Mr. Chaput has asked for the views of the European Division on the policy which Canada should adopt on the question of assistance to Palestine Arab refugees, which is to come up for consideration during the ninth session of the UN General Assembly.

2. Last March, when Canada's contribution to UNRWA was announced, the Canadian Permanent Representative was instructed to tell the Chairman of the Negotiating Committee that future contributions from the Canadian Government would be dependent upon the progress made toward a final solution of the Palestine refugee problem. ⁴⁷

3. In Jordan, where the main body of refugees is congregated, a certain number have been absorbed during the past year in agriculture and in business enterprises. Some of these had obtained loans from the Jordanian Government under an aid programme suggested by British officials. Others were able to get off to a fresh start because they had just recovered savings frozen for the past five years in Israeli banks. Still others have managed to find work in oilfields of neighbouring countries. Every such instance of self-help has been welcomed as a sign that six years of abnormal living conditions have not entirely destroyed the self-respect of refugees. These individual cases of rehabilitation, however, have not appreciably affected the main refugee problem, encouraging though they may be in themselves.

4. After allowing UNRWA to operate for over a year without a Director, the Secretary-General of the United Nations finally found in Mr. Henry Labouisse a man whom he considered capable of taking charge of the Agency effectively. In the period since March 1, 1953, when Mr. Blandford left, the administration has been carried on on a provisional basis. Various administrative experiments have been introduced, and some of them discarded. It would have been surprising if some ground had not been lost, since in a situation where so many conflicts of interest are involved, continuous and effective United Nations leadership is an essential. Now that a Director has been appointed, the United Nations component in the joint enterprise should be ready once more to play the part allotted to it in the fields of planning, diplomacy and administration.

5. Of two main projects for large-scale refugee resettlement (in the Sinai Peninsula and on lands in Syria and Jordan to be supplied with water and power from the Yarmuk-Jordan Basin) we understand that the former has continued according to plan. There seems to have been no interruption of the preparatory work required for the resettlement of 50,000 refugee families in the Sinai Peninsula on lands to be irrigated by water drawn from the Nile Valley. The very much larger Yarmuk development scheme, to which both Syria and Jordan agreed some time ago, has been held up this year, however, as a result of a train of events set off last September when Israel began canal-digging operations to divert the water of the Jordan River without the agreement of its neighbours. The Security Council dealt with aspects of Israel's action which related to non-observance of the armistice agreement. Meanwhile the United States Government decided the time had come to try to secure a rational plan for the exploitation of all the meagre water resources of the area in the interests of the four countries concerned - namely, Jordan, Israel, Syria and Lebanon. It sent Mr. Eric Johnston to sound out the various governments on the possibility of an agreed programme of development of the Yarmuk-Jordan Basin. Although Mr. Johnston arrived when feelings were highly inflamed over the Qibiya affair, and although neither Israel nor the Arab states would at first accept the principles he suggested, he persuaded them not to reject his proposals without further thought. He pursued the subject with them later and was able in June of the present year to report that all four governments had agreed to the principle of unified development of the Jordan-Yarmuk Basin and an equitable and mutually acceptable division of its waters, to be controlled by an impartial international authority. This agreement in principle represents the first break in the mutually uncompromising attitudes of Israel and its neighbours. Although it has meant that work on the Yarmuk development scheme sponsored by UNRWA has had to be held up pending the outcome of negotiations between Mr. Johnston and the four governments, the fact that an agreement in principle has been reached for the first time on a substantial issue dividing Israel from its neighbours is considered to be of greater importance in the long run, and represents greater progress toward a final settlement of issues outstanding between the parties to the Palestine conflict than was considered possible last autumn.

6. For UNRWA the agreement on certain principles obtained by Mr. Johnston seems to mean three things:

(a) There will be an additional delay before the refugees can be settled, since the Yarmuk plan cannot be put into effect until details of the unified development plan have been worked out.

(b) The unified development plan may be financed by bank loans and private investment rather than by international contributions through the United Nations, although this is not yet certain.

(c) In the meantime the refugees will continue to need relief on a scale which the Arab states will not be able to meet, although they may be expected to continue to provide aid on the present scale.

7. In considering whether Canada should or should not contribute this year to the relief, as distinguished from the rehabilitation, of Palestine refugees, the following points should perhaps be kept in mind.

8. There is an alternative to relief which UNRWA has never suggested because it would be beyond its competence to do so. This would be more just, perhaps, than the existing arrangement and therefore preferable to the operation in which we are at present engaged. The alternative would be to cut off all international relief for Arab refugees after providing Israel with a long-term loan with which to pay them the compensation which is their due. The two chief obstacles to suggesting this course of action at the ninth session of the General Assembly, however, are that there is no agreement yet on the amount of compensation owed by Israel, although Israel has repeatedly said that it will meet its obligations in this respect, and the total is likely to be very much greater than anything the United Nations would be called on to contribute in the way of relief over a considerable number of years. The initiative in suggesting a proper scale of compensation for Arab refugees lies with the Palestine Conciliation Commission, and Israel has shown a marked disinclination to have that body take up the matter actively. In the circumstances this proposal is not likely to be made at the ninth session of the Assembly, although if the way were properly prepared for it we do not see why it should not be suggested at the tenth session.

9. For the following reasons we would recommend that Canadian contributions to the relief programme should continue:

(a) Relief, even on the very limited scale of 3¢ a day, has hitherto prevented the refugees from getting out of hand. This is not a large price to pay for absence of general conflict.

(b) There is no reason to suppose that the refugees will be tempted to make serious trouble in the future if the present scale of relief continues.

Should they feel themselves abandoned, however, by governments which took an active interest in the partition of Palestine and have been trying since 1948 to maintain a just balance between the parties to the Palestine conflict, the revulsion of feeling might be expected to assume grave proportions.

(c) Canada has given renewed proof of its desire to help ease the tensions in the area by making available the services of General Burns as Chief of Staff of the UN Truce Supervision Organization and sending four officers to serve as military observers. It is also preparing to open diplomatic missions in Tel Aviv, Cairo and Beirut with a view to establishing closer bonds of friendship with the peoples of that area. It would be inconsistent with this policy to leave the entire burden of refugee relief to others, particularly since withdrawal from the operation would be likely to place fresh obstacles in the way of General Burns' success at a time when he is already burdened with serious difficulties. It would also get Canada's three new diplomatic missions in the area off to an unfortunate start. (It must be remembered that international relief for Palestine Arab refugees is beneficial to Israel as well as to the refugees themselves since it relieves Israel of pressure to pay refugees the compensation which is due them and prevents infiltration of Arab refugees into Israel on a very much greater scale than already exists.)

10. It seems to the European Division that we should be in a position to maintain that there is good reason for Canada to continue to participate in the UN programme for relief of Palestine Arab refugees in view of:

(a) the progress made during recent months toward securing Arab-Israel cooperation in the development of water resources of the area which should reduce existing tensions and provide a more secure basis for resettlement of displaced persons;

(b) the recent appointment of Mr. Labouisse as Director of UNRWA;

(c) the uninterrupted work on the Sinai project.

R.A.D. FORD