Foreign Relations of the United States, 1949, The Near East, South Asia, and Africa, Volume VI

867N.48/4–2249

Memorandum by the Coordinator on Palestine Refugee Matters (McGhee) to the Secretary of State

secret

[Washington,] April 22, 1949.

Subject: Palestine Refugee Problem.

Discussion

Attached are the following papers on the Palestine Refugee Problem based on careful study by the Departmental officers concerned and observations during my recent visit to the Near East. They develop from the Policy Decision of March 15, 1949,¹ certain new Policy Recommendations and a Proposed Plan of Action.

1. Policy Decision of March 15, 1949.

2. Conclusions.

3. Policy Recommendations.

4. Proposed Plan of Action.

5. Proposed Steps to be Taken Within U.S. Government.

6. Tentative Approach to Total Cost of Program.²

Recommendation

It is recommended that the proposed Policy Recommendations be approved.

[Annex 1]

Palestine Refugee Problem

conclusions

1. Although, the total number of Palestine refugees and destitute persons now receiving relief is 950,000,^* it is assumed that the maximum number of bonafide displaced persons who must eventually be repatriated or resettled will not exceed 700,000. The difference will be largely applicable to Arab Palestine.

2. The disposition of the refugees is now a political issue of the highest order between Israel and the Arab States, neither of which will consider it as a refugee problem. This situation will probably continue until there is some general peace settlement.

3. In the meantime, continuing and vigorous pressure will have to be exerted upon Israel and the Arab states if their agreement to repatriation and resettlement, respectively, on the scale required, is to be secured. With the exception of Transjordan, which appears to see in the refugees an opportunity to improve her political and economic position, the Arab states are reluctant to accept refugees for permanent resettlement for political as well as economic reasons. They take the position that Israel, and to a lesser extent the United Nations and the United States, created the problem and are responsible for its solution. They feel that this should be through repatriation, in accordance with Article 11 of the General Assembly Resolution of December 11, 1948. The Israelis, on the other hand, are reluctant to repatriate any large number of refugees because of economic and security considerations, and because of the need for land to carry out their planned Jewish immigration program. The Israelis take the position that the problem was created by the invasion of the Arab states, and must be solved by resettlement.

4. Agreement by Israel to repatriate at least 200,000 refugees, pursuant to the General Assembly Resolution, is considered a necessary precedent to any ultimate and satisfactory solution of the refugee problem. This is necessary to reduce the total to a number capable of assimilation on a self-supporting basis in the Arab countries within a reasonable time, and to provide a favorable atmosphere for assumption by the Arab states of the responsibilities involved hi the resettlement. In view of the large-scale preemption of Arab lands, housing and employment possibilities in Israel, primary attention should be directed to securing repatriation of refugees to those formerly predominantly Arab areas now under Israeli military occupation which are outside the boundaries of the Jewish state as defined in the resolution of November 29, 1947.

5. There has been no appreciable absorption of refugees into the existing economies of the Arab states, nor can there be under present conditions without increase in unemployment, further depression of the already low standards of living and deterioration of the political stability of the Arab states, already seriously undermined by economic problems and the recent hostilities.

6. The refugees will continue to be largely dependent for their support upon assistance from outside the Arab states, after termination of the present UNRPR relief program now expected at the end of the year. The present number of refugees cannot be supported by the Arab governments nor by the voluntary relief organizations, either within or outside the Arab states.

7. At the earliest possible date and certainly at the termination of the present UNRPR program, assistance to the refugees should wherever possible be on a work rather than a relief basis, even though the initial cost per refugee is greater. A work relief program will serve to check the present serious deterioration in morale among the refugees, and will result in accomplishment of useful work directed toward their own resettlement, toward raising; the economic potential of the country in which they live and toward an orderly reduction in heed for further outside assistance.

8. Absorption of the refugees into the economies of the Arab states on a self-supporting basis can only be achieved through raising of the economic potentials of the countries involved through increase in amount or productivity of arable land, development of new industries, improvement in transportation, etc.

