ARAB THREATS AGAINST US INTERESTS: MORE BARK THAN BITE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001100130104-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 11
• Document Creation Date: December 21, 2016
• Document Release Date: November 18, 2008
• Sequence Number: 104
• Publication Date: October 18, 1972
• Content Type: IM

Cnnfidential
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Arab Threats Against US Interests: More Bark Than Bite
DO!JMfT SZIIRES LANCH
FL 160 NOT DESTROY
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Confidential
88
18 October 1972
No. 2078/72
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C ON'FTTlrN'TT A r
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligorce
18 October 1972
INTELLIGENCE MEMORANDUM
Arab Threats Against US Interests:
More Bark Than Bite
Anti-Americanism in the Arab world takes many
forms. The Arab boycott of firms doing business
with Israel has adversely affected US interests.
US personnel are at times subjected to harassment,
US oil interests are the targets of threat and
hostile action, anti-American leaflets are fre-
quently circulated, and a steady stream of criticism
of US policies and action emanates from a number
of Arab sources. Virtually-all US interests in the
Middle East have at one time or another been the
target of hostile word or action.
Washington's military and political support
for Israel has generated t'r., bulk of anti-US ac-
tivity among Arabs, but other factors have also
worked against US interests. The large investments
of US oil companies in the Middle East have evoked
charges of exploitation of Arab resources. While
sporadic action will be taken against the US, Arab
factionalism has prevented coordirr.ited moves in the
past and will probably prevent such moves in the
future.
Note: This memorandum was prepared by the Office
of Current Intelligence and coordinated within the
Central Intelligence Agency.
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The Arab Boycott of Israel
One of the molt successful, although still
limited, actions by the Arab League has been its
trade boycott against Western firms doing business
with Israel. In 1945 the Arab League Council re-
solved that Arabs should refuse to purchase pro-
ducts from Jewish firms in Palestine. After the
first Arab-Israeli war, the league attempted to
organize an extensive economic, financial, and
diplomatic boycott of Israel. in 1951 a broad
range of targets were added to the original list,
including, among others, firms that have branch
factories, assembly plants, agencies, or main of-
fices in Israel, firms that purchase shares in
Israeli business ventures, shipping firms with
ships calling at both 1..Laeli and Arab ports on
the same trip, and ships that carry oil or goods
with a war potential. In practice, firm: and in-
dividuals are boycotted either for violation of
the commercial aspects of the regulations, or for
"pro-Zionist" activities. Companies may also be
subject to boycott if they fail to respond to
queries from the League's boycott office. Sears,
Roebuck and Company lost sales in Saudi Arabia
when it failed to reply to a request of the boy-
cott office for information.
The boycott eventually touched a large number
of US firms, resulting in financial losses for US
business. In 1967 about 200 of some 700 firms on
the boycott list were American. While precise
figures are not available, in Saudi Arabia alone
it was estimated in 1968 that individual US firms
lost $25 million annually in export sales and con-
tract opportunities as a result of the boycott.
Only a small portion of this business was picked
up by US firms not on the list. Losses in other
Arab countries, although -probably somewhat smaller,
are doubtless considerable. Ti-, Egypt, Coca Cola
lost the best potential market in the area; the
company's sales there in 1965 stood at $1.77 million.
All the Arab states publicly express strong
support for the boycott, and this has been one of
the areas where Arab cooperation is strongest.
Still, the degree of enforcement varies from coun-
try to country, so the boycott has been far from
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CONFTllin,MTr A -r
total. Arab rivalries frequently prevent full co-
operation; for example, when the Arab League ap-
pointed an Egyptian to head the boycott office in
1963, Syria refused to receive him.
National self-interest has served to reduce
the effectiveness of the Arab boycott. Blacklisted
firms are tolerated if their products are badly
needed or, in some instances, if they generate
soz:ely needed foreign exchange. The Egyptian Gov-
ernment has on occasion considered contract bids
from boycotted firms. In 1968, RCA, although on
the boycott list, was invited to bid on a communi-
cation project. 'yria, in 1965, lifted the ban on
the importation from blacklisted firms of spare
parts required for the repair and maintenance of
industrial machinery and power plants. Inconsistent
enforcement practices are fairly common. In 1966,
Frank Sinatra films were banned in Lebanon because
of his alleged pro-Zionist activities, but his re-
cordings were freely available. In mid-1972 a
consignment of Willys Jeeps was reportedly sent to
Beirut for the guerrilla organization, Fatah, by a
Palestinian aid association in Morocco. The Willys
Company is on the Arab blacklist, but the fedayeen
prevailed upon Lebanese authorities to allow the
jeeps to pass in transit to Syria for Fatah's use
there.
The boycott list is revised at semi-annual
conferences of Arab boycott officers. At these
meetings, which are held in various Arab capitals;
the officers discuss such matters as the ini ;ensific'a-
tion of the boycott, the removal of names from the
blacklist, and the addition of others. Action
against firms or persons on the list is left to the
individual Arab countries.
