Foreign Relations of the United States, 1961–1963, Volume XXIV, Laos Crisis

400. Memorandum From the Executive Secretary of the Department of State (Brubeck) to President Kennedy⁰

Washington, undated.

SUBJECT

• Economic Aid to Laos

1. Economic assistance may be our chief and perhaps our only effective instrument in helping Souvanna maintain Lao independence. However, the intentions of the new government are still obscure, especially with the troika principle governing most of its policies. We have done much contingency planning for future economic aid to the new government, but until we know more of its intentions and direction, we are not ready to translate these plans into action. However, pending clarification of the situation we do intend to continue our current project assistance, principally rural development and refugee relief, costing about $1 million per month. A list showing these and tentative future projects is enclosed.¹

2. The question of economic assistance is likely to arise during Governor Harriman’s discussions with Souvanna in Paris or Geneva. At that time Governor Harriman plans to express a general interest in helping Laos economically, but to focus his main attention on getting Souvanna’s views on assistance from the United States and other sources. Governor Harriman would tell Souvanna that we are ready to discuss economic assistance in detail with him and his government at mutually convenient times and places.

3. The contingency project program indicated in the enclosure is expected to meet some of the criteria Souvanna may have in mind. This program is intended mainly to help the central government to extend and strengthen its administration throughout Laos by improving communications and human resources. Governor Harriman does not plan to make any commitments to the Lao with respect to this or any other program.

4. Regarding the difficult question of support for the Lao military and civil budget, we do not propose to make the $3 million cash transfer which may be expected for July. Action on future payments should await a request from Souvanna and an indication of the type of and purposes for assistance he desires; also, we must analyze the assurances he can give that our support will be used and controlled in a mutually satisfactory manner. In any event, past practices will be carefully reviewed in light of the new situation which confronts us.

5. We also plan to press other free world countries, especially the French, British, Australians and Japanese to increase their economic aid to Laos. Secretary Rusk raised this with the French Foreign Minister during his recent visit to Paris.

0. Source: Kennedy Library, National Security Files, Countries Series, Laos: General, 6/13/62–6/25/62. Secret. According to the covering note to Bundy, June 26, this memorandum was requested by Forrestal and was signed for Brubeck by J.T. Rogers of S/S.
1. According to the enclosed list, 1962 fiscal year expenditures were $7.6 million and the estimated 1963 fiscal year expenditures would be $20.2 to $23.2 million. Part of the reason for the jump was that $12 million of prior year expenditures were to be expended in fiscal years 1963 and 1964.