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FOREIGN RELATIONS OF THE UNITED STATES 1964-1968, Volume XXVII Mainland Southeast Asia; Regional Affairs
Department of State |
53. Telephone Conversation Between President Johnson and the President's Special Assistant for National Security Affairs (Bundy)/1/ Washington, May 27, 1964, 11:24 a.m. /1/Source: Johnson Library, Recordings and Transcripts, Recording of a telephone conversation between the President and McGeorge Bundy, Tape 64.28 PNO 111. No classification marking. This transcript was prepared by the Office of the Historian specifically for this volume. [Here follows discussion of the Seaborn mission to Hanoi and plans for Ambassador Stevenson to meet with the President.] Johnson: I will tell you the more, I just stayed awake last night thinking of this thing, and the more that I think of it I don't know what in the hell, it looks like to me that we're getting into another Korea. It just worries the hell out of me. I don't see what we can ever hope to get out of there with once we're committed. I believe the Chinese Communists are coming into it. I don't think that we can fight them 10,000 miles away from home and ever get anywhere in that area. I don't think it's worth fighting for and I don't think we can get out. And it's just the biggest damn mess that I ever saw. Bundy: It is an awful mess. Johnson: And we just got to think about it. I'm looking at this Sergeant of mine this morning and he's got 6 little old kids over there, and he's getting out my things, and bringing me in my night reading, and all that kind of stuff, and I just thought about ordering all those kids in there. And what in the hell am I ordering them out there for? What in the hell is Vietnam worth to me? What is Laos worth to me? What is it worth to this country? We've got a treaty but hell, everybody else has got a treaty out there, and they're not doing a thing about it. Bundy: Yeah, yeah. Johnson: Of course, if you start running from the Communists, they may just chase you right into your own kitchen. Bundy: Yeah, that's the trouble. And that is what the rest of that half of the world is going to think if this thing comes apart on us. That's the dilemma, that's exactly the dilemma. Johnson: But everybody that I talk to that's got any sense now they just says Oh, my God, please give us thought. Of course I was reading Mansfield's stuff this morning, and it is just Milquetoast as it can be. He's got no spine at all. Bundy: Yeah. Johnson: But this is a terrible thing that we're getting ready to do. Bundy: Mr. President, I just think it figure it is really the only big decision in one sense, this is the one that we have to either reach up and get it, or we let it go by. And I'm not telling you today what I'd do in your position. I just think that the most that we have to do with it is pray with it for another while. Johnson: Anybody else that we got that can advise with, that might have any judgement on this question, that might be fresh, that might have some new approach. Would Bradley be any good? Would Clay be any good? Bundy: No, Bradley would be no good. I do not think Clay would add. I think you're constantly searching, if I understand you correctly, for some means of stiffening this thing that does not have this escalating aspect to it, and I've been up and down this with Bob McNamara, and I have up and down it again with Mike Forrestal. And I think that there are some marginal things that we can do, . . . but I think, also, Mr. President, you can do, what I think Kennedy did at least once which is to make the threat without having made your own internal decision that you would actually carry it through. Now I think that the risk in that is that we have, at least, it seemed to do it about once or twice before. And there's another dilemma in here, which is the difficulty your own people have in. I'm not talking about Dean Rusk or Bob McNamara or me, but people who are at second removed, who just find it very hard to be firm, if they're not absolutely clear what your decision is. And yet you must safeguard that decision and keep your . . . .Johnson: What does Bill think that we ought to do? Bundy: He's in favor of touching things up, but you ought to talk to him about it. I've got an extremely good memorandum from Forrestal/2/ that I'm just getting ready for you that shows what he thinks about it. /2/Apparent reference to a memorandum from Forrestal to Bundy, May 26, printed in Foreign Relations, 1964-1968, vol. I, Document 178. Johnson: What does he think? Bundy: He thinks that we ought to be ready to move a little bit, a little bit. And mainly the Vietnamese. On the other hand, a readiness to do more. He believes really that's the best way of galvanizing the South, that if they feel that we are prepared to take a little action against the center of this infection, that that's the best