Office of the Historian

389. Memorandum From the Deputy Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Rountree) to the Secretary of State1

Washington, June 6, 1956.

SUBJECT

  • Aswan High Dam

Discussion:

Before your departure you requested that a statement be prepared for use in case it was decided not to go forward with the Aswan High Dam project, couched in such a manner that it would be embarrassing for the Egyptians to seek assistance from the Soviet Union.2 You suggested that we might indicate that the magnitude of the project was such that Egyptian independence of action would be endangered if Egypt was beholden to any foreign country for construction of the dam. A draft statement is attached for your consideration (Tab A).

Other developments regarding Egypt include the following: In accordance with the Department’s instructions (Tab B)3 Ambassador Byroade discussed the Aswan High Dam with the Egyptian Minister of Finance and requested current Egyptian views on the project. The Minister replied that Egypt is anxious to resume negotiations (Tab C).4 We do not interpret this reply as indicating the Egyptians have decided to take further steps immediately. In the [Page 718] meantime, the British have informed us that they will be raising the entire project with the Department shortly.5

We have received comments from our missions regarding our suggestion that a regional conference of riparian states might be used as a device to block an Egyptian–USSR agreement on the dam. Khartoum reports that an immediate Sudan–Egyptian agreement on division of Nile waters is unlikely, which makes the riparian conference project less urgent.6 Cairo is strongly opposed,7 while Addis Ababa thinks Ethiopia will probably cooperate.8 The British have agreed to let us have their considered views quickly. Kirkpatrick’s initial reaction was favorable.

Recommendation:

1.
That we commence further talks with the British regarding the High Dam and the riparian conference.9
2.
That we defer a public statement (Tab A) on the Dam at this stage but hold it ready for use in an emergency. It would be necessary in any event to discuss the Dam further with the Egyptians before issuing a statement. We prefer to avoid a public clash with Egypt at this moment. Meanwhile, we would conclude our talks with the British.

[Tab A]

DRAFT STATEMENT ON HIGH DAM10

In response to a request from the GOE the US joined with the UK and IBRD in December, 1955 in offers to assist through grant economic aid in the construction of a High Dam on the Nile at Aswan. In January, Egypt commented upon these offers. In addition Egypt has sought agreement with the Sudan on division of Nile waters prior to commencing construction.

The Dam and its ancellary features will cost about $1.3 billion and will require about 16 years to complete. The magnitude of the project is such that it would require the GOE to impose stringent economic and financial controls, channeling much of its available foreign and domestic resources to this project; draw heavily upon foreign technicians; and borrow abroad a large percentage of the [Page 719] funds required thus mortgaging a sizeable portion of its future income over the next 25–50 years.

The US has been studying carefully whether a project of these dimensions and as now conceived could be carried out usefully for the benefit of the peoples of the area under existing conditions. The factors which have been taken into account include: (1) the availability of required Egyptian funds, particularly in view of the other purposes to which that government is now putting its resources; (2) the effects in the present climate of opinion of the introduction into Egypt of a large number of foreign technicians and the contraction of large foreign loans; (3) the need for area stability to permit the successful conclusion of the project and (4) the requests of other riparian states for consideration of their interests in the waters of the Nile prior to construction of major works.

Against this background the US for its part believes it would be wise to defer commencement of the project until conditions in Egypt are such that Egypt could participate fully without undue reliance upon outside assistance and without apprehensions of impediments upon its full independence of action, and until the necessary understandings have been reached with the riparian states. The US remains deeply interested in the development of the Nile and is prepared to consider at an appropriate time and at the request of riparian states what steps might be taken towards the equitable utilization of the water resources for the benefits of the peoples of the region.

  1. Source: Department of State, Central Files, 874.2614/6–656. Top Secret. Drafted by Burdett and Shaw.↩
  2. During a meeting on May 25 with Hoover, MacArthur, Rountree, Wilkins, and Kirk, Secretary Dulles “suggested that we might make a statement that the magnitude of the task was such that we felt Egyptian independence of action would be endangered if they were beholden to any foreign country for its construction.” (Memorandum for the record. May 25; ibid., S/S–NEA Files: Lot 61 D 417, Omega #5)↩
  3. Tab B is Document 365.↩
  4. Tab C is Document 379.↩
  5. See Document 384.↩
  6. See Documents 372 and 383.↩
  7. See Documents 370 and 371.↩
  8. See Document 374.↩
  9. See Document 395.↩
  10. Top Secret. Drafted by Burdett and Shaw.↩