790D.5 MSP/6–2254
Memorandum of Conversation, by the Officer in Charge, Economic Affairs, Office of South Asian Affairs ( Fluker )
Subject:
- Pakistan’s Need for Additional United States Aid
Participants:
- Sir Zafrulla Khan, Pakistan Foreign Minister
- The Honorable Amjad Ali, Ambassador of Pakistan
- Governor Stassen, Foreign Operations Administrator
- Mr. Norman Paul, Foreign Operations Administration
- Mr. Donald Stoops, Foreign Operations Administration
- SOA—Mr. Fluker
Sir Zafrulla and the Ambassador called upon Governor Stassen at their request.
Immediately upon taking his chair in Governor Stassen’s office, Sir Zafrulla launched an animated and well-organized presentation of Pakistan’s needs for additional U.S. aid. He stated that while he unfortunately seemed to have a request to make of the United States each time he came to Washington, it was Pakistan’s belief that the “beggar’s bowl” should never be concealed. He said that he and his country adhered to what he considered to be the European principle reflected in the story of the lady who wished to have her portrait done by a prominent portrait artist in Europe and who specified in advance that the artist’s rendition must do her full justice. The artist in Sir Zafrulla’s story replied, “Madam, what you need is not justice but mercy.”
Sir Zafrulla lugubriously noted his Government’s fault in not anticipating the difficulties in East Bengal. He cited the good fortune of Pakistan’s present “constitution” which provided for Governor’s rule and, therefore, permitted the dispatch of General Mirza to East Bengal. He stated that Mirza had managed to contain this most explosive situation and, during this period of the recent past, every twenty-four hours of such containment had been a gain for Pakistan. He said now that Mirza had accomplished this immediate task of damping the fuse on the bomb that was East Bengal, there remained the even greater task of development—which would require U.S. aid. Sir Zafrulla noted that Pakistan faced an acute shortage of foreign exchange which led to the need of U.S. aid in the amount of perhaps $100 million in the coming year, perhaps $70 million the following year and—in a low voice—perhaps dropping to $30 million in later years. Sir Zafrulla said that a special “council” within the Pakistan Government was working with the Embassy and the FOA Mission in Karachi in [Page 1850] analyzing the situation, and expressed the hope that a special analyst of top ability would be assigned to work on the problem in Washington, implying by a wave of the hand toward the Ambassador that the analyst might work with Amjad Ali. In passing, Sir Zafrulla commented that U.S. stocks of surplus commodities might be of use in helping Pakistan through this period of crisis.
Governor Stassen observed that we did not yet have our appropriations for the coming fiscal year; that the will of the Congress was therefore to be determined; that after the Congress had appropriated funds, an Executive Branch review of the priorities confronting the United States Government would have to be made, at which time the decision as to the U.S. ability to help Pakistan further would be considered. Mr. Stassen said that his staff was reviewing the situation in Pakistan, including consideration of any surplus commodity aspects involved. He added that this review combined with the one going on in Karachi would, subject to the policy recommendations of the Secretary of State, contribute to the final consideration by the Executive Branch.
In response to Governor Stassen’s inquiry as to whether or not Pakistan still held some foreign exchange, Sir Zafrulla and the Ambassador parried by noting that the difficulties on the foreign exchange earnings side made the situation very difficult for Pakistan.
Governor Stassen then indicated that the U.S. was prepared to extend technical assistance to Pakistan on civil aviation, for development not only of technicians but of Pakistani civil air management as well, Governor Stassen said that the matter of U.S. technical assistance was a GOP decision as to whether or not the GOP wished to request such assistance. He indicated that this was also the case with regard to the possible supply of equipment for the purpose of developing civil aviation within and between (and Governor Stassen emphasized the “within and between”) East and West Pakistan. The Ambassador moved quickly to note that Pakistan was interested in this aid and was interested particularly in developing its civil air transport which now was proposed to link Dacca to Karachi and then on to London. Governor Stassen retorted that the primary (but not absolutely exclusive) purpose of U.S. aid on equipment was for strengthening of the internal system. Governor Stassen said that should the GOP request such aid, some U.S. aid in the form of a loan for the life of the equipment might be possible.
The Ambassador then picked up Sir Zafrulla’s earlier reference to the GOP concern in East Bengal over the communist strength among the students there, and elaborated with first the implication and then the outright statement that West Bengalis had stimulated the riots in the jute and paper mills of East Bengal and were using the communists to disrupt the East Bengalese economy. The Ambassador [Page 1851] noted that this was a short-sighted policy which would do no more than strengthen the communists who would, in the final analysis, be as great a danger to India as they now are in East Pakistan.
Governor Stassen observed that any attempt to use the communists as a tool anywhere in the world was indeed a dangerous practice. He concluded the meeting by commending the GOP’s good fortune and courage in observing the danger and taking prompt action in East Pakistan. Both Sir Zafrulla and the Ambassador seemed pleased with their talk with Governor Stassen and departed in good spirits.