Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

611.90B/6–1650

Policy Statement Prepared in the Department of State¹

secret

[Washington,] June 16, 1950.

Burma

a. objectives

It is to the interest of the US that there be a stable government in Burma, oriented toward the US and the Commonwealth and capable of restoring internal order, of resisting Communist pressures and of advancing the social and economic rehabilitation of the country.

b. policies

The process of political and economic distintegration which set in a few months after Burma achieved independence on January 4, 1948 continued during the past year. Recently government forces, aided by a quarrel between the White-Flag Communists and the Peoples Volunteer Organization (PVO), succeeded in capturing Prome, which had been established as the capital of the combined White-Flag and PVO rebel factions. The PVO leaders are now negotiating for peace with the Government, but the Communist forces have not been destroyed and are still active in harassing government lines of communication and keeping large areas of the country in a state of insecurity and unrest. This is a situation which can be exploited by Communist China.

Primary responsibility for providing the advice and the military and financial aid Burma needs in order to stabilize itself should properly rest upon the UK and the Commonwealth. It is our policy to conduct our own Burma program in such a manner as to complement their efforts by giving such assistance as the US may be better able than those countries to provide.²

We have been carrying out limited Information and Exchange of Persons Programs in Burma. We are now planning to expand these programs; and we are also developing technical assistance and military aid programs adapted to the present situation in Burma. In this connection, the Department sent to Southeastern Asia and to Burma in the spring of 1950 a mission headed by Mr. R. A. Griffin to make recommendations for specific US assistance projects which will be useful in carrying out our over-all policies in the area.

Political Issues. These proposed assistance programs have three main political objectives. The first is to overcome Burmese suspicion of foreign assistance and advice which has been to a large extent responsible for the failure of the UK and the Commonwealth to provide effective military or financial assistance to Burma up to the present time. The Burmese are slightly less suspicious of the US than they are of their former British rulers, and the Burmese Government has officially expressed an interest in obtaining US technical advisers. It is hoped that US technical assistance and exchange of persons programs will enable the Burmese to ascertain the value of US advice and that it is sincerely given for the best interests of Burma. The resulting increased Burmese confidence in US advisers will provide a means of influencing the Burmese Government properly to utilize the various types of foreign aid made available to it, not only by the US but by the UK and the Commonwealth as well. We should also encourage the Burmese to accept foreign advisers, particularly those which can be made available by the UK, the Commonwealth or the UN.

The second political objective is to increase the domestic prestige of the present Burmese Government. The Government depends for support upon the Socialist Party, which has a large majority in Parliament. Since April 1949, however, the top Socialist leaders have declined to hold ministerial portfolios because they consider it politically inexpedient to be personally responsible for the Government’s failures to revive the prosperity of the country. The Government is run, therefore, by a kind of caretaker Cabinet. This Cabinet, under the leadership of Prime Minister Thakin Nu, Deputy Prime Minister Ne Win and (until his resignation in January 1950 to accept the Acting Chief Justiceship) Foreign Minister E Maung—none of whom are members of the Socialist Party—has somewhat modified the earlier visionary policies of extreme Socialism and chauvinistic Nationalism. These men have publicly expressed their realization that Burma needs foreign capital and technical assistance to insure her future economic development and foreign military aid to restore internal order. They are becoming more and more aware of the danger to Burma which is represented by the Communist victory in China and the rapid extension of Communist control over Yunnan.

If this present Cabinet can, with the help of American technical experts, initiate and successfully carry out a few economic development and public welfare schemes, its policy of looking to the US and the Commonwealth for aid might gain popular acceptance. The Government might gain more positive support from the Socialists as well as the adherence of a greater proportion of that mass of the Burmese people who have been generally confused and disgusted by all the present political factions in Burma.

