Office of the Historian

67. Message to Washington1

No. 67
Cairo, February 2, 1956.
1.
Add following to Message No. 60.2 Much of meeting was actually devoted to Nasr’s reflections on Egypt’s economic future and he gave strong impression he has taken over role of chief planner in this field. He indicated that he is now in what will be prolonged period of reconsidering government’s economic activities and that he had already been obliged perform major surgery on social services budgets, halving future expenditures for such things as hospitals, village centers, etc. In this connection he expressed great perturbation with regard to future development aid from the United States. He said that the announced intentions of U.S. to divert economic aid to direct support of high dam had left Egypt with a [Page 128] number of projects undertaken on basis last year’s development aid program and which now must be completed with Egyptian funds. He said some of these might not have been approved had he known that Egypt would have to complete them from her own resources.
2.
Nasr appeared to feel he may have to wait a while before starting the high dam project. He specifically said he realized that an agreement with the Sudan was an absolute precondition. He was likewise adamant that firm outside commitments with regard to financing of this project were also a precondition to the undertaking. As mentioned in Message No. 60 Nasr wants to negotiate a loan agreement with IBRD and says that any letter of intention or commitment which leaves a future negotiating problem before the financing actually becomes available will not provide him with the necessary assurances to justify the huge expenditure of Egyptian pounds required to bring the project along during the next five years. Nasr had a copy of the agreement between India and IBRD covering the Demodar project on his desk and professed not to understand why the high dam could not be covered now by a similar agreement.
3.
Nasr’s attitude was reported fully … to Eugene Black the following morning.3 While recognizing that this represents—at least for the time being—rather decisive parting of the ways between IBRD and Egypt Black indicated that he was prepared to regard the matter publicly as a still open issue.
4.
As mentioned in Message No. 60 Nasr appeared decidedly relaxed about the military aspects of a major Israeli attack. He seemed quite positive that his force in the Sinai was capable of conducting a delaying action for two months after which time his striking force now forming in the rear would be available for General Amer to “play with.” He reiterated that his real concern was with the question of U.S. and other arms assistance to Israel which would oblige him to build a still larger military establishment. This would have to be done with Soviet assistance since “it is obviously the U.S. Government’s policy not to provide arms to Egypt.”
5.
Drafted 1200Z 1 February.
  1. Source: Department of State, NEA Files: Lot 59 D 518, Alpha—Anderson Talks w/BG & Nasser. Incoming Telegrams—Jan.–March 1956. Secret. Repeated to Athens. The source text bears a notation that Dulles saw the message.↩
  2. Document 62.↩
  3. February 1.↩