The extension of a comprehensive boycott to
include all US goods and services in the Arab worlu
appears to be highly unlikely at this time. Such
an attempt would meet the same obstacles that have
reduied the effectiveness of the present boycott.
Even in times of great emotionalism in the Middle
East, anti-US activity has been intensified only
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temporarily and sporadically. In Kuwait, for ex-
ample, there were calls for a total ban on the im-
portation of US goods following the 1967 Arab defeat.
There was little public enthusiasm for such action,
and the Kuwaiti Goirernment privately indicated that
it did not support the idea. States like Kuwait,
Jordan, Lebcnon, Saudi Arabia, and the Sudan can be
expected to continue to balk at suggestions that
anti-US boycott measures be extended.
Oil as a Weapon
0.4.1 is the most important US interest in the
Arab world. The book value of US oil company in-
vestments in the Middle East (including Iran) and
North Africa exsfeeds $2.5 billion; in terms of
earning potential or replacement cost, the real
value is several times as high. Only some five
percent of US oil consumption comes from the Arab
world, but that figure is expected to rise sharply
in the next decade. The Arabs are well aware of
the importance of their petroleum resources to the
US and its allies, and the issue of using this as-
set as a means of pressuring the US to reduce its
support for Israel is raised from time to time.
Talk of more stringent economic measures against
the US increases in proportion to Arab frustrations.
These frustrations rose in the absence of any move-
ment toward resolving the stalemate with Israel and
stimulated a fresh wave of discussion of the oil
option during the past year. In January 1972, Egyp-
tian Foreign Minister Riad, while on a tour of the
Persian Gulf, reportedly discussed the use of Arab
oil as a weapon against the US. In support of Riad's
effort, a prominent Egyptian oil expert called for
greater Arab participation in American petroleum
enterprises and demanded an additional surcharge
on American petroleum companies as long as the US
continued its present policies in the Middle East.
In recent months the Egyptian propaganda ap-
paratus has intensified its verbal attacks on US
interests in the Middle East and has called for a
boycott of US oil assets in the area. The primary
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state in the Arab confrontation with Israel, Egypt,
has often taken the lead in issuing such calls. Un-
able to force Israel to come to terms, Egypt would
like to get at Tel Aviv through threats against US
interests. Despite its leading role, Cairo has not
taken serious steps against US oil firms in Egypt
itself in recent years. It probably realizes that
isolated actions against the relatively small US
enterprises in Egypt would not be effective. More-
over, Cairo badly needs the foreign exchange gen-
erated by the US firms in Egypt and in the countries
(Saudi Arabia, Libya, and Kuwait) now subsidizing
Egypt.
Egyptian suggestions of action against US oil
interests were, as usual, received cooly by the
larger oil producers of the Persian Gulf and the
Arabian Peninsula. Kuwait told Riad in January
that it would approve of Egypt's proposals provided
they took the form of collective action by all Arab
oil-producing countries, a fairly safe commitment.
King Faysal dismissed a similar suggestion in August,
saying that such action would not affect America and
would harm the Arab effort against Israel. Saudi
Arabia's recent offer of a special relationship with
the US in the field of petroleum indicates that Jidda
will not participate in extreme moves against US oil
interests as long as the present regime remains in
power in Saudi Arabia. Most other oil producing
countries in the Persian Gulf are likely to be
equally unreceptive to suggestions of an oil boy-
cott against the US. As long as the larger pro-
ducers, such as Saudi Arabia and Kuwait, resist
pressure for a boycott, the smaller ones will prob-
ably follow suit.
Some Arab countries have exhibited a greater
willingness to employ petroleum as a weapon. Iraq
nationalized the partly US-owned Iraq Petroleum
Company, but its failure to nationalize all Western-
owned oil interests indicates that it is reluctant
to assume the risks of running its oil industry and
marketing its oil alone. Baghdad's take-over of the
Iraq Petroleum Company is difficult to explain in
economic terms; it appears to have been at least
partly inspired by a strong element of nationalism.
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Syria has on occasion exploited the presence of
the pipelines running across its territory, either
for political or for financial reasons. Damascus
recently associated itself with Iraq's nationali-
zation measures by nationalizing the pipeline from
Iraq that crosses its territory. Tapline, running
from Saudi Arabia to Lebanon, crosses Syrian ter-
ritory and could be closed in support of a general
boycott of the US.
Libya, too, has created an uneasy climate for
the oil community. All oil firms have been sub-
jected to operational and bureaucratic harassment,
and substantial reductions have been ordered in
the production quotas of all companies. President
Qadhafi's diatribes on the utility of economic
weapons indicate that in the extreme he might con-
sider even harsher actions. If Qadhaf. intends to
undertake large financial commitments to Egypt,
however, he cannot afford seriously to curtail oil
revenues. Libya's financial reserves have stopped
growing, oil production is declining, and even under
present circumstances a substantial new commitment
to Cairo would reduce Libya's flexibility in dealing
with US and other petroleum firms.
