaaere* may be gaaaiuaad torn aetLoceliastlon of tba PrttUh-dondaatad Iraq Patrol*um Compear. Tbe oppoeittoo La virtually impotent to fore* that*rB rulingand, however, aad in any caa* tbe preaaure* la (hi* dir*cttoa are cot likely to bagreater tbaa whan Irea aetloaallaed ita oil mduetry. aad hence ebould be contalneUe. la tba event Naeeerfuiir eatabliaha* bis control of th* canal, however, the andpressure on tbe ruling group La Iraq will be greedy lncreaaad.
37. Meanwhile, tbaerncnent will try to turn the Weat'a atdtod* toward Naeeer to their own advantage by privately urging Lncreaaad Wee tern preeaure on Egypt aad more sympathetic
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cooeideraboo of trued inu needs. Tbe gowrniMa! would regard strong Wuwrn ntuuni Bgalnet Hunt asalga thatmbe rahip la lb* Baghdad pact wasestern inaction would further dlailluatoo them. oa Ida ring tha difficulties which they would face lohysical J
take-over la Syria, tba Iraqis would probably not aaak to carry
I
outng-time ambition unlaaa th* Syrians thrsatsnadabs action with rsapsct to lbs IPChich would >eo. psrdisn Irani oil revenues. The pesriusa- napirsd Iracd move against Syria designed both to divert etteatloa tress Master end to fulfill Iraqi embldous showed not be entirely .winded.
M. There wfll probably be Metis Ininillatc reaction to tba snovas iarrnlring Egypt in lb. oil producing cbslbbdotas ofnai.ralo. bad the emaller Persian Osif anddee which are wader British protection. Nationalist element* will cyinpatblac with Nee ear. bag antl-Drttlsh acdonsaaccpt possibly on Bahrainwill aot immediately develop.
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VI. REACTIONS OF OTHER ASIAN STATES
- kfru nuflou to the NMMr gov. ramict'i mmi lad toUra camlirnxu.rji will be mined. Aa aof the Baghdad Pact aad oa tha baa la oa* Ha owa eaperienee with oil natWallaaWna, tba Iranianla apt to be skeptical of Naeaer'a enove. ta win tuJCaeraaofc ba coacaraed over tba poaatblo effect oat oil abipcBeatetbe caaal. Nabooallat el.menta which have loc*be DritUh will sympnthle* with Egypt.
40. ladU, Pakistan, aad Cayioa will probably all feel aoeae concern over the future statue of the canal and the poaalbla effect oa their economies of higher toll, vfeaeh tba Haaasr regime might eee* tolavy. Ai tha aaaaa time,hree Ciiiciicicialth members eiU tend to obare the fail lag whatight lo take each acjttoa laa-aataat,uch torn* of them may diaapprove bU ah rapthe preta and vocal public ln theae ccaantrloc have alreadyd sympathy for Egypt'* position. Such Soutbaaet Aalan couotrtsc aa Durma and ladoaecla
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i- mi be ospeeqod lo give Egypt moral eupportember ofgrouping. Tbelr Involvement will, however, be On the other bend, Jepee, -hlcb rellea heavily ontrade, is concerned over eve effect on Ita commerce ofiacreaee la canal tolls or eny slowdown or doeing ofaad might aupport Wee tare aftbrta to correct
VH. gfiAeUJ REACTION TO THE SITUATION
predominant reaction ofto recentb-ien one of sntlafaction over lb* clear and sharp conflict
a
which has emerged behe Weatern Powers and Israel's principal Arab eaesoy. Despite some concern teat Nasser in -creaee bis power by another eacceee agaiaat Ihe West, (aad there by aiao acaleve tb* power permanently to block leraali aces is to The Sues Caaal) Israel almost certainly counts oa being able toet benefit from the situation.
general, laraal may be eapeeted to pursue tbethe more trouble tha Western Poware have with the Arab
the greater should be their supporteel. The most imrr-adiele objecUve of Che Israelis wUl be to secure erase from tbe West, hceaag that tha Vestara Pour*re1 resentmeot ead dsa-iUueioD wf thOl ceaee them totheir previous policies egelaet arming Israel, laraal also probably teals that the opportunity has oorne to locus attentloa oo it* own transit righU iu Sueshe Gulf c4pt ha. always dented it (with manor eaception* la the caee ot* vessels ot* otbar nnOoc* carrying Israeli cargoes). Israel will probably aeak to asaoclata lts.il with any multilateral internetiouel actloa taken egaiaat Naeeer oa Che caaal issue, ead will also press to tb* UN and with tb* Waste ra Power* for Irnplamantettoo of1 UN Security Council raaolotlou calling oo Egypt to permit the transitipping duoajgh lb* caaal.
43. Ureal would probably arcane Weetera eatlitary actiono Naeseraelaure of the canel. Tbed probably estimate that dsUrmioed Weatara military acdon would not only lead to Naaeer'e downfall, but would also vary Ukaly
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st.ikvMTiri blow at the potential for aetioa of millatt<Uiaoll element* la Syria aad Jordan. We believe thai tba cbaacna are agcdnat Israel it*elf deliberately irdcUtlng war wifb ESTF*.during the eerly ph**e* of the preeenl ert*le. The danger of each action might materially increase If tbe Weetera Powers undertook military actionIn which case Israel might seek to Join them; or If Weetera relatione with sTgypt deteriorated ao drsettcaUy that lerael coald feel reaeonab'yof avoiding as vera Weeleru punitive measureaeeult of attacking Egyptreeumably with tbe aim of destroying ths Egyptian force* aada*r. Short of each aftuatioes, Israel'* military policy toward Egypt and its other Arab nesfJhbore Is Uasly to remain confinedoeah one of retaliation for border hare* amenta ando fight if border :
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