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

150. Memorandum From the Assistant Secretary of State for Near Eastern and South Asian Affairs (Talbot) to the Under Secretary of State (Ball)⁰

Washington, December 18, 1961.

SUBJECT

• Situation Developing in Iraq

I believe it is timely to call to your attention and to that of other senior officers of the Department the situation that is developing in Iraq. In brief, prior to late June, 1961, there had been signs of a gradual orientation away from the Soviet Bloc, but since the time that Kuwait, which is claimed by Iraq, began to receive international recognition as a state following the new political and security arrangement between Britain and Kuwait on June 19,¹ Iraq has moved increasingly toward the Soviet Bloc in the conduct of Iraqi political and economic affairs and in its propaganda position. During this process, until recently, the Iraqi Government gradually increased its repressive measures against domestic communists, to the point that we came to believe that communist ability to threaten the security of the Iraqi state had been neutralized.

Now, however, we believe a new phase may have been opened. Perhaps as the tacit price for the recent Soviet veto of Kuwait’s application for membership in the UN,² the Iraqi Government in the past two weeks has taken several steps which appear to permit the internal communists to strengthen considerably their internal position. In addition, Iraq has taken the drastic step of expropriating all of the IPC (and affiliates) concessionary areas except for fields now in production.³ The Iraqi action against IPC was more drastic than we had reason several weeks ago to believe would be the case. Again it would appear that the Iraqi action, while calculated to avoid causing IPC to cease or decrease production, may have been more severe than originally intended in order to compensate the Soviet Union for its veto and in order to attract stronger Soviet support against inevitable IPC and Western pressures. It is, of course, possible that further measures against IPC are being contemplated.

The situation in Iraq, therefore, appears to be returning to something like the post-revolutionary period in 1958 and 1959, during which there was great alarm that Iraq was going communist. While in that period there were no issues between Iraq and the West other than the communist threat, now two other issues between Iraq and the West are included in the unhappy equation: (1) Iraq’s claim to Kuwait, strongly pressed by Iraq’s present leadership and (2) Iraq’s unilateral violation of a major Western economic arrangement with Iraq, IPC.

As a result of Iraqi action against IPC, we consider it possible the Department will be urged to retaliate against and place other pressures on Iraq. Likewise, as the Iraqi communists regain an important role in Iraq and appear to threaten Iraqi independence, there is likely to develop within the U.S. a strong feeling that we should intervene in Iraqi affairs. It would appear that Iraqi leadership intends to play a game of brinksmanship in its efforts to gain control of Kuwait and to obtain at least part ownership of IPC, utilizing Soviet support and frightening the West by permitting the resurgence of internal communism. That Iraq will use military force against Kuwait cannot be ruled out, although there would appear to be cogent reasons against doing so despite the richness of the prize.

From the Iraqi revolution on July 14, 1958 until the new British arrangement with Kuwait on June 19, 1961 the U.S. followed a policy of patience, tolerance, and scrupulous nonintervention toward Iraq. That policy paid dividends in the form of a gradual improvement in the atmosphere of U.S.-Iraqi relations and there appeared to be a prospect of even more fruitful relations including increased Iraqi importation of U.S. goods and services. However, following our declaration of open support for the independence of Kuwait and our approval of the U.K. military intervention in Kuwait, in both of which we had no suitable alternative, we were informed by the Iraqi Government that we had made a mistake and U.S.-Iraqi relations would suffer. The full ramification of Iraqi intentions is now becoming clear.

Short of direct military intervention, whether by U.S. forces alone or in conjunction with others or by Iraq’s neighbors friendly to the West (Turkey, Iran, Jordan and Saudi Arabia), we lack effective means of achieving a reversal in Iraqi policy. While cessation of IPC production would not now appear likely, we believe that, if a decision were made to stop production, it would not necessarily create the desired effect and might well create even greater problems.

While it is clear that we must in due course openly object to the Iraqi move against IPC and must consider whether to endeavor to prevent Iraq from gaining from its unilateral breach of an important contractual obligation, we believe that we must exercise due caution in the manner and intensity of our official resistance to the Iraqi action. Further, we believe we must resist firmly all efforts to force us to undertake intervention of any type in the internal affairs of Iraq unless and until it is clear that the domestic communists stand to gain control of Iraq in absence of such intervention. In the present circumstances, for the U.S. and/or its friends to place severe pressure on Iraq or to intervene ineffectively in Iraq would only serve to increase the likeliHood of a situation we do not want: a communist takeover.

We cannot guarantee that Prime Minister Qassim will not prove to be another Castro, though his past actions in reducing the Iraqi communists to relative impotence would justify the conclusion that he is an Iraqi and Arab nationalist and that he does not wish Iraq to fall under external control whether directly or indirectly. We believe, however, that he is capable of playing a serious game of brinksmanship with the Soviets and internal communists in pursuing his great nationalistic objectives.

Our objective is to the best of our ability to avoid pushing Iraq further along its present path and to endeavor to persuade certain of our allies and friends to pursue a similar course. In so doing the Department will be obliged to resist pressures from both within and without the U.S. Government to make statements and undertake actions that would be detrimental to the achievement of our objective. That there is serious risk in this course may be a frequent charge. That there would be serious risk in doing otherwise is our considered opinion.

0. Source: Department of State, Central Files, 787.00/12–1861. Secret. Drafted by Strong on December 15 and concurred in by Glidden (INR). Copies were sent to McGhee (M), Rostow (S/P), and Hilsman (INR). Sent to Bundy at the National Security Council on February 15, 1962, under cover of a memorandum from Battle that reads: “In response to Mr. Komer’s oral request, I enclose a copy of a memorandum entitled ‘Situation Developing in Iraq’ sent by the Bureau of Near Eastern and South Asian Affairs to the Under Secretary of State on December 18, 1961. The situation described therein is essentially unchanged and our views remain the same.” (Ibid., 787.00/2–1562)
1. During a meeting of the U.N. Security Council on November 30, the United States and nine other members of the Security Council voted in favor of a draft resolution, introduced by the United Arab Republic, that contained a Security Council recommendation to the General Assembly that Kuwait be admitted to the United Nations. Kuwait was eventually admitted to the United Nations on May 14, 1963.
2. The Soviet Union voted against the draft resolution on Kuwait.
3. On December 11, an Iraqi Government decree nullified the exploitation rights of the Iraq Petroleum Company (IPC) and its affiliated companies (Mosul Petroleum and Basra Petroleum) on all .5 percent of the original concessionary area of 172,000 square miles. Negotiations between the Iraqi Government and the Iraq Petroleum Company to revise the concession had begun in August 1958 and were broken off on October 12, 1961, when IPC refused to accede to several Iraqi demands. Standard Oil of New Jersey and Socony Mobil owned 23.75 percent of IPC. (Memorandum from Strong to Talbot, December 13; Department of State, NEA/NE Files: Lot 63 D 33, Baghdad; Circular telegram 1129, December 17; ibid., Central Files, 887.2553/12–1761) Additional documentation is ibid., 877.2553. See also Supplement, the compilation on Iraq.