840.00(R)/7–2150
Memorandum of Conversation, by the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (McGhee)1
Subject: Turkish Government Request for Increased ECA Assistance for FY 1951.
| Participants: | Mr. Melih Esenbel, Turkish Chargé d’Affaires |
| Mr. George C. McGhee, Assistant Secretary | |
| Mr. Gerald Keith, Counselor of Embassy, Ankara | |
| Mr. Francis F. Lincoln, GTI | |
| Mr. C. Robert Moore, GTI |
Problem: Turkish Government requests the Department’s support in obtaining an increase in ECA aid in FY 1951.
Action Required: To determine if there is a legitimate basis for urging ECA to consider additional aid for Turkey. Action Assigned to: GTI.
Mr. Esenbel called to express the serious concern of the Turkish Government over the probability of a very drastic reduction in ECA aid to Turkey for FY 1951 and to ask if the Department, in view of the very special factors involved, would take up with ECA the question of more favorable treatment for Turkey.
Mr. Esenbel referred specifically to the establishment of an EPU initial position for Turkey of $25 million on a loan basis as against the amount requested by Turkey—$65.7 million on a grant basis—and to the anticipated direct ECA dollar aid of around $35 million, “more than $100 million less than the original Turkish request”. Mr. Esenbel then proceeded to develop the theme that ECA aid to Turkey from the very beginning had been on a different basis than ECA aid to other countries. Turkey had already attained its 1938 level of production, and its main problem was to develop its economy. As the other countries have spent a large portion of ECA funds on consumables and have been able to increase their production, their requirements are not as acute as in 1947. In the case of Turkey, however, ECA aid is being utilized on long range development projects, which would be seriously affected if the volume of aid should be reduced. Mr. Esenbel complained about the [Page 1279] Snoy-Marjolin formula2 for the allocation of direct aid and expressed the view that, since a special exception was being made for Greece, it should likewise be possible to make a special exception for Turkey. He commented that obviously conditions in various ECA countries, differed, so that it was not logical that the reduction in ECA aid to be received by all countries in FY 1951 should be uniform. He also mentioned that the ECA trade liberalization program would not benefit Turkey as much as many of the other ECA countries. Tobacco, one of Turkey’s principal export items, is a state monoply in most of the other ECA countries so that their imports will probably remain more or less fixed.
I pointed out that we do not like to intervene in decisions that have been made by ECA and OEEC, and that as a general policy, it is difficult for us to suggest a greater amount of aid for one country, Turkey for example, which would result in reduced aid to other countries. To be able to do so would in effect impose on us the requirement of reviewing all of the available data on the needs of such other countries to satisfy ourselves that Turkey’s need was more essential. I also mentioned that in the case of a country’s investment program such a program can be carried out at a slower or faster rate depending, among other things, on the availability of funds to finance it. In the case of Turkey the budgetary factor is an important one, in view of the lira requirements that the investment projects generate. I also pointed out that it is generally recognized that Greece’s need for ECA assistance differs very much from that of Turkey in that this assistance is necessary to enable Greece to survive, which is not the case with Turkey.
In reply to my question, Mr. Esenbel stated that the Turkish request was also being taken up directly with ECA. I suggested that this was the best way of handling it, but I indicated, however, that we would be glad to study his memorandum to determine if there was any action we could appropriately take.
- Attachments (not printed): memorandum, July 21, “Turkish Marshall Aid Program for 1950–51 and memorandum, undated, “Turkish Balance of Payments Deficit for 1950–1951” (source, presumably the Turkish Embassy, not indicated).↩
- A formula for allocating economic aid through the Organization for European Economic Cooperation. Baron Jean-Charles Snoy et d’Oppuers was formerly Chairman of the Council and Robert E. Marjolin was Secretary-General of the Organization. For documentation on the OEEC, see Foreign Relations, 1949, vol. iv, pp. 367 ff., and vol. iii, pp. 611 ff. The Turkish share under the Snoy-Marjolin formula was 1.507 percent of direct country economic aid for Europe for fiscal year 1951.↩