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FOREIGN RELATIONS OF THE UNITED STATES 1964-1968, Volume XXV South Asia
Department of State |
480. Telegram From the President's Special Assistant (Rostow) to President Johnson in Texas/1/ Washington, January 12, 1968, 1638Z. /1/Source: Johnson Library, National Security File, Country File, Pakistan, Vol. VIII, Memos, 8/67-4/68. Confidential. Received at the LBJ Ranch at 11:45 a.m. CAP 80307. For the President. Subject: Wheat for Pakistan. You will recall that you authorized us to accept President Ayub's offer of a 500,000 ton wheat deal, 100,000 tons in CCC sales and 400,000 tons on PL 480 terms. That decision was conveyed to Ben Oehlert. Last night Oehlert advised us/2/ that (1) he understood you to instruct him to put together a program totalling one million tons of wheat (not 500,000); (2) he has put together a package proposing a one million ton program--all PL 480--to cover the rest of calendar '68; and (3) he wants to give this proposal to Ayub at 9:30 tonight Ranch time. /2/Telegram 2692 from Rawalpindi, January 11. (National Archives and Records Administration, RG 59, Central Files 1967-69, AID (US) 15-8 PAK) Everybody wants to move as much wheat to Pakistan as possible but we need organized recommendations on two questions raised by the Oehlert proposal. First, do we want to bless the calculations of wheat requirements contained in Oehlert's memorandum? (Once we sign on to these, we will have pretty well settled the limits on our 1968 PL 480 program.) Second, do we want to offer Ayub the full million tons on PL 480 terms? (This proposal involves a one-to-ten ratio between CCC sales and PL 480, rather than the one-to-four ratio represented by the proposal you approved last month.) We know of no reason why a delay of a day or two to pull the government together on these questions should cause any problem in Pakistan. Therefore, we have instructed Oehlert not to deliver his proposal until he gets further instructions. We expect to come to you for a decision on this matter in the very near future. But I thought you would want to know how we are handling Oehlert's request. If you wish, of course, we can simply tell him to go ahead now./3/ /3/A handwritten note on the telegram by Jim Jones reads: "I said I'd give 400 and sell 100 and do it again--give 800 sell 200. But I would give all if necessary." The quote is apparently the President's response to Rostow's comments. Another handwritten note reads: "Jones told Rostow."
481. Letter From Secretary of State Rusk to the Ambassador to India (Bowles)/1/ Washington, January 19, 1968. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 1 INDIA. Secret. Drafted by Schaffer in NEA/INC on January 11. Dear Chet: Many thanks for your letter of December 22/2/ reviewing the background of Indian defense planning. I certainly agree that in judging Indian activities in the arms field we must not allow ourselves to be governed by our exasperations with India's uncandid behavior. I think I can say in all sincerity that these exasperations, vexing as they were, have not influenced our consideration of the issues involved. /2/A copy of Bowles' December 22, 1967, letter to Rusk is ibid. He also sent a copy to McNamara who responded on January 17 along the lines of Rusk's response. He too felt that the 1965 war had changed the situation on the subcontinent and that the 1964 Memorandum of Understanding with India had been overtaken by events. From that perspective, McNamara felt that the "SU-7 incident was most unfortunate and we must make it clear to the Indians that such actions seriously inhibit our ability to support legitimate economic and military requirements." (Washington National Records Center, RG 330, OSD Files: FRC 72 A 2468, India 1967) In discussing the buildup of the Indian Air Force, you suggest that acquisition of the SU-7 and other aircraft is in accordance with the Indian 5-year defense plan (since stretched to 7 years) which was adopted with our approval in 1964. As you know, the Indians both here and in New Delhi have argued from this position. I recall that it was the burden of one of B.K. Nehru's last calls on me. B.K. went so far as to produce the plan itself to demonstrate that we have no reason to object to the SU-7s. The argument would have considerable force if we could conclude that nothing significant had happened since May 1964 to call into question the relevance of the Plan in the context of Indo-American relations. I cannot agree that this is the case. The Indo-Pak conflict in 1965 has fundamentally changed the situation and has led us to a basic recasting of our arms supply policy toward the subcontinent. The 1964 Defense Plan, developed against a background of significant US assistance to the strengthening of India's defenses, cannot at this late date determine our approach to Indian defense expenditures. This fundamental difference between 1964 and 1968 is further underscored by the mood of Congress. The lawyers are still studying the Conte and Symington Amendments and we have not yet come to a definite conclusion as to how we will interpret them in the administration of our foreign aid programs. What is definite, however, is that both amendments reflect the distaste of Congress toward the acquisition by developing nations of advanced weaponry and a determination on its part to prevent indirect American financing of such weapons. I am reasonably certain that were we to try to ignore history and the mood on the Hill and seek to justify Indian arms acquisitions in terms of the conditions which prevailed in 1964 our effort would be a non-starter with Congress. I think