way . . . Johnson: What action do we take, though? Bundy: Well, I think that we really do need to do some target fodder work, Mr. President, that shows precisely what we do and don't mean here. The main object is to kill as few people as possible, while creating an environment in which the incentive to react is as low as possible. But I can't say to you that this is a small matter. There's one other thing that I've thought about, I've only just thought overnight, and it's on this same matter of saying to a guy, you go to Korea, or you go to Vietnam, and you fight in the rice paddies. I would love to know what happened if we were to say in this same speech, and from now on, nobody goes on this task who doesn't volunteer. I think that we might turn around the atmosphere of our own people out there, if it were a volunteer enterprise. I suspect that the Joints Chiefs won't agree to that, but I'd like to know what would happen. If we really dramatized this as Americans against terror and Americans keeping their commitment, and Americans who have only peace as their object, and only Americans who want to go have to go, you might change the temper of it some. Johnson: Well, you wouldn't have a Corporals' Guard would you? Bundy: I just don't know, I just don't know. If that's true, then I'm not sure that we're the country to do this job. Johnson: I don't think that it's just Morse and Russell, and Gruening, I think it's . . . Bundy: I know it isn't. I know it Mr. President, it is 90% of the people that don't want any part of it. Johnson: Did you see the poll this morning? 65% of them don't know anything about it, and of those that do, the majority think that we're mishandling it. But they don't know what to do, that Gallup. Bundy: Yeah, yeah. Johnson: It's damn easy to get into a war, but if it's going to be awful hard to ever extricate yourself if you get in. Bundy: Very easy. I'm very sensitive to the fact that the people who are having trouble with the intransigent problem find it very easy to come and say to the President of the United States, go and be tough. Johnson: What does Lippmann think that you ought to do? Bundy: Well, I'm going to talk with him at greater length, but what he really thinks is that you should provide a diplomatic structure within which the thing can go under the control of Hanoi, and walk away from it. I don't think that's an unfair statement, but I will ask him. Johnson: You mean that he thinks that Hanoi ought to take South Vietnam? Bundy: Yes sir, diplomatically. Johnson: Uh, huh. Bundy: Maybe by calling it a neutralization and removing American force and letting it slip away the way that Laos did, would if we didn't do anything, and will if we don't do anything. We would guarantee the neutrality in some sort of a treaty that we would write. I think, I'm sorry, I'm not sure that I'm the best person to describe Lippmann's views, because I don't agree with them. Johnson: Who, who, who, who has he been talking to besides you? Has he talked to Rusk on any of this? Has he talked to McNamara? Bundy: He's talked to George Ball. And he's talked to, I don't think that he's talked to Rusk, and I don't think he's talked to McNamara. Johnson: Wouldn't it be good for he and McNamara to sit down? Bundy: I think that it would be very good, but I don't think, I think, I had planned to have lunch with Walter on Monday, because I couldn't find a workable time before for that, but I can do it sooner, if you'd like me to. Johnson: I wish you would. Bundy: I will. Johnson: I'd try to get his ideas a little more concrete before I leave here. And I'd like to have him talk to McNamara. I might, I might just have the three of you in this afternoon sometime. Bundy: All right. Johnson: Walter, McNamara and him [Ball?]. I'd like to hear Walter and McNamara debate. Bundy: Debate it?/3/ /3/According to the President's Daily Diary, the President met with McNamara, McGeorge Bundy, Ball, and Lippmann from 4:30 p.m. to approximately 5 p.m. (Johnson Library) Ball wrote Rusk an account of the meeting, noting that Lippmann "made his usual argument for neutralization." Ball reported that when he pressed, Lippmann admitted that he assumed Southeast Asia was "destined inevitably to become a zone of Chinese Communist control" and the best U.S. course was to slow that expansionism and "make it less brutal." Ball did not think the President "bought Lippmann's thesis," but Johnson was impressed with Lippmann's view that the United States was losing the battle of international public relations. After the President left, the group debated Southeast Asia and Vietnam for another hour. (Letter from Ball to Rusk, May 31; Department of State, Ball Files: Lot 74 D 272, Vietnam (Ball's Memos)) Johnson: Yeah. [Here follows discussion of a possible time that afternoon for the President to meet with McNamara, McGeorge Bundy, Ball, and Walter Lippmann.]
