Office of the Historian

258. Memorandum of Conversation1

Washington, July 18, 1967.

With Dr. Alirio A. Parra, Venezuelan Director of Petroleum Economy

I believe Tony Parra has traveled more in Arab countries and has more contacts among the Arab leaders than any other Latin American. He gave me the following information today, for the most part in response to my questions:

  • —Venezuela is naturally taking advantage of the Middle East crisis to maximize its oil revenues, but much of the added income will be absorbed by the bureaucracy. The Government now maintains that 30% of oil revenues go to economic and social development projects, but no one can really trace these funds and it is probably a much smaller percentage. Minister of Finance Benito Paul Losada intends to “sterilize” (I suppose that means segregate) the windfall profits to be used for future contingencies, but other Government officials are already planning to use them in current and expanded programs.
  • —The Iraqis recently asked Venezuela to curtail its petroleum shipments to the West. This was a bi-lateral representation, not made through the Organization of Petroleum Exporting Countries. (Parra left the impression that no other Arab countries had made similar requests.)
  • —But “the Arabs have not learned their lesson.” They plan to resume fighting with Israel as soon as they are armed and ready. They are almost constitutionally incapable of sitting at a conference table with the Israelis.
  • —From the earliest days of the Arab-Israeli crisis, the Saudis openly told the diplomatic corps—including the Venezuelan Ambassador in Jidda—that of course they would permit oil shipments to go to the West, despite the announced embargo. Only the Iraqis are naive enough to believe what the Egyptians tell them and to do what Nasser says.

Robert G. Cox
  1. Source: Johnson Library, National Security File, Files of the NSC Special Committee, Economic [2 of 2]. Confidential. A July 19 covering note from Robert Cox to Nathanial Davis on White House letterhead reads, “For your information.” The cover note also bears Davis’ handwritten notation: “Mr. Bundy, FYI.”↩