The third political objective is to increase the capability of the Government militarily to defeat the Communist insurgent groups and to defend Burma’s borders against Communist infiltration or invasion from China. With a few negligible exceptions, the burden of outside military assistance to Burma has thus far been borne by the UK and the Commonwealth. It is our intention that these countries should continue to assume this responsibility. However, the present critical significance of Burma’s military situation has made it desirable to obtain authorization to provide military items which are unavailable from UK or Commonwealth sources, but which would forward the Burmese Government’s operations against domestic insurgents, in reestablishing internal law and order, or in safeguarding the frontiers. On May 12 the President approved an allocation of $3.5 million for funds available under Section 303 of the Mutual Defense Assistance Act of 1949 for grant military assistance to Burma.³ This approval is based on a recommendation by the Department of State and supported by the Department of Defense that the US supply ten Coast Guard cutters to the Burma Navy. It is also desirable to obtain Congressional authorization for reimbursable US military aid to Burma. The Burma Navy is better trained and is more efficient than the other Burma armed services and is, therefore, best able to make effective use of any aid we may give.

It has been decided that we should provide training opportunities in the US for a few officers of the Burmese Armed Forces and, in response to a request made by General Ne Win to our Military Attaché at Rangoon, the Defense Department is trying to find a suitable opening for a Burmese Army officer in one of our Army schools.

The insurgent groups in Burma present their own special and rather obscure policy problems. The ideal solution of the Karen Peoples Volunteer Organization and Army mutineer insurgencies would be negotiated political settlement which would reunite these non-Communist insurgents with progovernment forces in a strong combination capable of successful resistance to Communism. US aid if successful in raising public confidence in the Government might be instrumental in disposing the non-Communist insurrectionary groups to seek peace terms.

The most serious of these non-Communist insurgencies is that of a majority faction of the Karens, a minority ethnic group which is striving for an autonomous or independent state. Although many of the Karens, who number about 2,000,000 out of a total population of about 18,000,000, have not become involved in the revolt that broke out in January 1949, and some have consistently been loyal supporters of the Government, racial antagonism between the Karens and the Burmese majority race has become increasingly bitter. The sympathy for the Karens which is felt by the other minority ethnic groups—the Chins, Kachins and Shans—has also weakened the loyalty of these groups to the Government. The danger which derives from this situation is greatly increased by the fact that the best soldiers in Burma are the Karens, Chins, and Kachins. General Ne Win, Deputy Prime Minister and Commander-in-Chief of the Burma Armed Forces, is particularly bitter toward the Karen insurgents, against whom he has directed his main military efforts. On March 19 his Army captured the Karen rebel capital, Toungoo, 175 miles north of Rangoon on the Sittang River. The Government, having demonstrated its superiority, may now be willing to attempt a peaceful settlement with the Karens. If this happens, there may be an opportunity for the US, the Commonwealth, or the UN, to offer the services of a conciliator.

A special aspect of US relations with Burma is the strong pro-US and UK attitude of all these ethnic minorities. They actively helped the US and UK prosecute the war against the Japanese in Burma; and they could be relied upon in the future as centers of resistance or of potential clandestine operations by the US and UK in Burma in the event the country falls to the Communists. It is therefore important that we try to retain the friendship of these groups even while we are giving economic and military aid to the Government. To do this we must constantly stress the advantages of US aid for all the peoples of Burma and urge that the majority race make peace with the Karens and try to build a spirit of mutual cooperation among the several minority factions.

There is much less bitterness between the other insurgent groups and the Government. These groups are the two Communist parties, the Peoples Volunteer Organization and some army mutineers. The latter two are not Communists but have been, for domestic political reasons deriving from conflicts of political personalities, sympathetic to the Communist rebels. Fortunately, however, most of the PVO has now split away from the Peoples Democratic Front which they had formed in coalition with the White-Flag Communists. This split, which resulted from the White-Flag Communist attempts to tighten their control over the PVO, has caused the PVO to undertake peace negotiations with the Government and has resulted in the fall of the Communist capital at Prome.