54. Telegram From the Department of State to the Embassy in France/1/ Washington, March 30, 1965, 6:15 p.m. /1/Source: Department of State, Central Files, DEF 4 SEATO. Secret; Exdis. Drafted by Mendenhall and Manhard; cleared by Green, Bundy, Assistant Secretaries of State for European Affairs Wiliam R. Tyler and Congressional Relations Douglas MacArthur II; and approved by Rusk. Repeated to Bangkok. 5052. Paris 5450./2/ Prior receipt reftel we had been considering what we might do about French attitude toward SEATO. We had developed major pros and cons in regard to French withdrawal from SEATO. /2/In telegram 5450 from Paris, March 26, Bohlen reported that French Foreign Minister Couve de Murville had told him that he would not attend the upcoming SEATO Council in London. The last meeting had been "disagreeable," and Couve was thinking of sending an observer instead. Asked by Bohlen if this meant France was leaving SEATO, Couve said that was not the present intention but it was impossible to foresee the future. (Ibid.) We see these advantages: First, withdrawal of France (and perhaps Pakistan as well) would make it possible for SEATO to play a more active role in Vietnam including if desired initiation of collective SEATO action. If this results in substantial commitments from other SEATO members, result might be to correct impression in some quarters that Vietnam is just a US war and might help with US Congressional opinion. Second, French withdrawal might increase deterrent against aggressive Communist move by demonstrating a revitalization of SEATO. Third, by French withdrawal we could signify politically that we have no intention of accepting French political approach to Vietnam and SEA. Principal disadvantages appear to be: First, actions causing France to publicize further formal policy disagreement with US over SEA might play into both Chicom and Soviet hands. In Asia and Europe this might encourage Peiping and Moscow to push us further and might induce France and USSR to work harder to harmonize their policies, e.g., some sort of bilateral understanding on Germany. Second, forcing the issue with France on SEATO at this time might stir de Gaulle to take some unwelcome initiative in regard to NATO. We had come to the conclusion that French participation in SEATO likely to pose serious and unavoidable problem for them and for us. We were nevertheless reluctant to move directly against the French in SEATO and in interest of maintaining at least correct relations we doubted that a suitable opportunity could be found to approach French Government to this end. Couve's proposal now seems to represent change in the problem and Couve at least seems to see the French problem in SEATO very much as we do. Therefore we think we might simply let nature take its course and if France sends only an observer to meeting in May would offer no objection. Would appreciate your comments on above. Rusk
55. Action Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to Secretary of State Rusk/1/ Washington, March 30, 1965. /1/Source: Department of State, S/S-Conference Files: Lot 66 D 347, CF 2498. Secret. Drafted by Mendenhall, cleared by Salans, Deputy Assistant Secretaries of State for European Affairs Robert C. Creel and Near Eastern Affairs William J. Hadley. The attached Scope Paper was drafted by Mendenhall on March 26. SUBJECT We believe that our main objectives at the SEATO Council Meeting in London, May 3-5, should be related to Viet-Nam. We suggest the meeting be used: 1. To obtain solid SEATO support for South Viet-Nam, including an endorsement of the air strikes against North Viet-Nam. 2. To demonstrate that the U.S. does have allies (like Australia, New Zealand, Thailand and the Philippines) who are firmly lined up with us on Viet-Nam. 3. To give the Vietnamese Government through an open presentation by its observer at the meeting the opportunity to get its case across better in Europe. This approach on Viet-Nam will not be welcomed by the French and perhaps by the Pakistani. They may sit quietly by without endorsing it, or they may seek to register objection by absenting themselves from certain sessions or by taking exception in the communiqué. The French are unlikely to react more strongly in view of the indication that they will probably be represented by an "observer" only. We suggest that we move ahead with determination on the Viet-Nam issue at the meeting. We may be able to devise procedures that could get around any obstacles the French or Pakistani might interpose. We would propose lining up prior support from other friendly delegations. Recommendation: That you approve the attached Scope Paper for the SEATO Council Meeting which reflects the approach described above./2/ /2/Rusk initialed his approval of the Scope Paper. SEATO COUNCIL MEETING SCOPE PAPER U.S. Objectives 1. To obtain solid SEATO support for the Government of the Republic of Viet-Nam in its struggle against Communist aggression from North Viet-Nam. 2. To take advantage of the fact that the meeting is in London and demonstrate to European governments and public opinion that the South Vietnamese Government and people strongly resist the Communist effort to control them, and that this is not simply a civil war within South Viet-Nam. 3. To demonstrate also to world public opinion that the Vietnamese and U.S. Governments have the firm political support of both Asian (e.g., Thailand and Philippines) and non-Asian (e.g., Australia, New Zealand, United Kingdom) allies. 