9. Apart from political considerations Syria, Iraq and Transjordan offer significant possibilities for resettlement or employment of refugees. Lebanon offers limited possibilities. Egypt and Saudi Arabia could take only token quotas. Although possibilities for immigration to other countries should be thoroughly explored, the number involved would probably not be great. Resettlement possibilities:

	2–3 Years	5–10 Years
Syria	Up to 200,000	Up to 750,000
Iraq	Token	Over 750,000
Transjordan (and Arab Palestine)	150–200,000	Same
Lebanon	Up to 50,000	Same
Egypt	Token	Same
Saudi Arabia	Token	Same
Other	Small	Same

10. Overall responsibility for the refugee problem should be placed squarely on Israel and the Arab states. All outside assistance should be under the auspices of the. United Nations. Any plan developed to deal with the refugee problem should be formulated within this context, and should utilize all possible sources of assistance including interested and able UN member states, specialized agencies, related international organizations and private organizations. Although any United States contribution to solution of the refugee problem should be made available within the framework of UN responsibility, the US should assure that its assistance is effectively utilized through supervision of development and work relief projects undertaken wholly or largely with US funds.

11. The objective of a refugee program should be to repatriate or resettle the refugees as rapidly and economically as possible, while minimizing present and potential economic and political dislocations. For example, although on political grounds Syria and Iraq are reluctant to take refugees, their ability to provide a basis for eventual self-support is far greater than that of Transjordan, whose acceptance of the majority of the refugees would necessitate permanent subsidization of the county.

12. In order to secure the cooperation of the Arab states, any solution of the refugee problem must be formulated within the broader framework of the interests of the countries concerned. This will require full recognition of the legitimate economic development aspirations of the countries involved, in their own interest as well as in the interest of solving the refugee problem. Nationals of the countries concerned should in many cases be the immediate beneficiaries of the projects, with the refugees benefiting indirectly. Since the development projects required for solution of the refugee problem will probably absorb most of the external financing available for the Near East during the next few years, the questions of economic development and of the solution of the refugee problem are indivisible, and both must be taken fully into consideration and carefully coordinated in any overall plan which is evolved. This would also apply to United States assistance to the Near East through the “Point Four” Program.

13. Insofar as possible all outside assistance to the Arab states in connection with the refugee problem should, for internal Arab political reasons, have at least the appearance of being as a result of the request of the states concerned.

14. The present distribution of the refugees among the Arab states has an important bearing on the situation that would result if no further outside assistance were provided after termination of the UNRPR program. Only Lebanon and Transjordan would face a really difficult situation in caring for or assimilating their refugees. If Transjordan acquires all of Arab Palestine, including the Gaza strip, she will have on present figures 729,000 refugees, in comparison with an original population of 850,000. Transjordan is in reality an artificial state created by the British, and exists only by virtue of a British subsidy. The total government budget is only $5,000,000. It is itself unable to do anything for the refugees and their care, and at the termination of the UNRPR program, would remain a responsibility of the UN, the UK or whoever would be willing to assume it. In their present mood and circumstances other Arab states have neither the desire nor the resources to assume it, and would be in good position not to assume it.

15. No new program which gives hope of solving the refugee problem should be initiated unless financing can be assured for the achievement of certain minimum objectives. Failure of the program due to lack of financial support would further prejudice UN and US prestige and relations with the Arab states, and further aggravate the dangerous economic and political conditions created by the refugee problem. Although as much as possible of the financial assistance required should be furnished on a loan basis, grants will continue to be required, particularly for work relief and local currency costs.³

[Annex 2]

Palestine Refugees

policy recommendations

It is recommended that:

1. As an essential condition to the solution of the Palestine refugee problem, the United States exercise continuing pressure on Israel by all appropriate means to repatriate a minimum of 200,000 Arab refugees, to Israel and Israeli-occupied areas of Palestine, from refugees now outside this area eligible for and desiring repatriation.

2. The United States exercise coordinate pressure on the Arab states to accept and cooperate in the resettlement of the remaining Arab Refugees (approximately 500,000).

3. It be recognized that there will be need for continuing outside assistance for the refugees after termination of the present UNRPR program (now estimated as December, 1949).