In the absence of a new and powerful rallying
point for the Arabs, attempts to end dealings with
American oil interests in the Middle East are likely
to fall far short of being effective. Competition
resulting from the large number of independent pro-
ducer countries and the differing ideological out-
looks minimize the possibility of either a selective
embargo against the US or widespread nationalization.
Moreover, the Arabs are aware that selective embar-
goes are unlikely to be effective either and that
they have almost as much to lose from a complete
embargo as their customers, particularly in the
longer run. In some countries oil income contrib-
utes more than half of the GNP, and throughout the
area the foreign oil firms provide valuable services
that would be difficult to replace.
During the emotion-charged period of the 1967
Arab-Israeli War, Arab oil shipments to the US and
other selected Western countries were halted, but
holes in the petroleum embargo soon appeared and
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within four months the ban, for all practical pur-
poses, had disappeared. isolated anti-US gestures
will continue to come from countries such as Libya,
and talk of'stronger measures will be heard, but a
total Arab petroleum boycott against the US is un-
likely. A coordinated limitation of production also
appears unlikely; to be effective, it would require
widespread Arab solidarity, and many Arab oil pro-
ducers are as reluctant to take limited action
against the US as they are more drastic steps.
Other Harassment
Over the years US diplomatic installations in
the Arab World have been stoned, bombed, sacked, and
burned. Incidents of this nature will almost cer-
tainly _.ontinue. Egypt and Libya ordered a reduc-
tion in the size of US diplomatic missions in the
two capitals this summer. US personnel could be
subjected to increased Arab harassment, such as
that recently experienced in Syria by the Assistant
US Defense Attache to Jordan. The US military pres-
ence in the Middle East is small and generally un-
obtrusive. Although the military training mission
in Saudi Arabia has been virtually ignored by radi-
cal Arabs, the US naval facility on Bahrain has been
the target of Arab, propaganda. US installations in
Morocco are the subject of unfavorable publicity.
This sort of pressure could well intensify. Any of
these facilities or the personnel associated with
them could be the target of random terrorism--e.g.,
letter bombs or a hand grenade--by local dissidents
or Palestinian guerrillas.
Arab trade union groups have periodically dis-
cussed how best to strike at those who "serve the
interests of international imperialism and support
the Israeli enemy." The latest meeting of the In-
ternational Confederation of Arab Trade Unions was
perhaps typical of their gatherings. There was
plenty of wrangling even though delegations from
a number of states failed to attend. During its
meeting, the organization reportedly voted to dis-
affiliatc labor federations from Jordan, Yemen
(Sans), and the Sudan. Although thx=~~ meeting ex-
amined ways in which the unions could participate
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more effeC4::ively in the battle against the suppor
ers of Israel, primarily the US, the delegates co
agree only on generalities and put off any specif
action until the matter could be studied further.
It seems unlikely that the Arab labor confed
tion will be able to agree on significant common
tion against US interests in the near future. On
the other hand, Arab labor activists could engage
in sporadic unilateral harassment tactids;: Some
individual unions refused to handle goods from th
US during and immediately following the 1967 war,
but American products were flowing normally withi
a short time. Arab petroleum and transportation
workers are particularly well placed to interfere
with US businesses and night be encouraged to act
by Arab governments such as Egypt, Iraq, or Libya
Arab terrorist attacks on US-owned facilitie
or US personnel in the Middle East or elsewhere
likely . Palestinian guerrilla organizations have
d
threatened reprisals against Americans and woul
probably take the lead. Some Arab governments ma
h
encourage such activity, but even wit out encoura
ment the potential dangers posed by fanatic Pales
i i i
tinian factions are great. US-owned oil faciliti
are robabl the most tempting targets. Tapline,
p Y
which carries Saudi Arabian crude to the Mediter-
ranean and to Jordan's small refinery, has been
sabotaged on a number of. occasions and could well
be a ain. US airliners have also been subjected
to Arab terrorist action; for example, two US-own
aircraft were hijacked and subsequently destroyed
by Arab terrorists in 1970. A repeat is always
possible.
Conclusions
g p
In the absence of progress toward a settleme
of the Arab-Israeli deadlock, anti-US sentiment a
the Arabs is likely to continue to manifest itsel
in a variety of ways in the coming years. Propag
attacks will continue and perhaps get worse. Spo
harassment, including kidnaping attempts against
personnel and attacks on US facilities may occur.
More stringent measures may be taken against US o
interests by one or two Arab countries. A more c
ordinated ex ression of anti-Americanism, however
P
will probably founder on the same intrinsic diffi
h
culties of Arab self-interest and factionalism t
have intruded in the past.
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