4. To reassure Thailand of firm SEATO backing against the incipient signs of externally-instigated Communist insurgency. 5. To keep SEATO's focus on Communist threats by diverting to bilateral discussion any Pakistan or Philippine efforts to raise the Indian and Indonesian threats. Means of Attaining Objectives 1. By developing a strong U.S. statement for the opening public session. 2. By inducing Thailand, Philippines, Australia and New Zealand to make similar substantive opening statements. 3. By seeking to have the Vietnamese observer address the opening public session in order to get the Vietnamese case across to European opinion. 4. By adoption of a vigorously worded communiqué which includes specific endorsement of the air action being undertaken against North Viet-Nam. 5. By inclusion in the communiqué of praise for contributions to the support of Viet-Nam by both SEATO members and non-members, with specific reference to the military personnel furnished by the Republic of Korea. The communiqué should also appeal for further assistance to Viet-Nam by Free World nations, both SEATO members and non-members. 6. By making it publicly clear that Thailand has now been designated by the Communists as their next target in Southeast Asia after Viet-Nam, and that SEATO members will fully abide by their commitments to Thailand. Possible Obstacles 1. The U.K. may be concerned that a vigorous approach could produce fireworks. We should seek to persuade the U.K. that this is the only approach which has real political value against the Communists in Southeast Asia. 2. France may object strenuously both to inviting the Vietnamese observer to address the Council and to the type of communiqué we propose. We should let the French know in advance that we intend to move ahead as indicated. We should also line up prior support for the U.S. position by friendly delegations. 3. Pakistan may side with France in its objections to the proposed treatment of the Viet-Nam issue. Prior to the Council Meeting we should let Pakistan know in general terms about our proposed approach since Pakistan might then choose to be represented at a level lower than Foreign Minister Bhutto as a means of muting its opposition.
56. Memorandum From the Counselor of the Department of State and Chairman of the Policy Planning Staff (Rostow) to the President's Special Assistant for National Security Affairs (Bundy)/1/ Washington, March 30, 1965. /1/Source: Johnson Library, National Security File, Country File, Vietnam, Southeast Asia Development Program, Vol. I, 1965. Confidential. SUBJECT In response to your telephone call of this morning concerning a scenario for the Southeast Asia development track, herewith my observations. 1. Present Staff Work. I discovered that thoughtful staff work was already underway under the direction of Mr. Rutherford Poats of AID. His draft outline of March 27, 1965, is attached./2/ Some observations on his proposal are included herewith. /2/This outline, which was not attached, was sent by Poats to Cooper on March 27. (Ibid., Country File, Vietnam, Southeast Asia, Vol. IV, Memos 8/64-8/65) 2. Setting the Plan in Motion. On page 7 of the attached memorandum it is suggested that we conduct confidential consultations with UN Secretary [General] U Thant and possibly ECAFE Secretary General U Nyun, suggesting that U Thant adopt the President's proposal as his own and call for a special ECAFE meeting to consider it. This is the proper direction for an initial move. A principal advantage of attaching the organization to the UN would be to detach it from U.S. South Viet Nam policy. It may be wiser, however, to suggest that U Thant or, possibly, U Nyun appoint a small Asian Wisemen's committee to come up with concrete proposals which could then be considered at an ECAFE meeting some months hence. The function of the committee would be to recommend organization and procedures for expanding the Southeast Asian development effort, including its external financing, on a regional basis. Our experience with the Alliance for Progress suggests that governments do better if they react to concrete proposals rather than try to generate them around the table. Moreover, an Asian Wisemen exercise would give us an opportunity to feed in quietly our own substantive ideas. 3. A Fall Back. Obviously, a maximum effort should be made to persuade U Thant to seize this idea and make himself the Ernie Bevin of the exercise. If this proves impossible, we should persuade Thailand or the Philippines to sponsor an Asian Wisemen's exercise. First-rate people should be drawn from Thailand, the Philippines, Japan, and Australia. (By way of illustration, the following are some possible names of men of serious repute in the development business: Fuey Ungphakorn, Governor of the Bank of Thailand; Sixto Roxas, formerly chief planner in the Philippines, now in private business; and Okita Saburo, Japan's top professional economist recently retired from the staff of Japan's economic planning agency.) In this fall-back track, the sponsoring government would put the Wisemen's plan into discussion at a future special ECAFE session, or to a meeting of Asian nations especially called for the purpose. The proposed Southeast Asia Development Association could be independent of ECAFE, but its most desirable linkage would be with that organization, although operating with a certain autonomy. 