4. Such outside assistance continue to be extended under the auspices of the United Nations.

5. Such assistance place primary emphasis upon work relief rather than direct relief, and be directed toward a progressive reduction and eventual elimination of outside assistance, through reintegration of the refugees on a self-sustaining basis into the political and economic structure of the Near East, in such a manner as to create a minimum of present and potential economic and political tensions.

6. The United States cooperate actively with the Palestine Conciliation Commission in the development of a program for achieving the foregoing objectives, for presentation to the General Assembly at the September session.

7. Funds required for execution of this program be obtained to the maximum extent possible through loans to the states concerned from the International Bank for Reconstruction and Development, the United States Export-Import Bank and from other member states, and through assistance from the United Nations and its specialized agencies and international organizations.

8. The United States be prepared to contribute as a grant, subject to Congressional appropriation, its share of such additional technical and financial assistance as it considers necessary to achieve the minimum objective of the overall program, while at the same time refusing to accept direct responsibility for the problem and confining United States assistance thereto within limits consistent with the national interest.

9. The general plan of action set forth on the attached statement be pursued in the attainment of these objectives.

[Annex 3]

Palestine Refugee Problem

proposed plan of action

1. Initiate immediately, together with the United Kingdom, a concerted program to overcome the present political stalemate preventing the Arab States and Israel from facing the refugee problem realistically and constructively. Full use should be made of direct diplomatic approach, official statements, publicity, etc., particularly as a background for the forthcoming extended talks between the Arab States and Israel in Switzerland.

2. In the meantime encourage all new public and private programs and projects, such as the UK pilot irrigation project in Transjordan and the International Bank flood control project in Iraq, which can be initiated within the present context and which will serve to alleviate the refugee problem in both its short and long range aspects.

3. Recommend to the Palestine Conciliation Commission that it establish permanent headquarters and add to its staff such administrative and technical personnel as are required for carrying out its operational responsibilities as they arise. Services should be initiated as soon as practicable to achieve coordination with the UNRPR program, to facilitate repatriation, resettlement and compensation, employment and emigration of refugees, and to represent the refugees vis-à-vis Israel and other governments.

4. Support the PCC proposal that it add to its staff other technical experts to initiate certain planning studies with respect to the refugees and the problems which will be faced in their repatriation and resettlement, which can be undertaken immediately within the present political context. Assist in the recruitment of the necessary personnel.

5. Initiate immediately planning required for the establishment of a broader economic survey group to be set up under the authority of the PCC as soon as political conditions permit, which would, in full cooperation with the states concerned and with other interested UN members, international and private organizations, examine the situation in the countries concerned in the light of existing surveys and recommend measures required to:

a. Overcome economic dislocations created by the recent hostilities;

b. Provide necessary assistance for refugees from the hostilities and for their reintegration into the political and economic life of the area on a self sustaining basis;

c. Foster actively such economic development projects as are required to achieve the foregoing and which will, at the same time, serve to increase the economic potential of the countries concerned.

The technical group would recommend specific projects and sources of financing, as well as an integrated economic program and means of carrying it out.

6. At an appropriate stage in the work of the economic survey group, a more permanent agency would be created, pursuant to PCC recommendation, to carry out the approved program. Such agency would rely wherever possible on direct action of the states concerned, other UN members, international and private organizations. It would coordinate such activities, facilitate the furnishing of technical and financial assistance required and exercise general supervisory functions.

[Annex 4]⁴

Palestine Refugee Problem

proposed steps to be taken within u.s. government

1. Approval of proposed Policy Recommendations and Plan of Action by the Secretary.

2. Preliminary discussion of proposed policy and plan of action with the President, particularly with respect to Recommendations 1 and 8.

3. Preliminary discussion of proposed policy and plan of action with Congressional leaders, particularly with respect to Recommendation 8.

4. Preliminary discussion of proposed policy and plan of action with the British, and determination of part UK can and will play in refugee program.

5. Initiation of action under Recommendation 1 and 2 and Proposed Plan of Action 1–5.

6. Preliminary discussion with Presidents of International Bank and Export-Import Bank to determine extent to which their institutions can participate in financing development projects which will contribute toward refugee resettlement.

7. Discussions with representatives of U.S. private organizations interested in the Palestine refugee problem to obtain their views on the proposed program and the contribution they can make to it.

