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

174. Circular Airgram From the Department of State to Certain Posts⁰

CA–9411

Washington, March 2, 1963, 1:05 p.m.

SUBJECT

• Interim Policy Guidelines for Dealing With Iraq and With the Implications for the Middle East of the Recent Iraqi Coup

Following for guidance all addressees:

SUMMARY

The recent Iraqi coup, described by coup spokesmen as a continuation of the Iraqi revolution of July 14, 1958, is a development of potentially fundamental importance for Iraq, the Middle East generally, and the United States. The United States can “live with” the new Iraqi regime, as presently seen.

Internally the GOI must deal with four principal problems, i.e., the Kurdish Revolt, the Iraq Petroleum Company (IPC), Constitutional Development and Economic Development. Failure to find a political solution to the Kurdish problem would benefit only the Soviets and the Iraqi communists. The US regards it as strictly an internal Iraqi matter. We should continue to consult with the UK on IPC matters and quietly encourage US shareholders of IPC to respond with flexibility to GOI initiatives on unsettled issues. We should express pleasure at expressed GOI initiatives on unsettled issues. We should express pleasure at expressed GOI intent to create a Constitutional situation. The GOI has enough resources, if properly managed, to promote economic development. The US should demonstrate willingness to assist Iraq in feasible ways without materially increasing the aid level. US businessmen should be encouraged to seek opportunities in Iraq, and the GOI should be encouraged to abolish Qasim’s restrictive measures against foreign business.

Externally, the GOI will have a strong position in the Eastern Arab world if it consolidates power and remains cohesive. Its goals and ideology will attract particularly the Syrians, Jordanians and Yemenis, and to a lesser extent the Kuwaitis, Saudis, and Lebanese. Wishing to concentrate externally on pan-Arabism, the GOI will seek friendly relations with Turkey and Iran to secure its rear. Competition between Iraq and the UAR is likely to occur. Israel will be apprehensive of Iraq’s enhanced influence.

The US should encourage friendly Iraqi relations with Turkey and Iran. The latter should be discouraged from intervening in Iraqi affairs. We should avoid use of the term “Fertile Crescent” and continue to maintain mutually beneficial bilateral relations with other Arab countries, remaining strictly impartial as between Cairo and Baghdad. The US (and UK) should encourage an Iraqi-Kuwaiti modus vivendi while continuing to support Kuwaiti independence. If Kuwait freely chooses to federate with Iraq, we should not oppose provided Kuwait retains full power of decision on oil matters. The US should continue strongly to support Jordan. Syria will be attracted to Iraq. The US should not oppose Syrian federation with Iraq, or the UAR; provided force is not used and a majority of Syrians freely approve. We should continue to respond sympathetically to Syrian requests for American assistance. We should use Saudi apprehensions about the GOI to encourage disengagement from Yemen and rapid advances in reform and modernization. We should reassure Lebanon and others, that we support their independence without reservations. We should not encourage Iraqi activities in Yemen because of the former’s hostility to the UK in Aden, and to the Saudi throne. Understanding Israel’s concern about implications of the Iraqi revolution, we should nevertheless continue to maintain even-handed impartiality between Israel and the Arab countries. At the same time, we should make known to the GOI and other Arab Governments our interest in Israel’s security and well-being, its right to exist as a state, and the desirability of eventual permanent peace between the Arabs and Israel.

A. The Internal Situation

Assuming that it will prove able to consolidate power, the new Iraqi Government (GOI), a Ba’thi-nationalist coalition, can be expected to emphasize pan-Arabism within the context of Iraqi national interests, and will be neutralist, reformist, and socialist (Scandinavian type). Its aims will appeal to the aspirations of the bulk of the Iraqi people. Following “pacification” of the country, including a Kurdish settlement, it is likely to seek to create a democratic and constitutional base and to devise a sounder approach to economic development.

From the standpoint of internal Iraqi affairs, we expect that the United States will be able to “live with” the GOI. Whatever the Communists may hereafter be called publicly, the GOI will wish to limit their influence. The GOI is expected to move to a non-aligned position which will in effect reduce the Bloc position in Iraq. We are hopeful that the GOI will negotiate reasonably with IPC. However, there are some longer range implications involving Iraq’s external policies which are less happy; these are dealt with in Section B.