4. Further Internal Staff Work. The attached draft should be brought to completion within Washington and then, as suggested, circulated to our Asian Embassies for more detailed comment. As noted above, we would already have set U Thant (hopefully) in motion. The purpose of our staff work and field comments would be to have something of substance to feed the Wisemen. 5. Some General Observations. a. Having launched the concept in the context of the South Viet Nam crisis, we should seek now (via U Thant or otherwise) to detach it operationally from the crisis so that it may go forward on a parallel track with the widest possible Asian and Free World support. b. We should set it in motion as fast as the realities permit, while the war proceeds. It will serve our political purposes best if it is an operation in being rather than something to be hoped for when the crisis in Southeast Asia is settled. c. Its major political purposes should be conceived of as: (1) a way to dramatize the seriousness of our long-term commitment to Asian development in forms which enlarge the role of Asian leadership and which strengthen Asian unity; and (2) a way to dramatize in Hanoi that our South Viet Nam policy is not isolating us from the mainstream of Asian political and economic life. It may be that, in the end, Hanoi will be willing to associate itself with this kind of enterprise; but we should not count on the hope of future economic assistance to Hanoi as a major factor in determining its posture over coming weeks and months in the Southeast Asia confrontation. 6. Some Specific Comments. The attached draft plan needs, in my view, sharpening and clarification in at least three respects: a. It implies that Hanoi might benefit from the Southeast Asia Development Association, but it does not indicate how regional membership for North Viet Nam (page 5) could be brought about in light of the fact that North Viet Nam is not a member of the UN or of ECAFE. It has always been assumed that North Viet Nam would have nothing to do with a UN organization. My own feeling is that any economic carrot to North Viet Nam, relevant to a settlement or immediate post-settlement circumstances, should be direct and ad hoc, in the first instance. Eventually, of course, Hanoi might be folded into more systematic regional arrangements. b. The function of the Southeast Asia Development Association in reviewing national plans is not sufficiently emphasized. It is essential for our purposes that, as with CIAP, the proposed association screen plans carefully in terms of the adequacy of self-help measures. c. At some stage, as with the Alliance for Progress, we shall have to hold out somewhat enlarged external assistance, and dramatize our assistance intentions by advancing a large over-all figure for total external support. External capital from all sources flowing into the countries included in the proposed regional members, excepting North Viet-Nam, is of the rough order of magnitude of $530 million, of which about $370 million represents AID, EXIM, and PL 480 funds; $60 million, IBRD (average of last three years); $100 million, other governmental assistance (1963 latest year available). Private investment figures, not immediately available, are believed to be relatively small. A figure of $6.4 billion for a ten year period would represent a 20% increase over present levels, and constitute a useful carrot. If to this we add, hopefully, some diversion of military aid expenditures ($310 million for FY 1964) and make some allowance for an expansion of private investment, we come to a figure of, say, $8 billion for the ten year period./3/ Presented in this global fashion (as at Punta del Este in 1961), it does not nail us down to a specific AID increase, giving us scope to see what can be generated from IBRD, Japan, Europe, the Asian Development Bank, private investment, etc. If we set in motion a Wisemen's exercise, we shall have time to sort out our statistics and produce a more rational and realistic target figure. /3/This is similar to the figure of $4.5 billion for five years in the attached memorandum. For purposes of rough comparison, our external resources goal set at Punta del Este was $20 billion for ten years, for a population of about 200 million Latin Americans. Omitting Indonesia and North Viet Nam, the population of the Southeast Asian region, as defined, is 120 million. Thus, the proposed per capita external assistance target is low by the Alliance for Progress standard--very low if we assume Indonesia joins the club along the way. If Indonesia is included, the population of the region comes to about 220 million. [Footnote in the source text.]
