Foreign Relations of the United States, 1961–1963, Volume XIX, South Asia

18. Memorandum From the Under Secretary of State for Economic Affairs (Ball) to President Kennedy⁰

Washington, May 1, 1961.

SUBJECT

• Report on India Consortium Meeting

The subject meeting convened on April 25 to consider the amounts required by India both to meet its payments in 1961-62 and 1962-63 and to provide for the placement of new orders during that period.

On the opening day the United States made its offer of $1 billion of aid on the terms and conditions approved by you on April 21. Because proposed commitments by other countries, particularly Germany, were insufficient to total the needed remaining $1.1 billion believed by the U.S. to be required from these nations, the meeting recessed until May 31. In the interim, these other participants will, in the light of the large offer of the United States, reconsider their commitments. The press release on the adjournment of the meeting, however, merely stated that the participants had met, examined the Indian program, decided that it offered a reasonable basis for undertaking commitments, and adjourned to consider what each could do.

The true reason for the adjournment was the fact that commitments offered by others than the U.S. and the IBRD fell about $500 million short of what is generally believed necessary to move the Indian program ahead. While most other participants offered commitments close to our expectations, West Germany was about $300 million short in what we have believed it capable of providing. It offered to make available $331 million, about half of which would refund existing Indian debts to Germany. Furthermore, even this grossly inadequate contribution was to be extended on very hard terms rather than the softer terms and conditions considered necessary in the Indian situation.

The United Kingdom offered $204 million, the Japanese $80 million, and the IBRD $400 million. The Canadian offer of $36 million was not up to expectations but we believe it can be increased. It is also believed that the U.K. offer can be increased.

Before the Consortium reconvenes on May 31 the following actions are being undertaken:

1) We are instructing our Embassies in the Consortium countries to advise their host Governments at the highest levels of the importance we attach to a successful outcome for this meeting and of our interest in seeing that our large offer is matched by similar action on their part.

2) We shall endeavor to seek commitments from France, Austria, Denmark, Sweden, and Norway who now attend the meeting as observers rather than participants.

3) The IBRD will be urged to bring its influence to bear on officials in the participating countries. We are hopeful that Mr. Eugene Black will personally make the necessary contacts.

In addition we will recommend that you discuss both the Indian and Pakistan Consortium Meetings with the Prime Minister of Canada during your visit to Ottawa. We believe that such an approach may be an important element in influencing the Canadians to extend additional resources.

It is our hope that these actions will result in more adequate commitments by others and permit us to proceed with our offer.

George W. Ball

0. Source: Kennedy Library, National Security Files, Countries Series, India, General, 5/1/61-6/15/61. Confidential. The memorandum was sent under cover of note from Executive Secretary Battle to the President’s Special Assistant, Ralph A. Dungan.