The Economic Diplomacy of the Suez Crisis

The Economic Diplomacy of the Suez Crisis

Diane B. Kunz
Copyright Date: 1991
Pages: 312
https://www.jstor.org/stable/10.5149/9780807862698_kunz
  • Cite this Item
  • Book Info
    The Economic Diplomacy of the Suez Crisis
    Book Description:

    Diane Kunz describes here how the United States employed economic diplomacy to affect relations among states during the Suez Crisis of 1956-57. Using political and financial archival material from the United States and Great Britain, and drawing from personal interviews with many of the key players, Kunz focuses on how economic diplomacy determined the course of events during the crisis from start to finish. In doing so, she provides both an excellent case study of the role of economic sanctions in international relations and a solid treatment of the American use of such sanctions against a Middle Eastern country.The crisis was prompted by the Eisenhower administration's decision not to fund the Aswan High Dam, triggering the takeover of the Suez Canal Company by Egyptian President Gamal Abdel Nasser. Responding to events, the American government imposed economic sanctions against Great Britain, France, Egypt, and Israel, with varying degrees of success.Because of its weakened financial position and misguided decisions, Kunz says, the government of British Prime Minister Anthony Eden proved most vulnerable to these tactics. Indeed, American economic pressure caused the British government to withdraw its troops ignominiously from Egypt. France, on the other hand, had borrowed sufficiently prior to the crisis to be able to withstand American pressure. For Israel, Kunz says, the threat of sanctions symbolized the Eisenhower administration's wrath. Israel could forego American funds, but, dependent on the goodwill of a great power for survival, it could not take a stand that would completely alienate the United States. Only Egypt proved immune to financial warfare.Kunz also illuminates the general diplomacy of the Suez crisis. The American government was determined neither to alienate moderate Arab opinion nor to become too closely intertwined with Israel. As such, this account has significant lessons for American policy.A UNC Press Enduring Edition -- UNC Press Enduring Editions use the latest in digital technology to make available again books from our distinguished backlist that were previously out of print. These editions are published unaltered from the original, and are presented in affordable paperback formats, bringing readers both historical and cultural value.

    eISBN: 978-0-8078-3794-8
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. ACKNOWLEDGMENTS
    (pp. xi-xiv)
    Diane B. Kunz
  4. INTRODUCTION: THE SINEWS OF WAR?
    (pp. 1-5)

    The Suez crisis of 1956–57 remains one of the most interesting episodes in twentieth-century history. When President Gamal Abdel Nasser of Egypt nationalized the Suez Canal on July 26, 1956, he kindled a crisis that exposed the new realities of the postwar world. No longer could imperial powers such as Britain and France force a Middle Eastern nation to do their bidding through force of arms. The British government and people reluctantly confronted the fact that Britain had slipped from the first rank of powers. In the wake of the Suez crisis the United States, which had been using...

  5. ONE SPECIAL RELATIONSHIPS 1945–1954
    (pp. 6-35)

    Two special relationships influenced the course of American economic diplomacy during the Suez crisis. The effect of Britain’s declining financial position and its increasing economic dependence on the United States cast the mold in which Anglo-American policy during the crisis would be made. The record of Middle Eastern diplomacy established by Britain, long the dominant colonial power in the region, and the United States, now the leader of the free world, proved equally important. As George Kennan has said, “Every mistake is in a sense the product of all the mistakes that have gone before it.”¹

    The 1950s represented the...

  6. TWO PLAYING THE GAME NOVEMBER 1954–DECEMBER 17, 1955
    (pp. 36-57)

    During 1955 the British government, eager to improve its relations with Egypt, increasingly focused on the financing of the Aswan High Dam as an important weapon in its battle to win Egypt’s President Gamal Abdel Nasser. Unable to afford such a massive expenditure alone, the British government importuned the United States to provide the lion’s share of the funds. The Eisenhower administration was willing to consider the project because it agreed with the British government that Nasser was important to the Middle Eastern balance of power and central to the achievement of an Arab-Israeli settlement. The allies moved slowly, but...

  7. THREE THE STICK, NOT THE CARROT DECEMBER 17, 1955–JULY 26, 1956
    (pp. 58-72)

    The promise presented by the successful December 1955 negotiations for the Aswan High Dam financing soon evaporated. In March 1956 Britain and the United States decided to substitute the stick for the carrot in their dealings with Egypt. Thereafter, relations deteriorated until the British and American governments decided not to fund the Aswan Dam. No announcement was made until Nasser brought matters to a head by sending his ambassador to Washington to sign the loan documentation. For a combination of domestic and foreign policy motives, Dulles, with British acquiescence, decided not to “play it long” and bluntly told Ambassador Ahmed...

