WASHINGTON (Jul. 31)
Assistant Secretary of State Frederick G. Dutton, seeking to justify the increased American assistance to the United Arab Republic, today said that “aid to the UAR in fiscal year 1962 was about $5.50 per capita, and to Israel about $34 per capita.”
The State Department official advanced this argument in a letter to Senator Kenneth B. Keating, New York Republican, who had raised a question about the propriety of American financial aid to the United Arab Republic, in view of Nasser’s purchases of Soviet jet bombers, fighter planes and other modern munitions.
“The State Department’s studies show there is no significant correlation between United States aid and UAR’s arms purchases,” Mr. Dutton said. “The UAR’s international payments problems are found in its lack of sufficient free world convertible currencies. In contrast, the UAR has substantial development and current payments resources with the Soviet bloc, mainly because the bloc provides the market for large quantities of the UAR’s principal export commodity, cotton, which cannot be sold in the free world at reasonable prices,”
He explained that the U.S. aid program, including stabilization loans, were designed to meet President Nasser’s “temporary critical shortage of convertible currencies.” Three-quarters of American aid, $221,300,000 in commodity shipments, represented only surplus food, said Mr. Dutton.
He justified the Egyptian-Soviet arms trade by saying that there was no market in the West for Egyptian cotton “at reasonable prices” and that “were the U.S. now to cease aid, the UAR’s ability to purchase arms would not be substantially affected.”