202. Memorandum From the Administrator of the Agency for International Development (Bell) to the President’s Special Assistant for National Security Affairs (Bundy)1
SUBJECT
- Statement on Increased Aid to Laos
During the absence of Prime Minister Souvanna Phouma and Finance Minister Sisouk from Laos, the Souvanna Government and Sisouk personally have been damaged by political attacks based on a recent change in the pattern in U.S. non-project support which opponents have charged represents a reduction in total U.S. economic aid. The Finance Minister is our principal contact on foreign aid matters, upon whose collaboration we are heavily dependent. He is one of the most important political leaders in Laos today and Souvanna’s main lieutenant. Ambassador Sullivan considers it important that when Sisouk returns to Laos in the next day or so, he should be authorized to make the following public statement:
- 1.
- The USG had advised him that the total of U.S. aid to the economy of Laos will not be cut as has been charged, but will be increased in FY 1966.
- 2.
- Even in the non-project area, which is the area of attack, aid to the Lao economy will be larger than in FY 1965.
- 3.
- Furthermore, U.S. developmental aid to speed Lao progress and raise living standards is being substantially increased, with major expansions being planned in education, agriculture and rural development.
Such a statement, which would not contain specific amounts, would only confirm publicly what we have for some time planned to do and what we have privately indicated to the Lao Government. The non-project increase results from the acceptance by all aid donors of major military and civil service wage increases and our advocacy of expanded military and civil operations by the Lao Government. The project aid increases were implicitly promised by President Johnson in his April 7 and subsequent speeches on Southeast Asia development and in our testimony in support of the $89 million supplemental request to Congress for Southeast Asia. The three fields specified are those in which the President has expressed strong interest and in which concrete plans for expansions are well advanced but not yet announced.
[Page 411]In order to maintain direct security operations, contribute to economic stabilization and provide for a major developmental effort, the AID program in Laos will be $7–$10 million larger than originally planned in FY 1966. These additional funds will not be available until AID appropriations are replenished for this and other reasons in January.
I believe the statement we propose to authorize the Finance Minister to make is not a new commitment in the narrow sense but rather the confirmation of previously implied U.S. decisions in an ongoing operation. However, I would appreciate your confirmation so that we may proceed with giving Ambassador Sullivan the authorization he urgently requests.