486. Memorandum for the Record0
SUBJECT
- Meetings with the President on August 19, 1963, FY ′64 Aid Program for Laos
The following were present at the meeting, which was held in the Cabinet Room at 5 p.m.: Under Secretary Ball; Under Secretary Harriman; Aid Administrator David Bell; Messrs. Janow, Poats, Niblock, Koren, Sloane, Solbert, Hansen, Forrestal and Berle.1
Mr. Janow (FE—AID) presented the proposed program outlined in Aidto X–200 (copy attached).2 He described the dangerous inflationary situation in Laos which has been brought about as a result of recent hostilities and the resulting increases in the military budget. An IMF team which recently returned from Laos has estimated that the situation is becoming critical, and that the measures of the type outlined in the proposed FY ′64 program must be implemented quickly if economic chaos is to be averted.
Mr. Janow described the economic consequences of the fourfold rise in the unofficial exchange rate of the kip.
The President asked whether we knew approximately how much was involved in capital flight from Laos. Mr. Janow estimated it at between $8 to $10 million. The President also asked what our British and French allies have contributed. Governor Harriman replied that the British had promised $2.8 million and the French claimed they were spending $8 to $9 million on their military and educational programs. Governor Harriman also observed that both the French and British believed Laos was a U.S. problem resulting from our imprudent actions in the past.
The President expressed interest in exploring the possibilities of getting the Thais to contribute to Laos, thus reducing the dollar drain incurred by the U.S. expenditures in Thailand for Laos assistance.
The President stated he wanted someone in the finance ministry who could exercise control over the Lao budget. He should be a man of some financial experience and a discussion ensued between Governor Harriman and Mr. Ball whether a French or Swiss national would be more satisfactory. Mr. Janow suggested Dr. A. Guetta, an Italian IMF man on the Paris staff, who had assisted in making the original IMF study and had expressed an interest in returning to Laos.
[Page 1049]The President also suggested that an American expert be in charge of open market dollar transactions. Governor Harriman pointed out these operations would satisfy kip requirements for U.S. projects which have averaged $4 million annually.
[Here follows a brief discussion of other matters.]
- Source: Kennedy Library, National Security Files, Meetings and Memoranda Series, NSAM 259. Secret.↩
- According to Kennedy’s appointment book, the meeting ended at 5:45 p.m. (Ibid., President’s Appointment Book)↩
- See footnote 2, Document 485.↩