Foreign Relations of the United States, 1950, The Near East, South Asia, and Africa, Volume V

882.10/9–1150

The Acting Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Berry) to the Turkish Ambassador’ in, the United States (Erkin)

Washington, October 13, 1950.

My Dear Mr. Ambassador: Prior to his departure for Europe and Africa, Mr. McGhee referred to me for reply your letter of September 11,¹ regarding United States economic assistance to Turkey. I had hoped to be able to inform you of some concrete developments with respect to the problems you mentioned, but as I am not able to do so at this time, I can only comment generally on them. While they are the primary responsibility of the ECA, I need not tell you that they are problems in which the Department of State has the greatest interest.

This Government, as it has demonstrated in many ways, recognizes the tremendous burden which the maintenance of a strong national defense establishment has imposed and is continuing to impose on the Turkish economy. It likewise recognizes Turkey’s need for external economic assistance to carry out a sound economic development program. The funds available for foreign economic assistance are limited, however, and in determining their distribution, there are many important factors, not always directly comparable, which have to be taken into consideration. While allocations of ECA aid to Turkey have been less than Turkey may consider it requires, Turkey has, I believe, received very favorable and fair treatment and has been able to derive more permanent benefit from the aid that has been extended to it than many other countries. I refer more specifically to the fact that aid funds in Turkey have been largely devoted to the economic development of the country, rather than to its rehabilitation as has been the case with most of the other ECA countries. Turkey’s productive capacity is being considerably increased as the aid consists almost entirely of capital goods, in contrast to the very large proportion of food stuffs and consumable goods that have been required by many of the other ECA countries.

I note the comment in your letter that the average citizen in Turkey seldom sees any concrete evidence of ECA aid, and, in one sense, I think that this is a tribute to the ECA program in Turkey. It is a real indication that the United States, by assisting Turkey to finance vitally important long terms projects—such as the development of the Zonguldak Coal Basin, the lignite mines, and power facilities—which are less visible to the public than, let us say, consumer goods, but which will ultimately make a greater contribution to the welfare of the Turkish people, has a sincere and continuing interest in helping your country build up a sound and expanding economy.

It is inevitable that ECA aid to be allocated to Turkey in the present fiscal year will be less than in the previous year, as a result of the very substantial reduction in ECA appropriations, even though Turkey, in common with other ECA countries, might well be able to absorb considerable additional aid. In view of rapidly moving international developments, however, I feel it would be unrealistic for me to say that the amount of ECA aid which a country might expect to receive as of today will, under any and all circumstances, remain unchanged throughout the entire fiscal year. I do not mean to imply that I foresee the likelihood of increased ECA aid to Turkey in the near future, but I can assure you that Turkey’s needs are being and will be given every consideration by ECA in the light of its policies.

I am very pleased to learn that an ECA investment team recently visited Turkey and had profitable discussions with officials of your Government with respect to Turkey’s investment program. As I know you have long appreciated, the lack of a comprehensive investment program has considerably handicapped our authorities in their study of Turkey’s requirements. With this deficiency soon to be corrected, I am sure that any further decisions that may have to be reached with respect to direct and indirect ECA aid will be facilitated. I am also pleased to learn that it is expected that the decision on the release of counterpart funds will be reached in the very near future.²

With respect to Point IV assistance, the Department is cognizant of the very effective collaboration between the Turkish Government and the ECA with respect to the active technical assistance program which is now in progress in Turkey, a program initiated considerably before other United States machinery existed to take care of this type of aid on any important scale in the non-ECA countries. I am sure you will agree that Turkey, which is one of the principal recipients of such assistance, is receiving very sympathetic consideration from the ECA on the many technical assistance projects which it is proposing. In addition to welcoming the benefits derived by Turkey from such projects, the Department welcomes the experience being gained in carrying out this program in your country, which it is confident will be of real value to our authorities who are now dealing with the program in the non-ECA countries.

The Department, mindful of the serious problems which confront the Turkish Government in its efforts to combat tuberculosis, can well appreciate the serious consideration which the latter has given to the Swedish hospital project. It understands, however, that the ECA Mission in Ankara, which has given the matter careful study, questions the advisability of the specific project, although in no way minimizing the importance of the tuberculosis problem to Turkey. Consequently, I can only suggest that officials of your Government concerned with this problem discuss it further with the ECA Mission in Ankara to determine to what extent and in what way ECA might be able to be of assistance. I might further add, however, that a proposal to transfer the ECA obligation of one country to another participating country (in this case from Sweden to Turkey), would give rise to many difficulties and would have to be considered not only on the merits of the specific project but in the light of over-all policies.

The importance which your Government attaches to its economic development program is well appreciated by the various Departments of this Government concerned with foreign economic assistance, and I can assure you that the needs of your country, as well as the specific problems mentioned in your letter, are and will continue to receive our sympathetic consideration.

Sincerely yours,

B[urton] Y. B[erry]

1. Not printed.
2. On October 31, 1950, the National Advisory Council on International Monetary and Financial Problems advised the Administrator of the Economic Cooperation Administration that the Council had no objection to use of 125.2 million Turkish lire from the local currency counterpart fund account for the period ending December 31, 1950, with the understanding that 82.7 million Turkish lire of the total amount would be used to repay advances made by the Turkish Central Bank to the Turkish Government for investment purposes (NAC Files: Lot 60 D 137: NAC Minutes. Lot 60 D 137 is a master file of documents of the National Advisory Council on International Monetary and Financial Problems for the years 1945–1958). Turkey withdrew the equivalent of $32.2 million in Turkish lire from the local currency counterpart fund account as of March 31, 1951 (H. Doc. 239, 82d Cong., September 18, 1951, p. 11). (One Turkish lira equaled $0,357.)