Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

359. Memorandum From the Assistant Secretary of State for Near Eastern and South Asian Affairs (Rountree) to the Under Secretary of State (Dillon)¹

Washington, July 2, 1959.

SUBJECT

• Recommendations of Interagency Working Group on Future U.S. Military Assistance to Pakistan

Discussion

The State–Defense–ICA Working Group, which was set up last year on the proposal of W/MSC, and with your endorsement, to examine the problem of future U.S. military assistance to Pakistan following the fulfillment of the 1954 U.S. aid commitment, has now completed its work. This was unfortunately interrupted more than once by such unforeseen developments as the establishment of a military regime in Pakistan last October and the resulting necessity of reevaluating conditions in that country and our relations with it. The work of the group was also protracted beyond original expectations by the recognized need for comprehensive political and economic studies as a prerequisite to reaching valid conclusions. These have, however, been completed and a basic set of recommendations formulated, which I am forwarding to you with this memorandum.

The Working Group’s full report, of which these recommendations form the operative part, is in process of reproduction and assembly and will be sent to you within a few days. In view, however, of my impending departure from the Department and of my particular interest in contributing to a resolution of the problem of our future mutual security aid to Pakistan, I am taking the liberty of drawing your attention to these recommendations in advance of the completed report. They are the product of an extensive and painstaking examination of the numerous, and by no means easily reconcilable, political, military, and economic aspects of the problem. I believe that these recommendations constitute as valid a set of guidelines for our future military assistance to Pakistan as it is possible to arrive at under existing circumstances. I have found them to be consistent with existing policy guidance on Pakistan (NSC 5701), as well as with the proposed revisions to this policy currently under consideration.

As is all too apparent, there is no ready or satisfactory solution to the problem of Pakistan’s present defense burden, which is manifestly disproportionate to its economic resources and continues to place heavy yearly demands on U.S. aid. The responsibility for this situation, however, is not solely Pakistan’s, but also partly ours, stemming as it does from our encouraging that country to join the Baghdad Pact and to build up its armed forces. It is also partly the result of adverse economic developments, especially in terms of trade, beyond Pakistan’s direct control. Having thus assisted Pakistan to develop its defense establishment, we have no acceptable alternative, it seems to me, but to continue to provide sufficient military and Defense Support aid to protect our investment, which is considerable, not only in financial but also in strategic and foreign policy terms, in that establishment.

As the Working Group’s recommendations specify, we must assuredly make every effort to moderate the future demands of Pakistan’s defense establishment and to direct our aid and influence along lines designed to channel economic resources into developmental activities rather than military expenditures. Certainly, there can be no question (barring a radical change in U.S. strategic requirements in the area) of future U.S. aid being used further to build up or to expand Pakistan’s armed forces; and I believe this is already clear to the Pakistan Government. Yet, because of the progressive increase in Pakistan’s recurring military maintenance costs inherent in the fulfillment of the 1954 U.S. commitment, there is little prospect, at least over the next two fiscal years, of appreciably reducing the current level of U.S. aid in support of the Pakistan defense establishment.

I think it is psychologically very important that we make available to the new Pakistan Government under President Ayub proportionately the same resources in terms of U.S. aid (exclusive, of course, of the military build-up material) as we provided to prior, and less effective, Pakistan regimes. The Ayub Government, as you know, has taken energetic and promising steps in the fields of fiscal, administrative and agrarian reform, which merit our support and encouragement, particularly in this key, initial period.

We can now look forward, I also believe, with greater expectation of success than at any time in the past, to the achievement of a viable settlement of one of the most critical problems in the Southeast Asian area—that of the Indus waters. I am convinced that a settlement of this crucial issue will contribute, more than any other form of persuasion which we might bring to bear on Pakistan, to the possibility of moderating that country’s defense requirements, and hopefully those of India as well. To the extent, therefore, that the U.S. can contribute to an effective Indus waters solution, we shall also be able to make progress toward reducing the burden of defense costs on Pakistan’s resources and on our own and thus shifting emphasis toward attainment of the vital goal for Pakistan of economic development and greater self-support.

Recommendation:

That you approve the attached recommendations of the Working Group on Future U.S. Military Assistance to Pakistan, and instruct U/NSC to assure that the FY 1960 MAP for Pakistan, and Department of Defense guidance for the FY 1961 program, are in accordance with those recommendations.²

Attachment

RECOMMENDATIONS OF THE INTERAGENCY WORKING GROUP ON FUTURE U.S. MILITARY ASSISTANCE TO PAKISTAN³

1. The necessary steps should be taken definitively to complete the U.S. military aid commitment to Pakistan made in the October 21, 1954, aide-mémoire. Only one major step remains: to resolve the issue of the Pakistan Air Force transport squadron.

2. As related to, but not expressly part of, the 1954 commitment, the U.S. should complete, on an austere basis, that portion of the military construction program already initiated, which is in support of the force objectives specified in the commitment, and which the Pakistan military authorities clearly expect from the U.S.

3. The U.S. should not increase the currently established MAP-supported force objectives for Pakistan. (This would assume the continued validity of the roles and missions of the Pakistan armed forces as defined in paragraph 68 of NSC 5701: “forces capable of maintaining internal security, offering limited resistance to external aggression, and of contributing to collective security by those means and by the provision of token forces for collective military operations outside Pakistan.”)

