Foreign Relations of the United States, 1961–1963, Volume XVII, Near East, 1961–1962

256. Memorandum of Conversation⁰

Washington, April 26, 1962, 4:03 p.m.

SUBJECT

• Outcome of Dr. Kaissouni’s Mission

PARTICIPANTS

• For the United Arab Republic
  • H.E. Dr. Abdel Moneim Kaissouni, Minister of Economy
  • H.E. Dr. Mostafa Kamel, Ambassador
  • Dr. Hamid El Sayyeh, Under Secretary, Ministry of Economy
  • Mr. Hassan El Abd, Commercial Counselor
• For the United States
  • The Secretary
  • Phillips Talbot, Assistant Secretary, NEA
  • William S. Gaud, Assistant Administrator, AID
  • Enoch S. Duncan, OIC, Economic Affairs, NE

The Secretary commented that Dr. Kaissouni’s mission had had a most satisfactory outcome for which he was pleased.

Dr. Kaissouni expressed deep gratitude for the courtesy and kindness with which his mission had been received. This would be reported fully to his Government. He confirmed that agreement with the IMF management had now been reached and he had earlier that afternoon given a letter of intent to Mr. Jacobsson regarding financial measures to be taken by the UAR.¹ The Secretary observed that the arrangements with the Fund marked a central point from which to begin many things.

Dr. Kaissouni reviewed briefly the intended U.S. assistance which would include help in the current balance of payments problem and support for the stabilization program—between $20 million and $30 million depending upon contributions from other Western powers—and consideration of projects which would total about $50 million.

Dr. Kaissouni had talked with IBRD President Black, whom he described as an old friend of Egypt, regarding an economic development consortium. Mr. Black’s response had been encouraging and he had promised to send experts to report on the UAR plans and prospects as soon as Bank staff availability would permit. Dr. Kaissouni said he had pressed for a complete report in time for discussions with other countries’ finance ministers during the annual Bank and Fund meeting in September; but Mr. Black regarded this as too tight a schedule. Dr. Kaissouni hoped the Bank might consider recruitment of a team outside Bank staff, recalling the mission of General Wheeler at the time of the Suez crisis.²

The Secretary said he would take the opportunity of his meeting with NATO Foreign Ministers in the coming week to raise the matter of support for the stabilization program and asked which countries Dr. Kaissouni thought would be appropriate. He stressed the importance of the UAR taking the primary initiative with these countries. The U.S. could be helpful through indicating friendly interest.

Dr. Kaissouni replied that they were contacting Germany, UK, Italy and Japan. In the case of France, the UAR did not yet have diplomatic relations. However, the Ambassador suggested sounding out the French in view of the more favorable prospects in Franco-UAR relations.

In concluding the discussion of Dr. Kaissouni’s mission, the Secretary re-emphasized the importance of IBRD leadership in the long-term development area. Dr. Kaissouni’s report reinforced the Secretary’s impression of Mr. Black’s deep interest in Egypt’s future. If the Bank was able to move forward, this was a good sign. Although the Secretary’s intended conversation with various NATO ministers regarding short-term payments assistance would naturally be in the framework of its long-term problem, he did not want to step out ahead of the Bank at this time in any specifics of a possible long-term consortium.

The Secretary concluded that he was especially pleased that there had been achieved on both sides a high degree of clarity on what lies ahead.

Ambassador Kamel expressed his happiness that Dr. Kaissouni’s mission had been a success and now foresaw the way to resolution of many difficult issues. The Secretary responded that he hoped the Ambassador would take quiet satisfaction in this outcome.³

0. Source: Department of State, Central Files, 033.86B11/4–2662. Confidential. Drafted by Duncan on May 1 and approved in S on May 10. The source text is labeled “Part I of Two Parts”; regarding Part II, see footnote 5 below. The time of meeting is from Secretary Rusk’s Appointment Book. (Johnson Library)
1. The Department of State reported in circular telegram 1848, April 27, that on April 26 Kaissouni signed a letter of intent for a stabilization program acceptable to IMF management. Managing Director of the IMF Per Jacobsson would recommend shortly for Board approval a program including a standby program for $42.5 million. The IMF Board would also consider in the near future a UAR request for a quota increase from $90 million to $120 million. (Department of State, Central Files, 886B.10/4–2762)
2. Reference is to General Wheeler’s involvement in the clearing of the Suez Canal following the crisis. For documentation on the clearing and reopening of the Suez Canal, see Foreign Relations, 1955–1957, volumes XVI and XVII.
3. A separate memorandum of this conversation records the closing exchanges between Rusk and Kaissouni. Secretary Rusk asked Kaissouni to convey to his government U.S. regret over the necessity to resume nuclear testing and U.S. determination to continue to seek a test-ban agreement. The Secretary concluded the meeting by asking Kaissouni to convey the Secretary’s regards to President Nasser and to Foreign Minister Fawzi, an old friend. (Memorandum of conversation; Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330)