Foreign Relations of the United States, 1964–1968, Volume XVIII, Arab-Israeli Dispute, 1964–1967

290. National Intelligence Estimate¹

NIE 36.1–66

Washington, May 19, 1966.

THE OUTLOOK FOR THE UNITED ARAB REPUBLIC

The Problem

To assess the situation of the United Arab Republic and to estimate developments in domestic and foreign affairs over the next few years.

Conclusions

A. Growing economic difficulties, the costly stalemate in Yemen, and other troubles have produced considerable discontent and even some active opposition in the UAR. The regime has responded by overhauling the security apparatus, by searching—unsuccessfully—for some solution in Yemen, by cutting civilian spending, and by stretching out its five year economic plan to seven years.

B. The program of domestic retrenchment, particularly the cuts in civilian consumption, should help in dealing with economic problems, but it will have to be continued for several years to be effective. Foreign exchange earnings will probably be increased by recent important oil discoveries. To meet its economic goals, the UAR has some $1.1 billion in aid pledged by Communist countries and about $500 million promised from various Western sources; it will, however, still need about $2 billion during the Second Plan period (1962–1965), partly in foodstuffs and partly in other types of aid. US willingness to supply PL–480 food will greatly affect the willingness of other Western donors to contribute to Egypt. The UAR’s need for Western aid will be an important but not overriding consideration in its conduct of foreign affairs.

C. We see no better than an even chance of a settlement in Yemen in the next two years or so. Nasser is highly unlikely to accept a humiliating withdrawal. We also believe that he will try to avoid the risks of escalation, though there is some danger of clashes involving UAR and Saudi forces. His most likely course is to retrench militarily, holding the more defensible areas and hoping for some kind of face-saving settlement. In the meantime, antagonism between Nasser and the Saudis is likely to exacerbate inter-Arab relations generally, undermining the detente of the last two years or so.

D. Unless Nasser’s troubles get much more severe than at present, we doubt that his regime will be in serious danger of being replaced. A successful move to do so would require considerable backing from the armed forces; this appears unlikely in the near term. However, unless the government improves its economic performance and manages to revive greater political support, it will become more vulnerable in the long run.

E. US–UAR relations have fluctuated considerably over the years, and present indications are for a downward turn. This results mainly from the reviving antagonism between Nasser and the more pro-Western Arab leaders—particularly Faisal. It is exacerbated by Nasser’s troubles with the British in the Arabian Peninsula, by his resentment at tightened US aid policies toward the UAR, and by his belief that the US is increasing support for his adversaries. It is also encouraged by Soviet gestures toward the UAR.

[Here follows the Discussion portion of the estimate.]

1. Source: Central Intelligence Agency, Job 79–R01012A,ODDI Registry of NIE and SNIE Files. Secret; Controlled Dissem. A table of contents is not printed. According to a note on the cover sheet, the estimate was submitted by Acting Director of Central Intelligence Richard M. Helms, and concurred in by the U.S. Intelligence Board on May 19.