THE PRESIDENT'S DAILY BRIEF 22 DECEMBER 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007629
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: December 22, 1973

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The President's Daily Brief
22 December 1973
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010019-5
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Exempt from general
declassification schedule of ED. 11652
exemption category 513(1),(2),(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
December 22, 1873
PRINCIPAL DEVELOPMENTS
By increasing imports and expanding its domestic
crop, Egypt is trying to accumulate wheat well in
excess of its annual consumption requirement. This
suggests that Cairo wants to be ready for a long
war, if negotiations are not successful. (Page 1),
With Syria absent from Geneva, the Egyptians are
under even greater pressure to achieve quick prog-
ress and to prove to their Arab allies that Cairo
was right in deciding to negotiate. (Page 2)
A close adviser of King Faysal has told Ambassador
Eilts in Cairo that the King would like to ease the
oil embargo, but can do so only if Sadat recommends
it, or if there is "some tangible disengagement" on
the Arab-Israeli fronts. (Page 3)
Saudi Oil Minister Yamani says he will try to keep
the lid on prices at the meeting of Persian Gulf
members of OPEC. He expects to be fighting a lonely
battle, however, and other information suggests his
fears are well-founded. (Page 4)
Indonesia plans to ask the Arabs to end their oil
boycott. The Indonesians will argue that over the
long run the boycott harms poor, developing coun-
tries more than the intended targets. (Page 5)
The current visit to the USSR by the South Vietnam
PRG president has prompted the first high-level
Soviet criticism of US actions with respect to Indo-
china since the Paris agreement. (Page 6)
The Soviets may hope that Latin American countries
will be more willing to buy weapons now that Peru
has publicly acknowledged the purchase of Soviet
tanks. There is no sign, however, that any new
deals are likely soon. (Page 7)
Abu Dhabi has bought 18 more Mirage fighters from
France. (Page 8)
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FOR THE PRESIDENT ONLY
EGYPT
The Egyptians are trying to accumulate wheat
well in excess of their annual consumption require-
ment of 5 million tons. They are requesting delivery
from foreign suppliers before June 30, 1974. If the
contracts already reported and rumored are fulfilled,
imports would total 4 million tons, compared to a
normal annual import requirement of 3 million tons.
Moreover, the wheat-growing area in Egypt is to
be expanded at the expense of the cotton crop. This
will assure expansion of the usual domestic harvest
of 1.5 to 2 million tons.
These efforts suggest that Cairo is prepar-
ing for the contingency of a long war if the Arab-
Israeli negotiations are not successful after about
six months.
With Arab aid money now available and still
higher wheat prices expected, extra Egyptian wheat
purchases would not by themselves be surprising.
Record high cotton prices, however, make the con-
version of cotton lands to wheat a dubious economic
move. In view of the tight international shipping
situation and acute postwar congestion at the port
of Alexandria, the accelerated import delivery re-
quests are difficult to explain except as war con-
tingency preparations.
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FOR THE PRESIDENT ONLY
EGYPT-USSR
With Syria absent from the Geneva peace confer-
ence, Cairo apparently feels under even greater pres-
sure to achieve quick progress and to prove to its
Arab allies that its decision tb negotiate is justi-
fied. Soviet statements may have given the Egyptians
some hope that early results, can be achieved.
Cairo probably worries that pressures from other
Arabs to break off the talks will intensify. Accord-
ingly, Cairo news media are emphasizing that Egypt:
is going to the Conference under the mandate granted
it by the Algiers summit in late November', determined
to adhere with "utter seriousness" to the summit's
demands fortotal Israeli withdrawal and restoration
of Palestinian rights. Foreign Minister Fahmi has
also been instructed, according to one leading Cairo
paper, to make it clear at the conference that Egypt
is seeking an Arab solution, not merely an Egyptian
one, and is as concerned for the return of Syrian
territory as for the Sinai.
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FOR THE PRESIDENT ONLY
SAUDI ARABIA
Kamal Adham, King Faysal's brother-in-law and
senior adviser, discussed a wide range of issues with
Ambassador Blatt in Cairo earlier this week. Although
Adham was not necessarily speaking at Faysal's direc-
tion, he probably reflected the thinking of the King
in many respects.
On the oil embargo, Adham stated that Faysal
would like to find a way of "easing" it. At this
point, however, Adham claims that the King can ease
the embargo only if President Sadat recommends that
he do so, or if there is some tangible disengage-
ment " on the Arab-Israeli fronts. Once either of
these developments occurs the Saudis "will be help-
ful," according to Adham.
King Faysal's sole concern on Jerusalem remains
that in any final settlement the Old City must not be
placed under Israeli sovereignty. Adham indicated
that internationalization of the formerly Jordanian-
held part of Jerusalem might be sufficient.
Faysal is no longer adamant, however, on the re-
turn of the rest of the West Bank to Jordan. In fact,
Adham stressed the King's flexibility on Jordanian-
Palestinian affairs; the King believes the Palestin-
ians should have the option of going "their own way"
or staying with King Husayn.
