Office of the Historian

387. Memorandum From W.R. Smyser of the NSC Staff to Secretary of State Kissinger, Washington, August 16, 1974.1 2

Washington, August 16, 1974

MEMORANDUM
NATIONAL SECURITY COUNCIL
ACTION

August 16, 1974

MEMORANDUM FOR: SECRETARY KISSINGER
FROM: W.R. SMYSER [WRS initialed]
SUBJECT: Renewed U.S. Economic Assistance to Burma

The Burmese Government last May asked for a long-term, low-interest dollar loan of approximately $2.5 million to purchase equipment for two irrigation projects. It also expressed interest in an additional loan for at least $10 million to procure U.S. manufactured equipment also for the Burmese State Timber Board, the Construction Corporation, and the state oil corporation. This in effect would amount to a resumption of U.S. economic assistance to Burma, which effectively ended in 1969. The Burmese Government at the same time also approached India, Japan, Canada, West Germany, and the PRC for similar aid.

At Tab A is a draft State instruction to Embassy Rangoon, concurred in by the concerned agencies, which would inform the Burmese Government that:

  • — We are sympathetic to the Burmese request, but are constrained by the limited availability of assistance funds at this time.
  • — We would want to channel any U.S. economic assistance that might become available through an international aid consortium, which the Burmese Government may wish to take the initiative in forming.
  • — We would be willing to discuss the Burmese request further with the Burmese delegates to the annual IBRD/IMF meeting next month in Washington.

The State cable also informs Embassy Rangoon — but would not pass on to the Burmese Government at this time — that we believe Burma’s economic assistance requests would be strengthened by serious Burmese efforts to undertake basic structural reform of its ailing economy.

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I agree with the State cable as drafted — in particular that any renewed U.S. economic assistance to Burma should be channeled through a multilateral aid mechanism and should be linked in some appropriate fashion to structural reform of Burmese economy.

I also think it would be good for us to respond as positively as we can to Burmese overtures, even though we cannot do much.

Recommendation:

That you approve the State cable at Tab A.
Approve [BS initialed]
Disapprove

Concurrence:
Mr. Ellerman

  1. Source: Ford Library, National Security Adviser, Country Files, Box 2, Far East, Burma. Confidential. Sent for action. Scowcroft initialed his approval of the State cable as drafted. Concurred in by Ellerman. Tab A, the attached draft telegram, was sent to Rangoon as telegram 181158, August 18. (National Archives, Record Group 59, Central Foreign Policy Files) On August 17, Smyser sent Scowcroft another memorandum arguing for the superiority of working through an international aid consortium rather than giving bilateral aid to Burma. (Ibid.)↩
  2. Smyser asked Kissinger to approve a Department of State cable regarding renewed economic assistance to Burma.↩