that influential Congressmen, perhaps even more than we here, recognize that the old pre-1965 era in Indo-American relations is over and that we must work toward a new relationship. I would hope that one of the achievements in working out this new relationship will be a restoration of candor between the two sides and a frank discussion of where India is going in the defense field. Our telegram 90381/3/ spells out at some length how important it is, in terms of the administration of FY68 funds as well as our discussion with Congress of the FY69 aid bill, that we reach a better understanding of what the Indians mean to do. /3/Document 479. I hope that you will devote all your skill toward developing a meaningful dialogue and, particularly, to relating it to the need for restraint on the Indians' part in total defense spending. With best regards,
482. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, February 2, 1968, 7 p.m. /1/Source: Johnson Library, National Security File, Memos to the President, Walt W. Rostow, Vol. 59, February 1-6, 1968. Confidential. Mr. President: Herewith a longer get well message to Ayub./2/ It mentions both the wheat and the tanks you discussed with him at the Karachi airport. /2/The message approved by the President was transmitted to Rawalpindi on February 3 in telegram 109738 for delivery to President Ayub. (National Archives and Records Administration, RG 59, Central Files 1967-69, POL 15-1 PAK) On February 16 the Embassy confirmed reports that Ayub had suffered a heart attack. (Telegram 3421 from Rawalpindi; Johnson Library, National Security File, Country File, Pakistan, Vol. VIII, Cables, 8/67-4/68) On wheat we are moving ahead with the first 500,000 tons you discussed. We will go ahead with the second 500,000 tons as soon as the first agreement is signed. On tanks the Paks have approached Belgium--with our blessing--to accept the Belgian offer of reconditioned tanks at a reasonable price. In the meantime, however, the Belgian Foreign Office has caught wind of what their defense ministry is doing and is trying to get the Prime Minister to revoke the offer. If they succeed, the Italians are panting to step into the breach. However this comes out, it looks as though Pakistan will get the tanks. But I think it would be unwise for you to get very far out on a limb in promising them. W. W. Rostow/3/ /3/Printed from a copy that bears this typed signature. Approve/4/ /4/None of the options is checked.
483. Telegram From the President's Special Assistant (Rostow) to the Ambassador to India (Bowles)/1/ Washington, February 10, 1968, 2349Z. /1/Source: Johnson Library, National Security File, Country File, India, Vol. X, Cables, 8/67-2/68. Secret; [text not declassified]. CAP 80402. For Ambassador Bowles from Walt Rostow. We were delighted to receive your message reporting Morarji Desai's assurances on the Conte amendment./2/ It is very good to know that we will not have a serious problem on this score at least through the end of the fiscal year. /2/In telegram 9881 from New Delhi, February 1, Bowles referred to the assurance offered by Desai that no contracts or agreements for acquisition of military equipment of the type envisioned by the Conte Amendment had been entered into or were contemplated from January 2 to June 30, 1968. (National Archives and Records Administration, RG 59, Central Files 1967-69, AID (US) 5) As you know, both the Conte and the Symington Amendments reflect deep concern among the Congress and the people that we exert all the influence we can against arms races between poor countries, particularly Latin America and South Asia, and against diversion of resources from economic to military purposes. I know that nobody feels these concerns more deeply than you do. I would hope, therefore, that this successful experience on the Conte issue can be followed up with a special effort to make it clear to Morarji that our ability to come through with the economic aid we all agree India needs depends heavily on the shape of the defense budget he will announce on February 29. The President has just sent to the Hill an aid request $600 million higher than what he got last year despite (1) serious risk that it will be sharply cut, and (2) crying domestic needs for which he has a better chance of getting the money he requests. To make this act of courage worthwhile we will need equal courage in Delhi. I know that U.S. influence on Indian budget decisions is a very touchy problem. Still, I think it is very important that we try to find a private way to get across one simple fact of life: If the Indians could possibly manage a decrease in the defense budget this year, we would have an additional major weapon in fighting for the foreign aid appropriation we need. If, on the other hand, there is a major increase, we will put a powerful weapon in the hands of those who would have us abandon India to her fate. I realize that Morarji has already ruled out a decrease in a public speech, but I wonder whether your personal intervention might not get him to reconsider. In any case, we should make certain he is absolutely clear on the importance of restraint in terms of the situation here. Once the budget is announced, I would hope we could follow through with the general defense talks that you and Morarji have discussed in days past. The Conte-Symington business is not, I am convinced, a transitory phenomenon. Both we and the Indians are going to have to get used to sharing our knowledge and our planning on these delicate matters. The sooner we start, the better. My best to you and Steb. I know things must be hectic with UNCTAD in town. Elspeth sends her regards.