The most significant contact of the US with Burma has been for many years the work of American Christian missionaries in that country. The Government has announced a policy of discouraging any expansion of foreign missionary activity and it has placed severe limitations on the issuance of visas to foreign missionaries. The Government has incorporated Judson College, formerly operated by the American Baptist Mission, into the University of Rangoon. The Government has not yet fulfilled the agreement it made with the Mission to pay compensation for the Mission’s share of the Judson College real estate. A considerable portion of other American missionary properties, which are valued at more than $20,000,000, have been under requisition since the end of the war. Rentals have been paid for some of these properties, but not for all of them, so that the action of the Burmese Government could be considered a temporary use rather than appropriation. Some of the missionary property has been damaged by looting and by military action during the course of the insurrections. Our Embassy has formally requested the Burmese Government to protect American missionary property from such depredations; but the Government has been unwilling, or in many cases obviously unable, to comply.

Bilateral treaty relations between the US and Burma are based upon those treaties and agreements between the US and the UK which applied to Burma before independence and which are considered continuing in force under the terms of Burma’s independence arrangements with the UK and those agreements which have been concluded directly between the US and Burma. The following agreements only have been concluded directly between the US and Burma to date: air transport agreement, educational exchange (Fulbright) agreement, agreement for the exchange of official publications, and agreement regarding settlement for surplus property. The US and Burma conducted bilateral tariff negotiations at Geneva in 1947, the results of which were incorporated into their respective schedules in the GATT. It is considered desirable that further negotiations of new treaties and agreements be undertaken to fill existing gaps in our treaty relations and to replace US–UK treaties and agreements which are no longer entirely appropriate in view of Burma’s statehood.

In support of its objective in Burma the US should continue and expand its information and cultural exchange programs contributing to a better understanding by the peoples of Burma of Western democratic traditions and striving to dramatize the fact that Communism in Burma would mean ultimate totalitarian rule under Soviet control. The Department has recommended an expenditure of approximately $400,000 from funds available under Section 303 of the Mutual Defense Assistance Act for a considerably expanded information and exchange program. Under the terms of the Fulbright agreement there has been established a United States Educational Foundation in Burma. Fifteen American educators and research scholars have gone to Burma on grants made by the Foundation. They have been highly successful in creating among Burmese with whom they worked a better and more cordial understanding of the US. The Foundation has paid intercontinental travel expenses for twelve Burmese students coming to study in the US and scholarships have been granted to 35 Burmese nurses to study in the Seagrave Hospital (American) in Burma. The work of the Foundation will be continued and enlarged upon as political conditions in Burma permit.

Economic Issues. Political stability in Burma requires the rehabilitation and improvement of its economy, particularly in the fields of agriculture (to increase rice production), mining (to obtain more strategic materials in world short supply and to provide Burma with a means of earning dollars), transportation facilities and industries for processing domestic raw materials. Unfortunately, however, rehabilitation in Burma has now practically ceased. During the period after the re-occupation of the country by the British in 1945 until early 1948, when Burma received its independence, the reconstruction and rehabilitation of Burma’s economic life made slow but fairly steady progress. Since that time, however, economic conditions have deteriorated gravely, as a result not only of civil strife but also of shortages of foreign exchange, increased military expenditures and lack of qualified civil servants. Production and exports have declined, causing a reduction in foreign exchange earnings, the major share of which is now required for the purpose of maintaining currency backing. At the same time, import needs for consumption, rehabilitation and military purposes have increased or remained unchanged.

Although Burma’s rice exports are only about half as large as they were before the war when Burma was the largest world exporter of rice, 80% of the country’s foreign exchange earnings are now derived from this product. Since the discontinuance of the IEFC rice allocations system in January 1950, Burma has succeeded in selling most of its 1949 exportable surplus of rice at a two pound per ton price increase.