Guidance follows on the four principal internal issues with which the GOI must deal:

1. Kurdish Revolt. Failure to find a political solution soon would benefit only the Soviets and the Iraqi communists.

US Position: The United States should continue to regard the problem as strictly an internal Iraqi matter in which there is no role for the United States either directly or indirectly. In discussion with Iraqis and others, United States officials should limit themselves to expressions of hope that the GOI and the Kurds will be able to come promptly to a mutually satisfactory agreement and the United States is pursuing a strictly hands-off policy. Our influence should be used with Iran and Turkey to assure a similar hands-off policy on their part.

2. Oil. IPC found it impossible to deal rationally with Qasim. While the new GOI will not be a “pushover”, indications are that it does wish to reach agreement with IPC on outstanding issues. A qualified and “reasonable” Minister now heads up the Oil Ministry, and he has taken the initiative to reopen talks with the IPC on one of the issues. We expect this to lead into talks on other issues in which it will become clearer how the GOI may wish to implement Law 80 and what role the Iraqi National Oil Company will play.

US Position: Traditionally, the IPC has been under British management and we see no reason to seek a change. Likewise, negotiations have always been conducted by the Company without UK or US governmental intervention. This should continue, although in the event of serious difficulty, consideration should be given to quiet discussions by UK and/or US officials with the GOI. The United States should keep in touch with the UK on developments and seek a common understanding at all times. The United States should also keep in touch with the United States shareholders in IPC (Jersey and Socony), and should encourage them to maintain a degree of flexibility in dealing with the GOI.

3. Constitutional Development. Qasim often promised the creation of a Constitution, a referendum thereon, and parliamentary elections, but nothing happened. The new GOI has stated publicly that it proposes to create a constitutional situation as soon as possible after order is restored (including a settlement with the Kurds). Given the Ba’thist stress on national unity, the new GOI hopefully will carry out its program.

US Position: As in the case of the Kurdish problem, creation of an internal political system is strictly a matter for Iraqi decision. In discussions with Iraqis, and others, United States officials should limit themselves to expressions (a) of pleasure at the publicly stated intentions of the GOI and (b) of hope that conditions will soon permit implementation. We should not seek to advise the GOI on the system to be adopted, nor do we need to tell the GOI how to handle its domestic Communism.

4. Economic Development. Properly managed, considerable resources, both public and private, are available to Iraq for internal development. Apart from effective planning, the greatest need is restoration of confidence on the part of businessmen. Ba’thist doctrine calls for a “mixed” economy with private investment permitted in fields other than basic resources. Thus there is wide scope for private enterprise. During Qasim’s regime, Iraq linked itself more and more closely to the Soviet Bloc in terms of development and trade. While it remains to be seen just how far Iraq will turn toward the West in these fields, precedents have been set in the UAR and Syria for continuing to rely on the Soviets for arms but turning away from the Soviets in economic matters.

US Position: Without increasing the level of aid appreciably, the United States should demonstrate willingness to be of assistance to Iraq in any feasible way. In particular US businessmen should be encouraged to seek opportunities in Iraq, and the GOI should be kept appropriately informed of the need to remove or at least to liberalize the restrictive measures imposed by the Qasim regime against foreign business. (See Deptel 251 of February 15, 1963.)¹

B. Iraqi External Policy

Assuming its consolidation of power, the new GOI will have a strong position in the Eastern Arab world. The goals and ideology which provide a strong popular base in Iraq will attract particularly the Syrians, Jordanians, and Yemenis, as well as to a lesser extent the Kuwaitis, Saudis, and Lebanese. Prior to the 1958 revolution, Iraq’s ability to play a key role in the Arab world was hindered by its unpopular connection with the West, and after 1958 was circumscribed by the Government’s alignment with the Soviet Bloc. Iraq is the second most populous and potentially powerful state in the Eastern Arab world after the UAR, and has a viable economy.

The new GOI, following Ba’thist policy, will strive for Arab unity on a federal basis, with foreign, military and Palestine affairs developed commonly; domestic policies are to be determined by each member. Differing from Nasser in his desire that one man and one state should dominate an Arab union and that the union should be made up of states modelled internally upon and compatible with the UAR, the GOI nevertheless regards Egypt as crucial to the Arab cause because of its geographic position, population and resources, and the GOI therefore will do everything possible, short of subordinating itself to the UAR, to avoid an open split. Rather, it will seek to modify Egyptian views to reflect its own.

