91. Memorandum From the Executive Secretary of the Special Committee of the National Security Council (Bundy) to the Under Secretary of State (Katzenbach)1
SUBJECT
- Rebuilding our Position in Libya
As I think about unexpected willingness of the new Libyan government to rebuild some kind of relationship with us, it occurs to me that we face an opportunity here that reaches beyond Libya itself and even beyond the current Middle East crisis.
My life at the Ford Foundation2 has taught me a little about the difficulty of maintaining our position in countries where AID has legitimately phased out. Now I understand that after a decade and some $200 million worth of aid, the last American technicians are about to pull out of Libya (a) because they are more expensive and the USG has no way of topping off salaries the Libyan Government will pay to cheaper European advisers and (b) because the USG has no really responsive mechanism for pulling together the kind of technical assistance the Libyans need now.
Having invested so much, we will look ridiculous if our technicians must give way to Europeans in the Libyan ministries just at a time when they would be in a position to direct commercial purchases toward US suppliers, and at a time when the Libyan ministries are still so much in formative stage. Libya’s income has matured far beyond the government’s ability to use it. Consequently, AID has phased out too soon, in terms of overall US interests, even though on economic and Congressional grounds, it has done the logical thing.
I am wondering therefore whether in the context of the Middle East crisis we could not find quickly some way to put together a small fund of up to $300,000 to underwrite the gradual return of a few technicians during the critical period ahead. I realize this is being considered in our contingency planning for Libya and that it gives AID problems. However, this seems important enough to be worth an experimental shot. (The idea also has implications elsewhere—as in Iran.)
As I understand it, there is no way AID can do this with existing funds. I suppose the only quick way to manage this, therefore, is a quick [Page 136] trip to Congress to try to write it into the new aid bill. I know Bill Gaud would worry that Congress would simply earmark some of his current depleted funds for this purpose. This is a real danger which we should consider, but I don’t think it is sufficient to dismiss the idea. Could you give me a ring if you feel we ought to do something about this.
- Source: Department of State, Central Files, POL LIBYA–US. Secret.↩
- McGeorge Bundy was the President’s Special Assistant for National Security Affairs until February 28, 1966, after which he became President of the Ford Foundation. From June until August 1967, he served as Executive Secretary of the Special Committee of the National Security Council.↩