484. Memorandum From the President's Special Assistant (Rostow) to President Johnson1 Washington, February 20, 1968, 3:15 p.m. /1/Source: Johnson Library, National Security File, Country File, Pakistan, Vol. VIII, Cables, 8/67-4/68. Secret. SUBJECT Ben Oehlert has had a feeler/2/--which he thinks is premeditated and serious--from one of the caretaker military leaders who is minding the store in Pakistan while President Ayub recovers from what we now believe were two successive heart attacks. The suggestion is that Ayub would make a visit to Britain and the United States during his convalescence. /2/In telegram 3451 from Rawalpindi, February 18, Oehlert reported that Defense Minister Khan had suggested that the issue of Peshawar could best be decided by Ayub and Johnson in a face-to-face meeting that might take place in the United States during a trip planned as a part of Ayub's convalescence. (National Archives and Records Administration, RG 59, Central Files 1967-69, POL 15-1 PAK) The public reason for the trip here would be medical, but the private reason would be a face-to-face negotiation with you about renewal of our important intelligence facility at Peshawar. Oehlert reports he was "completely non-committal about a U.S. trip both generally and during any particular time frame." He has asked for guidance on whether we would welcome such a trip and, if so, when. At Tab A, for your approval, is a draft reply which says: --We would be happy to provide Ayub with any medical help he wants in the United States. --The President would want to see Ayub. --For Oehlert's information, we would prefer a private visit as part of Ayub's recuperation, but we would try to arrange an official visit if Ayub strongly prefers it. --In any event, we want to avoid the impression that we are deeply worried about the Peshawar negotiation. (The renewal need not be effective until the end of June. We should try to keep our cool as long as we can.) I think this is about right. Ben is certain to deliver the message with the warmth I know you would want. Walt Approve message/3/ /3/Johnson checked this option and added the handwritten notation "as amended." He amended the proposed message to delete a reference to possible scheduling problems. The gist of the message remained as outlined in this memorandum and was sent to Rawalpindi in telegram 118643, February 21. (Ibid.)
485. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, February 28, 1968, 1:45 p.m. /1/Source: Johnson Library, National Security File, Country File, Pakistan, Vol. IX, Cables, 5/68-11/68. Secret; Exdis. SUBJECT In the attached (Tab A)/2/ Katzenbach recommends that you authorize formal notice to Italy that we approve their sale of 200 M-47 tanks (100 now and 100 later) to Pakistan. This would meet the immediate need Ayub discussed with you at the Karachi airport. McNamara and Gaud join in the recommendation, and Luke Battle has raised the general proposition of a third-country sale with Senator Symington's Subcommittee of the SFRC (with Fulbright in the room) and got no objection. /2/Reference is to a February 27 memorandum from Katzenbach to the President entitled "Approval of Italian Sale of M-47 Tanks to Pakistan." (Ibid.) This is the result of a lengthy effort to get Ayub his tanks without sinking the arms policy for South Asia we announced last April and thereby provoking another storm on the Hill which could scuttle the Aid Bill. The Italians would make the sale pursuant to a general franchise we are negotiating under which they will be our agents in Europe for buying, rehabilitating, and reselling used tanks. The preliminary price ($40,000-$50,000) quoted to the Paks is reasonable. In return for your approval, Ayub has promised to scrap old tanks on a one-for-one basis, to give us a full rundown on their present armor (including their Chicom tanks), not to buy any more Chicom tanks, and not to buy any more tanks from anybody without consulting with us. At Tab B/3/ are State's findings that neither the Conte nor the Symington Amendments--dealing with poor-country arms purchases--affect this sale. /3/Not printed. I recommend you approve. One issue of tactics remains. The present thinking in State and Defense is to tell Ben Oehlert that you have approved 200 tanks but authorize him to tell Ayub about only 100. The argument is that we are better off to see how he performs on his end of the bargain before telling him about the second tranche. There is some merit to this case, but the effect on Ayub would be considerably different if we told him about all 200. He has dealt with our bureaucracy for a long time; he would know there is a connection between the larger number and your Karachi conversation. Walt Approve Katzenbach memo /4/Johnson checked this option.
486. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, February 29, 1968. /1/Source: Johnson Library, National Security File, Country File, Pakistan, Vol. VIII, Memos, 8/67-4/68. No classification marking. SUBJECT In the attached (Tab A),/2/ Messrs. Gaud and Zwick recommend that you approve an AID loan to Pakistan of $115 million. Joe Fowler concurs. /2/Attached were a February 20 memorandum from Gaud to the President entitled "Production Loan to Pakistan," and a February 24 memorandum from Zwick to the President entitled "Proposed $115 Million Development Loan to Pakistan." The loan is to finance irrigation equipment, pesticides, industrial raw materials, and other goods necessary to maintain the excellent economic performance Pakistan has shown for the past five years. Together with the $25 million supplied last June, this will meet our $140 million Consortium commitment to Pakistan for FY 1968. The timing is particularly urgent because the Paks have agreed to undertake a new liberalized import policy effective tomorrow (March 1). They need the foreign exchange cushion provided by this loan, both to quiet fears that they couldn't stand a run and to meet any pressures on foreign exchange which do arise because of the new ground rules. Ben Oehlert is afraid that if we don't get a firm approval to the Paks today, they may scuttle the import reform, with serious damage to our relations with Ayub. I recommend you approve. At Tab B is a State/AID paper/3/ advising you that in their judgment there is no requirement that you take any step to withhold aid from Pakistan under the terms of the Symington Amendment which deals with military expenditures by poor countries. /3/Not printed. Walt Approve package/4/ /4/Johnson checked this option.
487. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, March 4, 1968, noon. /1/Source: Johnson Library, National Security File, Country File, India, Vol. XI, Memos and Miscellaneous, 2/68-10/68. Secret. SUBJECT In the attached Messrs. Gaud, Zwick and Fowler you approve a U.S. role in a debt relief package for India./2/ The World Bank has proposed a relief package of $100 million per year for three years. Our share would be less than $9 million per year. /2/Memorandum to the President from Zwick, February 27. In short, in return for a minor rescheduling of a 1951 wheat loan to India, this exercise would reschedule a good part of the backbreaking load of European debt the Indians now face. There must be such a rescheduling of European debt if we are to avoid a situation within five years in which all our aid to India will go to pay back European loans. Charlie Zwick's memorandum (Tab A) is a good, concise summary of the proposal. It requires no action by Congress. You will note in the Zwick memorandum that we have some evidence that India is making another arms deal with the Soviets. Although as a matter of law the Conte Amendment does not apply to debt relief, we would make it very clear that any suggestion of a violation of the letter or the spirit of the assurance Morarji Desai has given us to satisfy the Conte Amendment will affect our ability to provide debt relief just as it will affect all other forms of aid. I think this gives us a defensible position on the Hill if the Indians do something stupid. We still have plenty of time to reverse ourselves on debt relief if need be because the first repayments are not due until June. I recommend you approve. This one has a very short fuse. The debt relief meeting began today in Paris. The Japanese--who would have to forego about $20 million a year--are taking a very strong position against the principle of debt relief and they have some support from the Italians. The World Bank needs our help if there is to be any chance of turning the Japanese around. If you approve, we need to let our negotiators know this afternoon. My apologies for the rush. We have spent almost a week digging this out of the Treasury. Walt Approve package/3/ /3/Johnson checked this option.
488. Telegram From the Department of State to the Embassy in India/1/ Washington, March 16, 1968, 1823Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 12-5 INDIA. Secret; Priority; Exdis. Drafted by Coon on March 14; cleared by Battle, Heck, Wolf (G/PM), Clark (AID/PPC), Williams, Warnke, and in draft by Hamilton, Handley, Spain, Sober, and Folger; and approved by Katzenbach. Repeated to CINCSTRIKE and Rawalpindi. 131690. Ref: (A) New Delhi's 10954;/2/ (B) New Delhi's 10955./3/ For the Ambassador. Subject: Conte/Symington Amendments. /2/In telegram 10954 from New Delhi, February 5, Bowles reported that the Indian Government confirmed reports that it was contemplating the purchase of an unspecified number of MIG-21 fighters from the Soviet Union to compensate for delays in production of MIGs in India. The Embassy raised the issue of the Conte Amendment, and the government recognized that assistance to India might have to be reduced as a result of the legislation. Accordingly Bowles suggested that $25 million be withheld from pending production loans to India to offset what he stated was the maximum estimate of the cost to India of no more than 25 MIG fighter planes. (Ibid.) /3/Bowles sent telegram 10955 from New Delhi to Rusk on February 5 to argue that the United States should not overreact to the discrepancy between the assurances offered by Morarji Desai and the subsequent revelation that the Indian Government intended to purchase additional MIG fighters from the Soviet Union. Bowles urged that concern over the discrepancies should not be allowed to obscure U.S. national interest in supplying urgently needed economic assistance to India. (Ibid.) 1. We agree with thrust of reftels that India has reasonable case under Symington amendment. On other hand, as reftels suggest, application Conte amendment poses complex problems. A fundamental difficulty is that while we are committed by law as well as policy to relate our economic aid to recipient's decisions on defense expenditures, GOI appears equally committed to view that our economic aid gives us no charter to know or question its decisions in security field. We respect your judgment that if GOI is confronted with stark choice between forefeiting our aid or submitting to what it sees as our dictation on basic security decision, GOI will choose former. Such a confrontation as you rightly point out could have incalculable consequences. Nevertheless, it may not be easy to avoid. 2. Part of difficulty arises from evident failure of GOI to appreciate seriousness of our commitment. Relation we draw between economic aid and recipient's defense program has become a matter of law, as expressed in Conte and Symington amendments. We have assured Congress we take these amendments seriously and intend to implement them in spirit in which they were legislated. Furthermore, we are planning on probability that these amendments or others like them, possibly more stringent, will be with us for some years to come. Thus cosmetics and figleafs with which GOI has approached problem so far (insofar as it has even recognized problem existed) are totally inadequate basis our relations. 