  8. FOUR SAVING THE NATION JULY 26–SEPTEMBER 5, 1956
    (pp. 73-94)

    Nasser’s surprise nationalization of the shares of the Suez Canal Company on July 26, 1956, exactly one week after Dulles’s announcement that the United States would not fund the Aswan High Dam, struck Britain and France with the impact of an armed attack. The next day the British government, joined by the French, which had its own reasons for taking a truculent position, began planning military and other measures against Nasser. Simultaneously the Eisenhower administration started a three-month campaign to restrain its European allies from using force against Egypt. As its vehicle the American government used the London Conference of...

  9. FIVE A FATAL MISTAKE SEPTEMBER 5–OCTOBER 29, 1956
    (pp. 95-115)

    The failure of the Menzies mission led to a second Dulles initiative: the Suez Canal Users’ Association (SCUA). Premised on the belief that Nasser’s government could not run the canal, its rationale was torpedoed when, after a walkout of European pilots on September 13, the Egyptian canal authority successfully operated the conduit. The British and French governments now appealed to the United Nations. For a time the October 1956 negotiations among the British, French, and Egyptian delegates held under United Nations auspices appeared to be making considerable progress. However, the Eden and Mollet governments refused to accept a pacific solution...

  10. SIX USING FORCE OCTOBER 29–DECEMBER 4, 1956
    (pp. 116-152)

    The Israeli invasion of the Sinai on October 29 dealt a devastating blow to the administration’s Middle Eastern policy. Eisenhower and his colleagues decided almost immediately that with or without the support of the British and French governments, the United States would bring the matter before the United Nations Security Council. On October 31, as it became clear that London and Paris backed the Israeli action, a furious Eisenhower administration, blocked at the Security Council by British and French vetoes, took the issue to the General Assembly. With American encouragement, the world body passed a resolution condemning the invasion by...

  11. SEVEN THE AMERICAN WAY DECEMBER 4, 1956–MARCH 23, 1957
    (pp. 153-185)

    With the agreement on Anglo-French troop withdrawal, the American government began to mend its relations with its errant allies. Simultaneously, President Eisenhower and his colleagues drafted the Middle Eastern initiative soon to be known as the Eisenhower Doctrine. The administration intended to take advantage of the opportunity presented by recent events in the Middle East to restructure Arab-American relations. To keep up the momentum, the administration forced the Israeli government to withdraw its troops behind the 1949 armistice lines. During March, the Israeli army completed its evacuation as an Anglo-American summit meeting concluded in an atmosphere of mutual praise. With...

  12. EIGHT CONCLUSION THE IMPORTANCE OF HAVING MONEY
    (pp. 186-194)

    The Suez crisis did not so much end as fade away. On April 8, 1957, the Suez Canal, totally under Egyptian control, reopened to shipping. One month later the British government announced that it would permit British ships to pay dues to the Egyptian canal authority and use the canal. Thereafter, Western governments continued their attempt to impose some form of international control over the water-way. Nasser rejected all such efforts until, at year’s end, British, French, and American diplomats conceded the futility of their endeavors and accepted Nasser’s complete control over the canal.

    Concurrently British and Egyptian negotiators began...

  13. APPENDIX A: THE ANGLO-AMERICAN FINANCIAL AGREEMENT
    (pp. 195-196)
  14. APPENDIX B: THE TRIPARTITE DECLARATION, MAY 25, 1950
    (pp. 197-198)
  15. APPENDIX C: INFORMATION CONCERNING THE SUPPLY OF MIDDLE EASTERN OIL IN 1956
    (pp. 199-201)
  16. APPENDIX D: PRINCIPAL ASPECTS OF THE ANGLO-AMERICAN OFFERS TO FUND THE ASWAN HIGH DAM DECEMBER 1955
    (pp. 202-203)
  17. APPENDIX E: STERLING ASSETS
    (pp. 204-206)
  18. NOTES
    (pp. 207-280)
  19. SELECT BIBLIOGRAPHY
    (pp. 281-288)
  20. INDEX
    (pp. 289-295)