289. Telegram 4090 From the Embassy in Iran to the Department of State1 2
Tehran, July 8, 1972, 1250Z
Subject:
- Secretary Connally Travel: Memorandum of Conversation From Secretary Connally’s Meeting With President Bhutto at the Presidential Palace in Rawalpindi on July 6, 1972: Part VI of VII: Foreign Investment
- 1.
- At the end of the conversation, I expressed my appreciation for the opportunity to visit with Bhutto and talk with him. I said we had had an excellent meeting with his finance, monetary and production people and that I had raised the issue of investments and diversification within the country. We had made one suggestion to them that I wanted to repeat to him. We did not in any sense want to suggest what type of any economy or economic policy Pakistan should have, but if it wanted diversification and wanted foreign investment capital, I had told his ministers there were three essential ingredients: (1) political stability, (2) economic stability, and (3) a clear signal that Pakistan wanted foreign investments. I told him there was a shortage of capital in the world. Contrary to my avowed intentions not to give any suggestions or advice, but in his interest, I would say that both Singapore and Brazil add political and economic stability and an investment policy which taken together acted as incentives to attract capital. They had been tremendously successful. Whatever the rules following twelve years of military control in Pakistan, the [Page 2] rules should be set forth explicitly so everyone could understand. I said that these rules being understood, I thought he could get help from other sources.
- 2.
- Bhutto replied he had tried to make it clear that he wanted investment. It would be safe. They had nationalized some domestic industries and businesses but had not tampered with any foreign investments except in the field of insurance, which frankly he did not class as foreign direct investment. It was a business that fed off domestic economy and was in a different category. He would try to make it even more clear in the future that they wanted all the foreign investments that they could get. This ended the conversation except for a reference to the dinner that evening in which he was going to provide some type of entertainment. He said: “If you don’t like it, stop it and we will go on to the next act.”
Connally
- Source: National Archives, RG 59, Central Files, 1970–73, POL 7 US/Connally. Secret; Immediate; Nodis. Also designated as CONTO 268. Sent with instructions to pass to Islamabad, New Delhi, Dacca, the White House for Davis, and Treasury for Dixon.↩
- Former Treasury Secretary Connally concluded the conversation by offering suggestions on how to promote foreign investment in Pakistan.↩