Guidance follows on the external issues Iraq is likely to create for the United States.

1. Iraqi-UAR Competition. In seeking to consolidate the Eastern Arabs (Syria, Jordan, Kuwait, Saudi Arabia and Yemen), the GOI will create certain problems for the United States. (We think it will take a good many years for the consolidation to occur, but we consider that the trend is running in the Ba’thist direction.) Competition is likely to develop between Iraq and the UAR as the two principal power poles. This will face the United States with the need to walk the tightrope between the UAR and Iraq. Each will tend to interpret US assistance to its rival as an unfriendly act. In addition, the Ba’thist doctrine is highly nationalistic, and it will eventually seek to establish Arab control over Arab resources. Further, Ba’thist doctrine, in common with widespread Arab sentiment, is hostile to the continued existence of Israel, at least as a security threat to the Arabs and as a physical barrier between the two segments of the Arab world. Israel would react to placement of Iraqi forces on its frontier.

US Position: The United States posture should be one of strict impartiality as between Iraq and the UAR, and the United States should continue to conduct its relations with each Arab state on a bilateral basis in light of United States interests. We should avoid in any way furthering the “Fertile Crescent” theory, nor should the term be used in conversations or documentation. Since any United States interest in or pressure for regional development in the Eastern Arab world could only favor Iraq, we should avoid pursuing it. The GOI should be informed at an appropriate time of our criteria for Arab unity. Likewise, the GOI should be apprised of our concern for stability in Jordan, Kuwait, Saudi Arabia and Aden, as well as our interest in a rapid tempo of modernization and reform.

2. Turkey and Iran. Wishing to concentrate externally on pan-Arabism, the GOI seems likely to desire friendly relations with Turkey and Iran in order to have a secure rear while devoting itself to the main task.

US Position: The United States should do what it can with all three governments to ensure friendly relations. We should encourage both Turkey and Iran not to interfere in Iraqi affairs. If problems arise over the Shatt al-Arab between Iraq and Iran we should quietly seek to abate them.

3. Kuwait. We consider it likely that Iraq will not renounce its claim to Kuwait, but will seek a modus vivendi which would attract Kuwaiti resources for Iraqi investment, while tacitly recognizing Kuwaiti sovereignty. Such a settlement would be in United States interests. Kuwait and Iraq may later decide to federate.

US Position: If necessary, and in consultation with the United Kingdom, we should discreetly urge the parties to reach a mutually satisfactory resolution of the problem which will safeguard Kuwait’s independence. We should avoid any suggestion of United States bias in favor of either side on the terms of any settlement that would be worked out. Should Kuwait freely opt to federate with Iraq, we should not oppose provided Kuwait retains full power of decision over oil matters.

4. Jordan. Although a Ba’thist-dominated Iraqi Government will exert an attraction on Jordanians, we do not believe the Ba’th Party can build from its fragmented groups in Jordan an organization capable of overthrowing King Hussein at an early date. The bulk of the Palestinians have tended to look towards Cairo and Nasser for leadership, rather than to Baghdad. The Officer Corps of the Jordan Arab Army is made up of relatively less-well-educated tribal or semi-tribal elements which are relatively immune to various ideologies, including the Socialist and pan-Arab ideologies of both Cairo and Baghdad.

US Position. We should continue strongly to support an independent Jordan with American economic, military and technical assistance. We should encourage the reformist trends of the present Jordanian Government which is working for economic development and social reform. If Jordan can be persuaded to continue in the present direction, Ba’thist capabilities for developing a strong political organization will be reduced. Our vital interests are involved in the Jordanian status quo and the situation must be watched with care. Israel would be gravely concerned at the prospect of Jordanian unity with either Iraq or the UAR, because this would make possible the stationing of a larger, more modern army on her frontier with Jordan.

5. Saudi Arabia. We believe Iraq will exert some attraction in Saudi Arabia, and will wish eventually to create a political mechanism capable of eventually overthrowing the monarchy, but we doubt that an effective Ba’thist-nationalist organization can be built in a short time. While for Saudi Arabia Iraq can be a counterpoise to UAR pressures, we do not believe Iraq would agree to play Saudi Arabia’s game against the UAR in Yemen.

