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

383. Telegram From the Department of State to the Embassy in Pakistan¹

Washington, March 14, 1960—7:25 p.m.

2247. Karachi’s 1964² and 1999.³ In Finance Minister Shoaib’s visit February 24 to March 8 he focused attention on Pakistan economic problems in discussions with Dillon, Jones, Bell, and Martin (E) in Department; Cabinet members Anderson, Benson, and Mueller; heads ICA, DLF and Exim; and Irwin in Defense.⁴

Besides topics in reftels Shoaib stressed (to Dillon) unresolved vital questions in Indus settlement noting Indian desire for nearly 10 million acre feet water from Western rivers plus dams on upper reaches and lack of agreed program for transition period. Told Jones generally understood that US and other aid to Indus should be additive to “normal”; Dillon in reply to similar statement said one possible source additional assistance might be sale of grain stored in Pakistan.

Shoaib urgently requested Jones help obtain last year’s Defense Support level ($95 mil) and received Dillon’s promise to consider possibility increase out not before June when amount of funds remaining could be determined. Conversation with Mueller included discussion difficulties still faced by private investors.

Jones and others impressed by Shoaib’s sincerity and rationale of presentation and his ability to guide Pakistan through difficult economic adjustment period.

Herter

1. Source: Department of State, Central Files, 790D.5–MSP/3–1460. Confidential. Drafted by Wilcox, cleared in substance with the Department of Commerce, and approved by Spielman. Repeated to New Delhi, Dacca, and Lahore.
2. Telegram 1964, February 23, reported the topics that Shoaib intended to raise during his upcoming trip to the United States including: the proposed Indus Waters treaty, Pakistan’s requirement for counterpart funds, its balance-of-payments problem, and the outlook for private sector development. (Ibid., 790D.5–MSP/2–2360)
3. Telegram 1999, February 26, a joint Embassy–USOM message, recommended that every effort be made now to restore the fiscal year 1960 Defense Support figure for Pakistan to $95 million. (Ibid., 790D.5–MSP/2–2660)
4. A memorandum of Shoaib’s conversation with Dillon on March 3, drafted by Spielman, is ibid., Secretary’s Memoranda of Conversation: Lot 64 D 199. Memoranda of the other conversations which are referred to in this telegram have not been found.