As a member of the sterling area, Burma obtains most of its supply of dollars and other hard currencies from central reserves in the UK, drawing more dollars from the pool than are earned by its trade and paying for these dollars in sterling. Hard currency purchases are relatively small because of the very limited amount of sterling available to Burma for this purpose, and also because dollar allotments are limited by the British to “essentials”, strictly defined.

The US may be able to assist in stimulating progress toward rehabilitation by carrying out a program of economic and technical aid along the lines recommended by the Griffin Mission. The Department in cooperation with ECA is working out such an aid program for Burma to be operated by an ECA Mission with money available from unexpended China aid funds. The program is expected to require the expenditure of about $12 million for the first year. A draft economic and technical assistance agreement between Burma and the US is now being finalized and it is anticipated that we will be ready to begin negotiations with the Burma Government in the very near future. We should also utilize as fully as circumstances permit the potentialities of the Smith–Mundt and Fulbright Acts for the exchange of technical personnel and students between the US and Burma.

In accordance with the fundamental concept of our Point 4 Program, the capital investment required for rehabilitation and development should be sought from private enterprise. The Burmese Government has recently announced its desire to attract foreign private investments and to participate in the Point 4 Program, especially in the field of mineral exploitation. However, in view of present disturbed conditions in the country, it is unlikely that any appreciable amount of private foreign capital will enter Burma. As conditions improve, the old British firms which had been active in Burma in the pre-war and immediate post-war periods will probably be the first private foreign commercial enterprises willing to commence operations in Burma.

Present unsettled conditions make it extremely uncertain that projects could be presented which would qualify for Export-Import Bank financing. Burma is not a member of the International Monetary Fund and Bank and, therefore, is not eligible for financial assistance from that quarter. If Burma should apply for membership, we would recommend favorable action on the application.

Burma trades largely with India, the UK and China, and only to a very limited extent with the US. Accordingly, there will probably be little direct US influence on Burmese foreign trade practices. Because of its dollar shortage, Burma has been forced to place severe restrictions on imports from hard currency areas. Although recognizing this necessity, it is our policy to encourage Burma to conduct its trade according to the ITO Charter and the principles of the General Agreement on Tariffs and Trade, to which it is a contracting party.

US representatives at Rangoon should at favorable opportunities encourage the Government of Burma to prohibit the production of opium for nonmedical purposes and to discourage the opening of licensed shops where drug addicts may obtain opium. The US urges Burma to join with other opium-producing countries in supporting provisions for limiting opium production in the new convention now being prepared under the UN.

c. relations with other countries

Burma has extended recognition to the Chinese Communist régime but this recognition has not yet been acknowledged. The Burmese Government policy on China is to take no action which would unnecessarily antagonize the Chinese Communists. Burma is fortunate in not having a large immigrant Chinese minority. The total number of Chinese living in Burma probably does not exceed 300,000, and the Government is rigorously limiting further Chinese immigration.

The Socialist left-wingers under the leadership of U Ba Swe, Secretary-General of the Burma Socialist Party, are pro-Mao Tse-tung, having announced at various times their gratification over Mao’s victories in China and the conclusion of the Communist Sino-Russian Treaty. The Rangoon branch of the Chinese Democratic League has been inconspicuously but assiduously cultivating Socialist left-wingers. However, the Moscow propaganda output on Burma backs the insurrectionary Communist parties and denounces the Socialist supported Government of Burma as an imperialistic tool. It seems probable that the Chinese Communists will assist the Communist-rebel factions in Burma in an attempt to overthrow the present Burmese Government by force, and at the same time try to weaken Burmese resistance to Communism by subversive propaganda, and by penetrating and deliberately misguiding the Socialist Government.

The Burmese Government is worried about its long and partially undefined boundary with China. Border incidents frequently occur which could provide a pretext for Chinese Communist invasion into Burmese territory. In the event of a decisive Burmese Government victory over the domestic Communist insurgents, it is possible that the Chinese Communists would try to occupy the Shan State of Kengtung, which is remote from Rangoon but which provides access to Thailand and Indochina as well as Burma.