US Position: It would not be in our interest to attempt to create any special relationship between Riyadh and Baghdad. Since the Saudi Royal Family can only feel threatened from Iraq, we should use this fact to persuade Faysal to disengage from the Yemen and to move full speed on reform and modernization.

6. UAR. The Ba’th Party, which dominates the present Iraqi Government, has little strength in Egypt and its capabilities to subvert the UAR Government are considered nil.

US Position: We should maintain strict impartiality as between Iraq and the UAR and should continue our aid programs to the UAR provided the UAR does not seriously modify its present policies in an unfavorable way.

7. Syria. The new Iraqi regime will exert a powerful attraction for Syria, which is likely in the short-run to increase Syrian instability. We have little stake in Syria except to prevent Communist influence from dominating and to retain enough influence to be able to discourage Syrian activism against Israel.

US Position: In the probably approaching tug-of-war between Iraq and the UAR for the loyalities of Syria, the United States must studiously avoid any appearance of favoring one side or the other. We should continue to respond with sympathetic interest to Syrian requests for American assistance. We cannot oppose Syrian unity with the UAR or with Iraq, if that unity is approved freely by the majority of the Syrian people and is brought about without the use of force. The disadvantage to the United States of a Syrian union which might be considered potentially a threat to Israel would be partially counterbalanced, in the short-run at least, by probable increased stability in Syria resulting from unity. If Syro-Iraqi federation occurs and if there is a move to place Iraqi forces on Israel’s frontier with Syria, we should seek actively to discourage it.

8. Lebanon. Lebanon will probably welcome the Iraqi revolution because it will tend to correct the disequilibrium which has existed in the Arab world. Anxiety will result, however, from fear, at least in the shortrun, that her always delicate relations with Syria may be adversely affected.

US Position: We should be prepared to reassure the Lebanese and others that we support an independent Lebanon which we would not be prepared to see subverted from any Arab source.

9. Israel. Israel must regard the Iraqi revolution with concern. While Baghdad might develop as a counterpoise to Cairo, the result, in any case, may be greater Arab unity, which Israel fears.

US Position: While continuing the cordial United States relationship with Israel, we should maintain our stance of even-handed impartiality between Israel and the Arab countries. We should resist any Israeli attempts to formalize or institutionalize a special American-Israeli relationship in the security field which would undermine American-Arab relations. On the other hand, we should make known to the Iraqi Government as we do to the other Arab states our interest in the security and well-being of Israel, its right to exist as a state, and the desirability eventually of finding a road to a permanent peace between the Arabs and Israel. We should encourage Iraq, as well as the other Arabs, to concentrate on development and reform rather than diverting energies and resources to the Arab-Israel conflict.

10. Yemen. The United States has no stake in Yemen per se. Our interest is in averting dominant Soviet or Communist influence in Yemen and use of Yemen as a base by elements hostile to the United Kingdom base in Aden and to the Saudi throne. Iraq is likely to offer the Yemenis an alternative to heavy reliance on either the UAR or the Sino-Soviet Bloc. It seems doubtful that Iraq can do so until UAR forces are withdrawn.

US Position: Since Iraq is likely to be hostile both to the UK in Aden and to the Saudi throne, the United States should do nothing to encourage or assist Iraq to bolster its position in Yemen which is currently based on a small Ba’thist nucleus and ties with Yemenis trained in Iraq. The United States should, at an appropriate time, make known to Iraq its view toward activities in and from Yemen directed at Aden and Saudi Arabia.

Rusk

0. Source: Department of State, Central Files, POL 1 IRAQ–US. Secret. Drafted by Strong and Killgore on February 25; cleared in draft by Knox, Bowling, Nichols (E), Gaud (AID), Morehouse (INR), Connett (S/S), Kearns-Preston (Department of Commerce), and McGhee; and approved by Talbot. Sent to Addis Ababa, Algiers, Amman, Ankara, Athens, Baghdad, Beirut, Belgrade, Bonn, Cairo, Damascus, Jidda, Kabul, Karachi, Khartoum, London, Mogadiscio, Moscow, New Delhi, Nicosia, Paris, Rabat, Rome, Taipei, Taiz, Tehran, Tel Aviv, Tokyo, Tripoli, Tunis, Warsaw, Accra, and Kuwait.
1. Not printed. (Ibid., POL IRAQ–US)