480. Memorandum of a Conversation, Department of State, Washington, May 27, 1958, 3 p.m.1
SUBJECT
- Economic Aid to Thailand
PARTICIPANTS
- Ambassador Thanat Khoman, Embassy of Thailand
- FE—Walter S. Robertson, Assistant Secretary for Far Eastern Affairs
- FE—Gardner E. Palmer, Deputy Assistant Secretary for Economic Affairs
- SEA/E—Frank S. Wile
On May 27, 1958, at 3:00 p.m. Ambassador Thanat Khoman called upon Assistant Secretary Robertson to discuss Field Marshal Sarit’s memorandum of May 12, “Development Projects in Thailand”.2 The Ambassador stated that he had requested this appointment with Mr. Robertson in order to clarify why additional assistance was requested at this time. The Ambassador stressed the importance which the Thai Government attaches to its request for additional aid to Northeast Thailand, noting that the justification is more political than economic. He stated that Communist elements in surrounding countries of Southeast Asia, notably, Laos, South Viet-Nam, and Indonesia, are exerting strong pressures on Thailand. He said that the situation in Laos is not too different from that in Northeast Thailand in that the latter is exposed to Communist propaganda at a time when adverse economic conditions make it a fertile ground for Communist subversion. He stated that those members of the Thai Parliament most receptive to Communist propaganda are from the Northeast region. These “special circumstances” force the Thai to request that “greater efforts” be made in the Northeast and it is for this reason that Field Marshal Sarit was authorized by the Thai Government to negotiate in Washington for increased grant aid. The Ambassador repeatedly stated that the main purpose of the Sarit mission is to secure “agreement in principle” from the United States on the proposed projects which will then be submitted to the USOM and TTEC for technical study. The Ambassador termed the projects “rather modest” in scope and noted that some of them could be funded over a period of time.
Mr. Robertson thanked the Ambassador for his frank presentation. He pointed out that total aid to Thailand since 1951 has been in the neighborhood of $388 million, a not insignificant sum. He emphasized that United States Government departments are dependent upon Congressional appropriations and can allocate only what has been appropriated. Mr. Robertson then mentioned the global responsibilities of the United States and called attention to the fact that the needs of the world far surpass the ability of the United States to respond to them. He assured the Ambassador that there is no ally in Asia whose friendship the United States values more than that of Thailand; however, as Mr. Dillon told Field Marshal Sarit, we cannot commit funds we do not have and we won’t know how much we will have until the Congress has acted. Mr. Robertson said it is important that the Thai understand, in this connection, that one Congress cannot commit funds to be provided by another Congress. It is also important that the Thai understand the limitations which govern the granting of United States assistance and that, however important the need, we cannot allocate funds which have not yet been appropriated. He assured the [Page 1012] Ambassador that every effort is being made to have the FY 1959 MSP bill passed in its entirety but observed that, with the recession and the budgetary deficits which are likely to develop, the historical pattern of cuts in appropriations would probably continue.
Mr. Robertson referred to possible loan sources of financing, notably the IBRD, the Ex-Im Bank and the DLF, and suggested that the Thai review their projects to ascertain which of them might be suitable for loan financing by one or another of these agencies. He pointed to the competition which exists for DLF funds and cautioned that priorities would have to be assigned to projects submitted to that agency for financing.
The Ambassador again referred to the “special circumstances” in Northeast Thailand and throughout the balance of the meeting suggested that the Department could fund the proposed projects by allocating more to Thailand from total MSP appropriations. Each time, Mr. Robertson attempted to make clear to the Ambassador that this procedure would mean taking away funds earmarked for other countries, which we could not do. In this connection, Mr. Robertson tried to make clear to the Ambassador the Department’s role in allocating funds, following Congressional appropriations, and pointed out that this allocation is done equitably and, as far as possible, in proportion to whatever cuts are made by the Congress.
Mr. Robertson stressed the desirability of submitting the proposed projects to the USOM, and suggested that some of them might be fitted into the present aid program through a shift in priorities. The Ambassador replied that the Thai Government wished to submit these particular projects to the highest level in the United States Government. He stated that some of the projects had in fact been submitted to the USOM and that all had been submitted to Ambassador Johnson who, he said, had promised to support them since their urgency had been established. Mr. Robertson suggested that the Ambassador was misinformed about Ambassador Johnson’s views since nothing we had seen indicated Ambassador Johnson’s approval of the projects.
The Ambassador feared that he had not made clear to Mr. Robertson his government’s position, explaining once again that what is wanted is “agreement in principle” to the proposed projects to meet the urgent situation in the Northeastern region. He also stated that, even though aid were to be cut off from Thailand, her friendship with the United States would endure. Mr. Robertson assured the Ambassador that we have no intention of cutting off aid to Thailand and once again expressed the hope that he had made it clear why the United States cannot provide larger grant aid to Thailand at this time.
[Page 1013]Mr. Palmer said that the USOM understands the importance which the Thai Government attaches to the Northeastern area and in his opinion would give sympathetic consideration to any projects which the Thai might wish to include within the framework of the present program.
In concluding, Mr. Robertson stated that we do not question the need for the proposed projects but that, following Congressional appropriation, the Department must allocate available funds on an equitable basis. Mr. Palmer added that the history of the Mutual Security Program, with large cuts being made each year, has been such that the Department has had progressively less flexibility in the allocation of funds.
Ambassador Thanat Khoman departed Mr. Robertson’s office at 4:15 p.m.