8. Referral of whole question of the Palestine refugee problem to the National Security Council for decision as to action called for in the light of the national interest.

9. Final decision by the President on action to be taken in the light of the NSC decision.

10. Final discussion of President’s program with Congressional leaders, with indication of possible financial assistance to be sought from Congress.

11. Assuming political conditions in Near East permit, activate economic survey group called for in Recommendation 6 and Plan of Action 5 by assisting PCC to obtain outstanding American to head up group and competent technicians for its staff.

[Annex 5]⁵

Palestine Refugee Problem

tentative approach to total cost of program

1. Approach on basis of cost for support of refugees:

Assume that outside assistance for direct support of the refugees will be required on a decreasing scale for 3 years.

Assume that 700,000 refugees must be supported for the first year, whether resettled or repatriated, an average of 500,000 for the second year, and an average of 300,000 for the third year.

Assume that the total outside cost of supporting refugees is $30.00 per person per year on a relief basis and $60.00 per person per year on a work relief basis.

Assume that 3/4ths of refugees will be supported the first year on the basis of work payments and l/4th on the basis of relief, and that in the next two years 7/8th will be supported through work payments and l/8th through relief.

Total Cost for Direct Support on This Basis

	1st year	2nd year	3rd year	Total
Relief	$5,250,000	$1,875,000	$1,125,000	$8,250,000
Work	31,500,000	26,250,000	15,750,000	73,500,000
Total	$36,750,000	$28,125,000	$16,875,000	$81,750,000

2. Approach from standpoint of resettlement cost:

Assume total cost of resettlement is $350.00 per person and for repatriation $175.00 per person.

Assume 2/3rds of these sums will be paid for wages and other local currency costs which will be furnished on a grant basis, and l/3rd for foreign exchange expenses or other items which can be set up

on a loan basis.

Assume these funds will be required over a period of three years in ratio 5.3.3.

Total Cost for Resettlement

	1st year	2nd year	3rd year	Total
Loan	$32,000,000	$19,000,000	$19,000,000	$70,000,000
Grant	64,000,000	38,000,000	38,000,000	140,000,000
Total	$96,000,000	$57,000,000	$57,000,000	$210,000,000

3. Although there is on the basis of “2”, adequate grant funds for expenditure for wages of refugees it cannot be assumed that all of these funds will be applicable to refugees. Some refugees will not be employable on resettlement projects, and some resettlement wage expenditures must be made to other local labor.

Capital outlays in addition to those required for refugee resettlement will also be required to assure a balanced program within each country and to provide some legitimate development in the countries concerned not directly connected with refugee resettlement.

4. It is tentatively estimated that total cost of an integrated program will be between 250,000,000 to 300,000,000, of which approximately 2/3rds will be on a grant basis and l/3rd on a loan basis. Source of such funds might be as follows:

International Bank and/or Ex-Im Bank	$100,000,000
Compensation from Israel	50,000,000
Grant thru UN	100–150,000,000
U.S. share (70%) of grant†	70–105,000,000

1. See Mr. McGhee’s memorandum of March 15 and footnote 4 to that memorandum, p. 828.
2. Nos. 2 to 6 are printed, below. Their specific authorship is not indicated but the presumption is that they were drafted in Mr. McGhee’s office. All of these papers were dated April 27 unless otherwise indicated. The editors suggest that papers of earlier date were originally attached to the memorandum of April 22 and that these revisions, chiefly dated April 27, superseded the earlier papers and were subsequently attached to the memorandum of April 22.
3. Distribution of refugees and destitute persons, as estimated by Palestine Conciliation Commission:

   Syria	85,000
   Lebanon	131,000
   Iraq	5,000
   Arab Palestine	630,000
   Transjordan	99,000
   Egypt
   Israel
   Total	950,000

   [Footnote in the source text.]

3. Mr. McGhee, in letters of April 29, transmitted copies of the Conclusions and of the Proposed Plan of Action, below, to London, Beirut, Damascus, Tel Aviv, Amman, Baghdad, and Cairo.
4. This paper is undated.
5. This paper is undated.
6. Near East already allocated $12,000,000 for fiscal 1950 for technical assistance under planning for Point Four Program. [Footnote in the source text.]