3. GOI has not tailored its actions to any perceptible degree to meet reality of Conte and Symington amendments. Evidence of Indian bad faith--no matter how unintended or necessary from GOI's point of view--is far more troublesome here than any transaction of which we are informed. Thus there has been erosion of our confidence in value of GOI's assurances which began with SU-7 "misunderstanding" and has been compounded by need to "amend" Morarji's recent assurances./4/ It simply will not do to offer "amendments" whenever we discover behavior doesn't correspond to words. What assurance have we that GOI will not adopt such tactics in future? One instance involving substantial U.S. aid commitment on false basis could well sink all aid to India. /4/On February 28, Hamilton sent a memorandum to Rostow in which he noted that reports had been received indicating that, despite Desai's assurance that India would make no purchases of sophisticated weapons between January 2 and June 30, an Indian mission to Moscow had reached an agreement to buy 25 MIG-21 fighter planes at a cost of $37 million. (Johnson Library, National Security File, Country File, India, Vol. XI, Memos and Miscellaneous, 2/68-10/68) 4. We know you have these problems very much on your mind and will continue to do your best to persuade GOI to improve. But record suggests that since it is USSR, not U.S., that supplies bulk of India's defense imports, GOI is likely as matter of conscious policy to find ways to avoid leveling with us about specific procurement activities in which we are not directly involved. On the other hand, prospects should be more hopeful of developing and sustaining a reasonably candid and useful dialogue with GOI on its overall defense spending and force levels. Your recent conversations with Swaran Singh and B.R. Bhagat reinforce this judgement. If this is case, we should consider adjusting our tactics to aim for a relationship which might attain this minimum objective. 5. As we see it eventual objective would be achievement of a workable understanding with GOI based on Indian recognition of legitimacy of our interest, as major supplier of economic and food aid, in India's gross force plans and defense spending levels, including foreign exchange outlays for sophisticated weapons systems. As long as India stayed within such mutually agreed gross force and defense spending levels we would resign ourselves normally to take up with GOI only those individual defense procurement transactions in which we were directly involved, either because we were supplier ourselves or because we exercised control over third country supply. 6. Strictly FYI, we have been considering possible approaches to immediate problem of how to apply Conte amendment to India partly in context of their potential contributions to achievement this relationship. Following possible options have not been fully staffed out. They are suggested here for your background and to elicit your comment. No decision has been taken to pursue any of them. (A) Formal Conte Waiver: We could recommend formal Presidential waiver under Conte amendment, either now for FY '68 aid or later, say for FY '69. This course poses number of problems including fact that law as presently written would require determination that Soviet equipment in Indian hands is vital to U.S. national security. Do you think waiver which would become public would (a) serve our overall purposes, including that of holding down Indian defense expenditures, or (b) create political problems for Indians? (B) Deduction under Conte amendment: We are considering your suggestion to dock India $25 million this fiscal year. We recognize some such action may prove only feasible way to handle immediate problem; nevertheless, in evaluating available alternatives, believe following factors ought to be considered: (1) The amount deducted will become matter of public knowledge and final responsibility for determining said amount rests with us not GOI. We must of course act on basis most reliable information available. To extent our sensitive intelligence data differ from those supplied by GOI or available publicly, we may face numerous sticky problems arising from need to avoid jeopardizing sources, from desire to avoid public speculation as to what GOI is really up to, from questions of GOI good faith, etc. (2) Deduction under Conte amendment could tend to fix ceiling for annual aid level to India and make it more difficult to carry out our present plan for additional commitments to India at end of fiscal year. (3) More fundamentally, we are somewhat troubled by possible long-term effects on Indian attitudes of formal invocation Conte amendment, even though amount of penalty may not be large enough significantly to affect development program. We understand that reasons for our pressure on Indian defense spending may not have gotten fully across, in sense that many Indians assume our pressure reflects interest in maintaining regional Indo-Pak arms balance accompanied by lack of interest or sympathy for India in its defense against China. To extent this generalization valid, seems to us that formal action under Conte amendment could strengthen misconception we no longer cared about Indian security problems with China; result could be continuing erosive effect on Indian confidence in U.S. and on value India places in maintaining good relations with U.S. as hedge against China. This could relate to our future ability influence India on NPT, moderation toward Pakistan, and other issues with security implications. Please comment. End FYI. 7. Regardless of course of action we decide on, it is clear that MIG deal has seriously complicated our relations. We realize GOI had considered deferring MIG deal and decided against it but believe it possible GOI might reconsider if it were fully apprised of nature of our concern and especially of our objective as defined para 5. 8. Accordingly you should approach GOI at appropriately high level along following lines, unless you have serious reservations you wish discuss with us first. (Presume you will want to make your approach at Ministerial level, perhaps at joint meeting of Deputy PM and Defense Minister, which would have advantage of removing any doubts on our side that MOD has been short-circuiting Finance Ministry.) (A) USG remains committed to support of Indian economic development. India is in fact receiving increasingly high proportion of total US aid resources. For FY '69 we hope obtain resources from Congress which will constitute substantial increase over current FY level for India and provide major stimulus toward level of economic activity in India we have both been working towards for many years. (B) We remain as convinced as we were in 1963 and 1964 that US and India share a vital interest in opposing the hostile ambitions of Communist China. We recognize India's role as defender of a long and sensitive border with China. We therefore fully appreciate India's need for