4. Unless there is a marked relaxation of Indo-Pakistan and Afghan-Pakistan tensions, the U.S. should continue, beyond completion of the 1954 commitment, to extend military aid to Pakistan at the minimum level necessary to prevent the deterioration of the Pakistan military capability achieved through assistance programs under the commitment. This minimum level will include the replacement in an orderly and gradual manner, with emphasis on reducing recurring maintenance costs, of attrited and obsolete equipment. Subject to this limitation, it shall not exclude such force improvement as is consistant with military requirements, absorptive capacity, financial availabilities, and political conditions within the area. This policy would also permit release of available U.S.-owned or -controlled local currency to the military budget that may be considered advantageous by the Country Team.

5. As long as Indo-Pakistan and Afghan-Pakistan tensions persist—and in recognition of Pakistan’s need for security forces in East Pakistan, the tribal areas of West Pakistan, and in Kashmir—the U.S. should not press for the reduction of Pakistan’s non-MAP-supported armed forces. However, U.S. representatives should energetically, and to the maximum extent politically feasible, impress upon the Government of Pakistan the importance for Pakistan’s economic future of moderating the increasingly heavy demands of its military program on available resources.

In accordance with paragraph 70.d of NSC 5701, the U.S. should also attempt to reduce the support costs of the Pakistan military establishment by exerting its influence for a more efficient organization of Pakistan’s armed forces, an improved logistical system, and more austere standards of construction and support.

6. In order to try to insure that U.S. assumption of certain foreign exchange costs of maintaining Pakistan’s MAP-supported forces does not simply result in the GOP devoting more of its own foreign exchange resources to the further build up of these or its non-MAP forces, the U.S., utilizing the annual budgetary review as a technique for influencing the Government of Pakistan along the lines of the foregoing recommendation, should seek an understanding regarding the proposed level of total Pakistan defense expenditure (rupees and foreign exchange for both MAP and non-MAP forces) as related to the projected level of total U.S. assistance for a given budget period. Since it would be tactically advantageous to negotiate this understanding as early in the MAP cycle as possible, appropriate instructions should be included in the FY 1961 programing guidance.

7. While exerting influence on the Government of Pakistan to minimize its foreign exchange expenditures for defense purposes, it must be recognized that there will be a continuing requirement for national military matériel and support expenditures not covered by the Military Assistance Program. The use by Pakistan of its limited foreign exchange resources for such purposes will reduce net availabilities for consumption and economic development imports. This fact must be taken into account in planning future U.S. military and economic aid programs.

8. There is a direct relationship between economic growth and the political stability of the present pro-Western regime in Pakistan. While maintaining defense capability not higher than the level recommended in paragraph (4), it is essential that achievement of self-generating economic growth be encouraged. Serious study and consideration must be given to those self-help actions which Pakistan must take, as well as to the provision of economic development aid from U.S. and other sources which will contribute to the objective.

9. Because of their close relationship to a resolution of the onerous problem of Pakistan’s continuing U.S. aid requirements for defense and economic growth, the U.S. should take every possible action to reduce existing tensions between Pakistan and India and Pakistan and Afghanistan. With respect to Indo-Pakistan relations, this will include assistance, above all toward a settlement of the Indus waters problem, but also of the Kashmir dispute and of other outstanding differences. In regard to Afghan-Pakistan relations, the U.S. should continue its efforts to alleviate tensions between the two countries over the Pushtunistan issue and to link them by closer cultural and economic ties.

10. Recognizing that the reduction of tensions and arms limitation are interrelated and interacting factors, the U.S. should actively seek to persuade India and Pakistan to accept a limitation of their military capabilities to present levels (except for modernization resulting from replacement).

This initiative should be undertaken in the following successive stages, each stage to be implemented in the light of the prevailing situation and an evaluation as to the most propitious timing:

(a) Unilateral acceptance by both India and Pakistan, in response to U.S. representations, of the principle of limiting further expansion of military capabilities. Each country would then be informed of the action of the other so as to achieve a de facto limitation without need for a formal agreement.

(b) If tensions are sufficiently reduced as a result of this de facto arms limitation and of the solution of one or more of their outstanding disputes, a more formal arms limitation agreement between India and Pakistan should be sought by the U.S.

(c) Ultimately, when friendly relations are more firmly cemented, the U.S. should explore with the Governments of India and Pakistan whether a redeployment of their armed forces could result in a net reduction of their military establishments without sacrificing the ability of these countries to resist Communist aggression and maintain internal security.

1. Source: Department of State, Central Files, 790D.5–MSP/7–1759. Secret. Drafted by McClelland on June 30. This memorandum was not formally sent to Dillon until July 21, when it was forwarded with a memorandum from Bell, Document 361, and the full report of the Interagency Working Group on Future U.S. Military Assistance to Pakistan. The full report of the Interagency Working Group is not printed; the recommendations are printed as an attachment below.
2. The source text bears no indication that Dillon formally approved the recommendations. At a meeting with Ambassador-designate Rountree on July 30, however, Dillon discussed the recommendations in this memorandum and in the report of the Working Group and indicated his concurrence with them; see Document 363.
3. Secret.