408. Telegram From the Embassy in Lebanon to the Department of State1
9598. 1. Met with Pres Helou evening April 18. His main themes were (A) deterioration in Lebanese political stability, (B) necessity for GOL commence economic and social development program despite lack of funds, (C) massive Soviet aid offer to Lebanon, and (D) urgent, almost desperate plea for US assistance.
2. Soviet comprehensive assistance package is major new factor in equation. Offer, which buttresses increased Soviet activity in Lebanon in other fields, includes inter alia (A) Soviet purchase large amounts Lebanese apples and citrus fruits in exchange for Lebanese agreement buy equivalent value of commodities in USSR which now being purchased in third countries. (B) Proposal to construct up to twenty (presumably [Page 800] consumer goods) factories in Lebanese private sector with Soviets agreeing purchase total production. (C) Financing and constructing the usual steel plant. (D) Wide-ranging proposals to finance a variety of GOL development projects, particularly in hydro and electricity generating and distribution projects. (E) Financing and technical assistance in road projects as well as a possible subway system. I feel sure offer also included armament sales proposals although Helou skipped several sections in reading to me from very detailed multi-page Soviet proposal.
3. Helou said he had been sitting on Soviet proposal since March 13 and so far had avoided leaks. He was aware, however, that he was sitting on a timebomb and that leftist groups in the country would ultimately expose existence of Soviet offer in order present maximum embarrassment to GOL. Soviets would also be putting on pressure, perhaps during upcoming visit of Soviet Parliamentary delegation. Soviets had stressed in original presentation that they now involved in large-scale aid to Iran and Turkey and had posed specific question to Lebanon as to whether she intended to act more pro-Western than the CENTO powers. This was important propaganda point in Helou’s mind. Also, he added, Damascus and Cairo would of course join at appropriate time in applying pressure on Lebanon to accept all or part of the Soviet offer, using their own experience as model.
4. Unfortunately, said Helou, he was not immune to such pressures since he had been unable to make progress in moving the GOL’s essential economic and social development schemes off dead center. Despite his determined efforts reduce graft and pare budget, the problem was very simply one of lack of ready funds and ultimately he could not resist attractive offers of external assistance from any sources if there was no other way to respond to the legitimate aspirations of his people. The leftist and radical political forces and leaders within Lebanon were more than ready to take advantage of the government’s inability to act. Since they would be espousing legitimate social causes and economic grievances this was not the kind of situation which he could control by muzzling the press or calling in the security forces to suppress leftist agitation. In any case, he also believed that social progress was essential and he could only chide himself for not having started sooner. (He did not take refuge in the genuine excuse that the Intra Bank crisis was a major set-back to his plans.)
5. Helou emphasized that he was not raising the bugaboo of Soviet assistance in Lebanon to apply leverage on the US. But the simple fact was that he had to have untied credits of the kind represented by US grain sales in order to give him a free hand in financing the most urgent projects (e.g., housing, education, public health, roads) without the further long delay which specific and detailed project planning would [Page 801] involve. Proposed credits from international institutions or from such countries as Kuwait and France, although available, required substantial down payments and too much time to implement. He needed action now. In response to my many remonstrations on the dangers of Soviet economic penetration and my comments on the lack of comparability of Soviet proposals for Lebanon (which gave them strong foothold in economic life of country) as contrasted to Iran (exploitation of petroleum resources which had no other ready market), Helou simply responded that he fully agreed. His main objective was to keep the Soviets out of Lebanon. The pitfalls he clearly understood. What he needed was an alternative course of action which would keep the opposition quiet.
6. Helou then made it clear, in a somber and sometimes impassioned presentation, that his only source of help was from the US. The psychological impact of US assistance was as important as the financial. Without visible US support he could not stave off the pent-up pressures for development and social progress which ultimately would present the left with its golden political opportunity, and as well bring in a Soviet presence. He painted a gloomy picture of the future, and said that his successor would indeed have infinitely worse problems than he, unless something were done quickly to stem the leftward drift of the country. The socialist Arab states were of course already at work, nibbling away at confidence in Lebanon’s free enterprise system.
7. I took the opportunity to make the point that I had been disturbed about the steady deterioration and leftward trend in Lebanon as represented by such events as Lebanese sponsorship of Afro-Asian Writers Conference; the apparent succumbing to outside pressures to make decisions that obviously were not in Lebanese interest; and the inability of the GOL to restrain propaganda attacks in the local press in such obvious matters of self-interest as Sixth Fleet visits. I noted with concern the growing permissiveness with regard to criticism and attack against the US. Helou accepted the criticism and admitted that much of it was apt. The real problem, he reiterated, was that the GOL had been unable to start its development programs. This had brought about a legitimate focus of unrest and loss of confidence in the government which was seized upon by the radical political elements. As he had reminded me many times before, he thought it was in the self-interest of the US to help him create an environment which would reverse this trend and make it possible for the GOL not only to do that which needed doing to develop the country, but also to emphasize the supporting role of the US. It was up to the US, as the stronger partner, to take the initiative to create the ambiance for closer cooperation between Lebanon and the US in all fields.
[Page 802]8. During the course of the conversation I took the opportunity to describe the US grain credit proposals, as set forth in State 173820.2 Helou, while unhappy with high cost (particularly bank guarantee) of CCC credits and the small size of the possible PL–480 component, nonetheless expressed substantial interest in considering any US offer which was “acceptable” even if not clearly “advantageous.” His problem was to get funds, and any funds generated by our credits would be immediately channelled into development projects. He said he would like as large a program as possible, if we could come to agreement. I informed him that I had just discussed the matter with FonMin Hakim and had given him latest information I had. We agreed I would again see Hakim immediately in order to present to GOL in clear terms the nature and conditions of the US proposal.
- Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL LEB. Confidential. Received at 1:51 p.m. Repeated to Amman, Ankara, Cairo, Damascus, Moscow, and Tehran.↩
- Telegram 173820 to Beirut, April 12, instructed the Embassy to present a proposal for CCC credits to the Lebanese Government and to explain what Washington officials anticipated discussing in May a prospective P.L. 480 proposal for fiscal year 1968. (Ibid., AID (US) 15–11 LEB)↩