an adequate defense establishment. (C) We are also concerned that Indian expenditures on defense acquisitions can cut into resources available for development and to that extent undercut resources we provide. Furthermore, Conte and Symington amendments have incorporated into law principle that we must relate our aid to recipient's defense program, in sense of precluding us from indirect support of certain defense expenditures. (D) We shall continue to want as much detailed information as GOI feels free to give us that will help us to administer Conte and Symington amendments, although of course we shall have to make final determinations ourselves on basis all information available to us. But we would like at least to work out understanding, based on GOI's recognition of legitimacy our interest, as major supplier of economic and food aid, on India's gross force plans and defense spending levels, including foreign exchange outlays for sophisticated weapons systems. We would normally raise with GOI only those individual defense procurement transactions in which we were directly involved, either because we were supplier ourselves or because we exercised control over third country supply. (E) An immediate problem we face arises from need for time in which to seek better relationship which hopefully would not bring Conte/Symington amendments into play. This constrains us request GOI to place a temporary moratorium on post-January 2 agreements for acquisition sophisticated military equipment. (This would include specific proposed transaction AID Director Lewis recently discussed with Finance Secretary Patel.) Duration of moratorium would be short, several months at most, and purpose would be limited to that of giving us time to work out problem in its broad outlines, and to try to establish understanding as to how we can together best manage question of aid-defense relationship for longer pull. (F) Favorable GOI response to this suggestion will be extremely helpful in context immediate decisions we face regarding pending program loan and PL 480 agreements, which we hope we can proceed on shortly. If GOI cannot in all conscience respond favorably we shall do our best to keep our relations on an even keel, but task will be considerably more difficult, as well as time-consuming. 9. FYI. We intend to call in Ambassador Jung in the next couple of days to convey same message here. Rusk
489. Telegram From the Embassy in India to the Department of State/1/ New Delhi, March 20, 1968, 1524Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 12-5 INDIA. Secret; Priority; Exdis. 11697. Ref: State 131690./2/ /2/Document 488. 1. Morning March 20 I met with Morarji Desai to discuss problems arising from Conte amendment and particularly our concerns as outlined in reftel. In order to make sure Morarji thoroughly understood pertinent points we prepared carefully sanitized version of reftel, including language best calculated to emphasize (a) our understanding of GOI predicament, (b) severe legal restrictions under which we are now operating, and (c) genuineness of our efforts to find mutually acceptable way out of impasse. 2. Morarji started to read the document, but soon stopped to challenge what he termed "US right to know" Indian force levels and other military matters. He asserted "One thing must be clear: no matter how much money you give us, we can not compromise our right as a sovereign nation to make our own decisions regarding military defense. If this has become a condition of US aid, we shall have to get along without it." 3. I urged Morarji to finish reading before expressing his views, which he did with exception of single comment challenging suggestion that India may be motivated to maintain good relations with USG as "hedge against China." Morarji asserted that basis for Indo-US relations is much broader than this: we are two democracies struggling to sustain common values and objectives, etc. 4. After reading entire "cable" carefully, Morarji made following points: (A) USG must recognize India is faced with major military threat. Two years ago, contrary to our repeated prediction and assurances, Pakistan, supported by Communist China, attacked India. China is now starting a campaign of organized insurgencies, through north Burma, toward east India and GOI views this as a continuing and growing threat. Consequently, highest single priority for GOI is defense and it must be sole judge of what is required. (B) USG must know that India is not militaristic nation bent on conquest. On contrary, with India's massive developmental needs in mind, he personally begrudges every rupee going into military expend- itures. He has been under heavy pressure from Defense Ministry Sharply to increase present budgets but has flatly refused to do so. However, whether we continue aid or not, India will maintain present force levels, which are minimum required for its defense. (C) Morarji stressed that even those Cabinet members friendly to us are adamant on this subject. For instance, there had been strong opposition to acceptance of our offer to help India with military cost-effectiveness on grounds this would be entering wedge by USG and would lead to US influence over GOI military development and priorities. (D) In 1963 and 1964 GOI had hoped and even assumed US would be willing help modernize India's defense establishment. However, because of Pakistani pressure we had not only refused to assist India, thereby forcing GOI to turn to USSR, but had implied that we could offer no guarantee of support in case of non-nuclear Chinese-Pak attack. Even now, he said, in spite of Pak flirtation with China, we are helping Pakistan, directly and indirectly, "through Iran and other sources." This assistance is for a Pak military establishment that is openly designed to fight India. Moreover, although SEATO and CENTO have no relevance to present Asian realities we still speak of Pakistan as our "ally." (E) In regard to Indian determination to withstand pressure on what it believes to be its sovereign right to make its own decisions, GOI, he said, had taken identical position with USSR when Soviets suggested that if India did not sign NPT they would have to review entire aid commitment. GOI had refused to knuckle under to Soviets on this point and now must react similarly to USG's request, which would be interpreted as effort to control levels and patterns of Indian defense expenditures. (F) Morarji added that he fully understands pressures under which President Johnson, Secretary Rusk and others are operating, that he personally supports US position in Vietnam, and that he feels future of Asia depends on close working relationship between USG and GOI. If, despite these personal convictions, we are unable to develop working relationship with him, he is certain that many other key GOI leaders, whose political views are opposed to both ours and his own, would find a close USG-GOI relationship impossible. 