Regarding Syria, Adham expressed some sympathy
for ?the Israeli view that past Syrian action on the
Golan Heights justified Tel Aviv's belief that Syria
should not get back all of the Heights. Adham in-
dicated that Syria's refusal,to attend the Geneva
conference was linked to Damascus' fear that disclo-
sure of how few Israeli POWs survived in Syria might
so infuriate Israel that disengagement would be im-
possible.
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FOR THE PRESIDENT ONLY
INTERNATIONAL OIL
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Saudi Oil Minister Yamani has told the US Embassy
that he will be the only participant at the meeting of
Persian Gulf members of the Organization of Petroleum
Exporting Countries--which opens today in Tehran--who
will try to keep the lid on prices. He commented that
he would consider he had done a good job if the sales
price of Persian Gulf crude could be kept as low as $6
per barrel--about a 70-percent increase. Yamani said
that recent bids of $16-18 per barrel for government
sales of Iranian and Nigerian oil had inclined other
producers to believe that a tripling or quadrupling of
oil prices could be sustained in today's market.
Yamani's opinion of the intention of other OPEC
members has been confirmed by conversations between
the Shah and Ambassador Helms. According to a mes-
sage from the US Embassy in Tehran, the Shah is seri-
ously considering a proposal that would tie crude
oil prices to costs of alternative sources of energy,
which the Shah estimates are the equivalent of $8-14
per barrel.
Price increases of the magnitude mentioned by
the Shah would have a strong impact on the balance
of payments of oil-consuming nations. Less developed
countries, with little hard currency to spare, would
be seriously affected unless OPEC arranges for the
sale of oil to them under barter agreements.
Skyrocketing oil revenues would mean additional
massive accumulations of foreign exchange for such
countries as Saudi Arabia, Kuwait, and Libya, which
have only limited ability to utilize such an inflow
of capital. This problem could lead them to put
further restrictions on production.
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FOR THE PRESIDENT ONLY
INDONESIA - ARAB STATES
Indonesia plans to petition the Arab states
to end their oil boycott at the Islamic summit meet-
ing scheduled for mid-January in Lahore. Jakarta
will argue that in the long run the boycott harms
the poor, developing countries more than the rich,
industrial ones that are the intended targets.
Although Indonesia is a major exporter of crude
oil itself, it is suffering from sharply increased
import prices for fertilizer and other petrochemical
products and for finished industrial goods like steel.
Industrial states are passing spiraling energy costs
along to their consumers, forcing underdeveloped
states like Indonesia to spend foreign exchange ear-
marked for development projects.
Indonesia's petition is unlikely to affect
decisions on the oil boycott, and may well increase
Arab doubts about the sincerity of Jakarta's support
for the Arab cause. Indonesian leaders think it im-
portant, however, to underline the point that the
boycott is a double-edged sword cutting friend as
well as foe.
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USSR-VIETNAM
South Vietnam PRG president Nguyen Huu Tho's
visit to the USSR has prompted the first high-level
?Soviet criticism of US actions in Indochina since
the Paris agreement. The visit does not appear to
have resulted, ,however, in stronger Soviet support
for the South Vietnamese Communists.
For over a month, Moscow has been taking a
somewhat harder public line on US activity in Indo-
china. The Soviets have repeated Vietnamese Commu-
nist allegations that US military aid to South Viet-
nam has increased and that US military personnel re-
main in South Vietnam in civilian guise.
At a banquet in honor of Tho on December 18,
President Podgorny accused the US of supporting
Saigon's attempts to "sabotage the Paris agreements"
and demanded an end to "provocations." Podgorny
softened his statement with an optimistic allusion
to Secretary Kissinger's meeting with North Vietnam-
ese negotiator Le Duc Tho, and, in pledging support
for the Vietnamese, Podgorny did not go beyond what
the Soviets have said since last January.
The Soviets seemed anxious to give Tho treat-
ment that paralleled what he had received in China,
where he had seen Mao and signed an aid agreement.
In Moscow, Tho had a meeting with party leader
Brezhnev and signed a new economic aid agreement.
Podgorny may have felt that Chinese criticism of the
US during Tho's visit to Peking required a similar
statement from the Soviets.
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PERU USSR
Moscow may hope that Latin American countries
will be less hesitant to buy Russian weapons now
that President Velasco has publicly acknowledged
the purchase of Soviet tanks. The Soviets have also
offered to sell patrol boats to Peru, but this over-
ture is not new; Moscow reportedly offered these as
early as 1970. Peru will probably put off agreeing
to buy other Soviet equipment at least until all the
tanks aredelivered and evaluated.
There is no sign that other Latin American
countries are about to purchase Soviet arms, al-
though one--Ecuador--reportedly has been offered
excellent terms on MIG-21s. Both Ecuador and Peru
have complained that Congressional restrictions on
sales of US arms have forced them to look elsewhere
for their military needs.
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NOTE
Abu Dhabi - France - Pakistan: Abu Dhabi has
bought Mirage jet fighters from France, its second
such purchase in the last two years. The agreement,
signed on December 13, provides for the delivery--
beginning two years from now--of 18 Mirage Ins
valued at an estimated $50-55 million. Abu Dhabi
ordered 14 Mirage 5s in 1972. Three have been'de-
livered and the other 11 are scheduled to arrive in
1974. /
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Top Secret
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