A committee of Commonwealth ambassadors at Rangoon was established in May 1949 under UK initiative to study the Burmese Government’s requests for a sterling loan and military equipment. Some military equipment has been supplied by the UK, India, and Pakistan; and these countries have been joined by Ceylon and Australia in granting the Commonwealth loan of £6,000,000 to be used for domestic currency backing. The UK contributed £3,750,000. There was considerable political opposition to this loan in England. The UK is now reported to be giving favorable consideration to supplying, on a reimbursable basis, arms and equipment for ten battalions of frontier troops. The British Foreign Office anticipates that these troops would be mainly, if not exclusively, Chins, Kachins and Shans, and it expects that, should Burma fall to the Communists, these troops would remain loyal to the British connection and would provide a base for British clandestine activities or guerrilla warfare against the Communists in Burma.

The Burmese Government has announced its gratitude to the UK and the Commonwealth for the help and sympathy which they have given thus far; but suspicion of British motives and resistance to any thought of return to the Commonwealth is still strong and widespread in Burma. The British on the other hand seem inclined to the opinion that failure to settle the Karen dispute, combined with the dwindling military capability of the army and the persistent Burmese refusal to tolerate British or Commonwealth advice in any matter, renders the entire Burma situation practically hopeless.

Although some friction has developed between Burma and India over the issues of strict Burmese limitation on Indian immigration and Burmese plans to nationalize agricultural lands in Burma which are owned by absentee Indian landlords, Burma’s traditional ties with India and Burmese admiration for Nehru have kept Indian-Burmese relations on a friendly basis. The growth of Indian power and influence among Asian nations causes some uneasiness in Burma which lies, rich in natural resources, on the eastern frontiers of this overpopulated colossus. Nevertheless, the Burmese feel they have a great deal more in common with the Indians than with the British; and Indian participation in the Commonwealth efforts to help Burma has allayed to an important extent characteristic Burmese distrust of British intentions. In conjunction with the Commonwealth aid plans India supplied some 200,000 rifles for the Burma Army during the past year and also participated in the Commonwealth loan to the extent of £1,000,000.

Apparently regarding Pakistan as a counterbalance to growing Indian power, the Burmese Government has maintained the most cordial relations with that country. General Ne Win, Deputy Prime Minister, and U E Maung while he was still Foreign Minister, visited Karachi last year en route to Rangoon from Washington and London. They have discussed military aid and trade relations with officials of the Pakistan Government. Burma and Pakistan exchange Ambassadors, and the Pakistan Ambassador is a member of the Commonwealth Committee in Rangoon. Pakistan participated in making the Commonwealth loan to Burma to the extent of £500,000.

The Burmese Foreign Minister said during his visit to Washington last August that because the races of Indochina are more congenial to the peoples of Northern Burma than are the Chinese, he fears subversive Communist penetration from Indochina more than from China. He said he, believes that Ho Chi Minh is a Communist and that he hopes the Bao Dai Government will succeed. However, the Burmese Government is not prepared publicly to express approval of Bao Dai.

The agreement between the Burmese and Russian Governments early in 1948 to exchange Ambassadors has not been implemented, and there has been no contact between the two countries. A Burmese trade delegation has visited Czechoslovakia and a Czech delegation visited Burma. The Burmese were favorably impressed, but there has been no further development of this relationship. Moscow propaganda labels the present Government of Burma as an imperialist tool and Burma’s independence as fictitious. This line occasionally arouses intense Burmese indignation but in general seems to make little permanent impression on Burmese attitudes toward the USSR.