5. In reply I stressed that all points he made were well understood by myself and Dept., as he could see from reading cable. However, we face legal problem from which we cannot escape. It is our hope that the acute situation presented by Conte amendment is temporary; if we can muddle through next few months some acceptable measures may be found to meet our common objectives. 6. I then asked Morarji to give me whatever facts he could on MIG deal on personal and off-the-record basis. He replied that purchase of these planes is direct result of failure three MIG plants in India to meet Soviet-set production schedule. Under special provision of original agreement if MIG's were not produced on time in India Soviets would supply them on fly-away basis. He stated that while no MIG's have yet been delivered there is a chance they will arrive in India sometime in June (i.e., before June 30). As matter of principle, he cannot stall their delivery or affect it in any manner. However, there will be no payment to USSR until one year after actual delivery, which means that nothing will be paid under this contract before June or July 1969. Payments will be in rupees over ten year period which Soviets will use to purchase various commodities in India. 7. Again spelled out our legal dilemma. Morarji replied that he fully understood and only wished he could go to US next week to talk it out with President Johnson. He stated India has strong case in regard to China-Pakistan threat and he has full confidence that he could convince any responsible American Senator or Congressman of rightness of GOI position. 8. I told Morarji that visit to US would be timely and worthwhile and I know he would be listened to carefully. He replied that in view of budget session and his responsibility as Finance Minister it would be impossible for him to leave until session adjourns on May 10, after which he would be delighted to make the trip if there is any prospect of its being effective. He would, however, need some plausible excuse so that true nature of his visit would not become evident. I asked if an honorary degree from some good university would be adequate and he replied affirmatively. Comment and recommendations follow by septel./3/ /3/Bowles commented on his conversation with Desai in telegram 11696 from New Delhi, March 20. His assessment was that neither Desai nor other members of the Indian Government would budge from the position relating to the Conte Amendment outlined in telegram 11697. He recommended that the administration seek a waiver to the amendment and anticipated that the effect of such a waiver would be to encourage voluntary Indian cooperation on the question of military expenditure, which pressure could not achieve. (National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 12-5 INDIA) Bowles
490. Telegram From the Embassy in Pakistan to the Department of State/1/ Rawalpindi, April 6, 1968, 0901Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 15 PAK-US. Secret; Immediate; Exdis. Rostow sent a copy of this telegram to the President under an April 6 memorandum. (Johnson Library, National Security File, Country File, Pakistan, Vol. VIII, Memos, 8/67-4/68) 4396. Please pass White House and concerned agencies. From Ambassador. 1. Pursuant to appointment sought by him I called on Foreign Minister this morning. Yousuf and Piracha were present. 2. The Minister handed me a letter terminating the Peshawar Agreement. The text of the letter follows: "I have the honour to refer to the agreement concluded on 18th July, 1959, between the United States of America and Pakistan relating to the establishment of a communication unit in Pakistan and to state that the Government of Pakistan have decided to terminate the said agreement (when it expires on 17th July, 1969). Therefore, in accordance with Article 12 of that agreement, I hereby convey to you notice of termination on behalf of the Government of Pakistan. "I avail myself of this opportunity to renew to your excellency the assurances of my highest consideration." Signed Syed Sharifuddin Pirzada, Foreign Minister of Pakistan. 3. Following delivery of notice the following statements were made, with Yousuf doing most of the talking: A. When the Minister and Secretary Rusk met in Washington last fall the Secretary noted that USG-GOP relations are now normal with former special circumstances no longer present including the 1965 cessation of arms supply; B. GOP now normalizing friendly relations with all major powers; C. This means that their relations with each power must be bilateral with nothing directed against any third power; D. Peshawar has been and continues to be a serious liability in GOP relations with both USSR and ChiComs; E. Renewal would not be appreciated by USSR or by ChiComs or by "our own people"; F. Because of recent technical development such as satellites USG really no longer needs Peshawar; G. USSR and ChiComs can do many things to harm GOP, including in her relations with GOI; H. GOP anxious to maintain good relations with USG free of strain and hopes that "they can continue to go up and up as they have recently"; I. GOP sincerely hopes that this termination will have no adverse effect on either USG-GOP aid relations or on the recently improved military supply situation; J. The USG and USSR have mutually been seeking a détente with each other and continuance of Peshawar would cast a shadow on those efforts; K. GOP hopes, especially in view of recent Viet-Nam relationship, that USG will evolve a new ChiCom relation which would be made more difficult by Peshawar continuance. 