107. Memorandum From Robert W. Komer of the National Security Council Staff to the Assistant Secretary of State for African Affairs (Williams)1
The Moroccan picture seems worrisome and might be worth a look. While we seem to have turned aside for the moment Moroccan fears of an Algerian attack, their Ambassador is just back from Rabat with instructions from King Hassan to persuade us to help bail him out of his financial crisis. Moroccan exchange reserves have fallen off sharply, and the government budget is running a $70 million deficit. Though Morocco’s long-range economic prospects are reasonably bright, the short-run picture is a mess.
Bengelloun will undoubtedly be making a strong pitch to State and AID. Specifically, he’s suggesting that we unblock the $10 million set aside for project loans in the 1963 Kennedy-Hassan aide-memoire in favor of a program loan.
I’m flatly against the Moroccans using us to escape the stabilization medicine the IMF is trying to get them to swallow. However, given Ben Bella’s tendencies next door, we should make some effort to keep Hassan afloat. AID will naturally be reluctant to come up with anything that looks like weakening of our resolve to get out of the budget support business, but there may still be ways to help.
Perhaps if we required the Moroccans first to work out a sound program with the IMF, it might then be worth considering another program loan.
But the big thing is to get these impecunious Moroccans to start helping themselves. We must be able to sell Hassan on amassing political capital by assuming personal leadership in carrying out a stabilization program and then by making the new development program (to be announced next month based on an IBRD study) his own political instrument. Only by getting him really committed can we hope to avoid future cries for bail-outs and get Morocco headed the right way. After all, it’s economic not military weakness that makes Morocco most vulnerable to the Algerian brand of radicalism.
A confluence of events—request for our military help against the Algerian threat, plea for a loan, new development plan, IMF negotiations—makes the time ripe for such advice. Shouldn’t we gin up something here?