Burma was admitted to the United Nations on April 19, 1948. It has thus participated in the second special session on Palestine and the third and fourth regular sessions of the General Assembly. It has not taken a particularly active role in any of these sessions, although its Foreign Minister was elected Vice-Chairman of the Sixth Committee in the fourth regular General Assembly. While ordinarily receptive to the views of the US, the Burmese delegation generally has avoided taking a position on issues arising out of the east-west conflict except toward the end of the Paris session and again after the arrival of the Foreign Minister at the fourth General Assembly. Its over-all orientation is with the Asian states and the underdeveloped countries. During the period when U E Maung was Foreign Minister, Burma could be depended upon to follow the lead of the US in important issues.

d. policy evaluation

The basic question in analyzing the adequacy of our Burma policy is whether the development of a reasonably stable political situation and the reorganization under Burmese leadership of an adequately functioning economy can be completed soon enough to make possible successful Burmese resistance to the impending Communist effort to bring Burma under Communist domination.

The very weaknesses in the Burmese situation which we are trying to help overcome are the factors which obstruct the success of our policies—suspicion of the motives behind foreign aid, political immaturity which renders the Burmese people and their leaders susceptible to Communist propaganda, lack of trained administrative personnel to back up any large-scale economic aid program, social disintegration which has reduced the country to a chaos of warring factions. Thus US policy cannot of itself guarantee a solution of the Burmese problem but must be regarded merely as a technique whereby we may be able to contribute to the gradual overcoming of these weaknesses in Burmese national life.

We cannot judge the effectiveness of this policy until we have had an opportunity to observe whether our aid programs are having a favorable impact upon conditions in Burma. Burmese attitudes toward our technical aid projects will be far more significant indicators of the success of the projects than the degree of their efficiency in achieving specific economic objectives.

The Burmese people have reacted favorably to the exchange of persons and information programs we have thus far undertaken in Burma. Government officials have expressed interest in obtaining assistance from the US under our proposed Point 4 Program. The Griffin Mission expressed its belief that an American aid program in Burma could win new and great good-will in Burma if it were jointly administered with the Burmese by capable, hard-working, patient US personnel.

The British have agreed with our analysis of the role US technical assistance can and should play in Burma and they have acquiesced in our assertion that the UK and Commonwealth should continue to accept the primary responsibility for military and financial aid. To this extent our policy of encouraging their acceptance of primary responsibility has succeeded. If in view of Burmese anti-British and anti-Commonwealth attitudes, the British become convinced either that the Burmese situation is utterly hopeless or that the US would accept the primary responsibility should the UK withdraw, then the UK and the Commonwealth assistance to Burma might be expected to dwindle rapidly. If the British withdraw from Burma, the US will probably have to step into the breach; and we must, therefore, prepare as rapidly as possible for this contingency.

Another contingency which should be anticipated is the provision of substantial military assistance by the Chinese Communists to the Burmese Communist insurrectionaries. The proposed expanded information and exchange of persons programs to be carried out with Section 303 funds would prepare the US to meet an intensified Communist propaganda drive in Burma; and our proposed economic and technical assistance programs should give the US a favorable position in respect to any intensified Communist effort to gain the friendship of the present Government and the non-Communist population of Burma. However, if the Chinese Communists give strong military assistance to the Burmese Communists and if the UK and the Commonwealth military aid to the Government forces is not correspondingly stepped up, it will probably become necessary for the US considerably to expand its present plans for military assistance to Burma.

If Burma and Indochina can be held against Communism, we cart probably hold all of Southeast Asia. If either Burma or Indochina falls, Siam would probably follow; and Southeast Asia would be practically defenseless against the onrush of Communism. We are moving as rapidly as possible to find out how much US military and economic assistance is really needed and can be used effectively in Burma and to supply that assistance at the earliest possible date.

1. Policy statements on various countries were prepared and updated periodically within the Department of State.
2. Documentation on the discussion of primary responsibility for Burma at the Foreign Ministers Conference in London, May 11–13, is scheduled for publication in volume iii.
3. For further documentation on the military defense assistance program for the Far East, see pp. 1 ff.