4. Following the above exposition I expressed surprise at the abruptness and apparent finality of this notice and discourse to which Yousuf responded that they wanted USG to have as much notice as possible and felt that in 15 months USG could effect adequate and satisfactory substitute arrangements. 5. I noted that USG probably did have the technical, geographic and financial capacities to adjust to a new situation but the necessity to make such an effort would put a heavy strain on USG-GOP relations not only because it would be extremely costly but also because it would be interpreted in many USG circles as an indication that GOP preferred cooperative relations with USSR and ChiComs more than with USG. 6. I then stated that I would of course report this development to Washington and would seek instructions. At this point I observed that I assumed that the subject was still open to discussion and negotiation. The response was affirmative. 7. I then reviewed briefly the salient reasons why it would not be in the interests of GOP to insist on a July '69 closing of this operation, as follows: A. GOP is itself getting a useful take; B. GOP has the continuing benefit of valuable training; C. The Peshawar area enjoys a very valuable economic benefit from the operation; D. If indeed USG, albeit at great expense and inconvenience, substituted other operations, then this means that neither USSR nor ChiComs would benefit from termination; E. The known existence of the operation had not prevented continual improvement in GOP relations with USSR or ChiComs; F. The existence of Peshawar gives GOP bargaining power with USSR and ChiComs whereas its elimination would remove that leverage and decrease Communist interest in GOP. 8. Yousuf responded: A. GOP is not getting any worthwhile info from operation largely because USG does not share its take except in unimportant items and all important areas are taboo; B. GOP own operation is very marginal. GOI is aware of it and has objected to it thus putting a further strain on GOP-GOI relations; C. Training is very limited and can be had under other available arrangements; D. The economic benefits are of no great order; E. Whether or not Communists would be in improved situation without Peshawar they press very hard for its discontinuance and GOP does not consider it as a lever but rather as a hardship, noting that Communists constantly refer to both Peshawar and CENTO as representing special treatment of USG in violation of GOP's avowed policy of bilateral even-handedness; F. GOP relations with Communists have continued to improve despite Peshawar because GOP has been becoming more and more non-aligned and USSR and ChiComs have grudgingly accepted Peshawar during its original term but would feel quite differently about a renewal; G. Peshawar is directed against USSR and ChiComs but GOP does not engage in any operations directed against USG; H. GOP is apprehensive about military build-up of GOI and must obtain assistance somewhere but Communists always cite Peshawar and CENTO as reason not to aid GOP militarily and USG has changed its own arms policy toward GOP except for recent opening up of spare parts program and possible third country tank acquisition. 9. I then observed that in addition to the points I had previously made GOP should consider that, having in mind first that GOP was usually aligned against USG position in international problems and second that there was very little GOP could do for USG to show its friendship other than to refrain from a Peshawar eviction, USG would be entitled to draw its own conclusions regarding the genuine interest of GOP in maintaining, let alone improving, present relations between our two countries. 10. The conversation then turned to matters of the press, which has been pushing for some statement. It was agreed that it was in the interest of both governments to minimize press coverage and that no statement would be made by GOP other than the observation that discussions are taking place. 11. Yousuf noted that the GOP National Assembly meets May 3 and that questions would undoubtedly be put to the government from the floor. 12. The meeting broke up on the note that further conversations would be held, at my initiative, when I had received instructions. 13. Comment: A. It is not surprising that formal notice of termination would have been delivered. This would understandably be logical way for GOP to initiate discussion; B. It is not surprising that notice would have been delivered shortly before the expected arrival of Kosygin; C. It is worthy of note that GOP placed such stress on: (1) Exclusion areas and lack of GOP take which we consider to be a red herring; and (2) Military supply. 14. It is my judgment that no further response should be made to GOP prior to Kosygin arrival and departure other than for me to express, and Washington to express to Hilaly, the great surprise and deep concern of Washington a the abruptness and indicated inflexibility of the GOP position coupled with a statement that we will initiate further discussions following full appraisal of the effects of a continued GOP inflexible posture on USG-GOP relations. Please confirm or comment. 15. Would appreciate development of guidelines on: A. Minimum acceptable period of continuance beyond July '69; B. Degree to which exclusion areas may be reduced or eliminated; C. What line should be taken with respect to: (1) Maintenance and/or enlargement of scope of present military supply policy now limited to spare parts and third country acquisition of 200 tanks; (2) Possible effects on future aid policy; and (3) Other potential effects on GOP-USG relations./2/ /2/The Department instructed that no further response should be made until a full assessment of the situation was completed in Washington. (Telegram 143051 to Rawalpindi, April 6; National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 15 PAK-US) Oehlert [Continue with the next documents]
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