57. Paper Prepared by Chester L. Cooper of the National Security Council Staff for the President's Special Assistant for National Security Affairs (Bundy)/1/ Washington, April 1, 1965. /1/Source: Johnson Library, National Security File, Files of McGeorge Bundy, SE Asia Regional Development. Confidential. SUBJECT A. The Proposition We should make immediately available to U Thant the idea of forming a new regional institution, The Southeast Asia Development Association. This will be a coordinating and consultative organization. It will have a permanent staff to conduct regional surveys, program reviews, technical studies, etc. It will also have an executive agent (e.g. the IBRD or the proposed Asia Development Bank) for the management of multi-national capital projects. Although the Association itself will finance some joint projects, much of the funds for development will continue to come from bilateral arrangements. Note: 1) "Regional Membership" will be open to any country of Southeast Asia ready to meet minimum self-help criteria, to permit free access to staff and executive agent personnel, to engage in joint planning and to comply with any other standards the membership itself might establish. 2) "Non Regional Membership" will include certain ECAFE countries outside Southeast Asia. 3) The Association will coordinate its planning with ECAFE for such ongoing regional programs as the Mekong River projects and the ECAFE highway. B. The Philosophy and the Purpose This must be more than a political slogan or gimmick; it must not be conceived of as simply one more device to "stop Communism" or "contain China"; it must not be regarded or treated as a creature or special client of the U.S. This means that to the maximum extent possible, the concept must appear to be an Asian initiative and be Asian in character. Its purpose is to launch a coordinated regional attack on poverty and insecurity in Southeast Asia and, through joint effort and planning, to maximize the region's potential for economic and social development. It is designed to give substance to "Point 5" of the President's cabinet statement and to provide a more explicit U.S. commitment./2/ /2/Reference is to a statement on Vietnam and potential Asian economic development made to the Cabinet on March 25. For the text, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1965, Book I, p. 319. Note: While the Association, hopefully, will provide over the long term an incentive and an opportunity for Hanoi to choose the path of cooperation rather than aggression, it should not be regarded as directly tied to the war in Vietnam. Any program designed to induce Hanoi to forsake its present military course would involve such specific political and, to a lesser extent, economic inducements as to distort the broad regional purpose of the Development Association. Such political and economic inducements require early consideration in a separate (albeit related) program. C. The Scenario 1. Immediately upon approval of this concept by highest authority, U Thant should be approached in confidence and at a high level with the object of having him advance the plan as his own idea. 2. U Thant should be encouraged to appoint a committee of "Asian Wise Men" to block out concrete organizational proposals, some major planning tasks and a few development suggestions over the next ninety days. He should also be encouraged to invite the U.S. and Soviet Governments and the IBRD to send consultants to meet with him. 3. U Thant's initiative should be followed at once by a Presidential statement endorsing U Thant's proposal as an appropriate follow-up to "Point 5." The congressional leadership should be briefed at this juncture in order to assure Hill support. 4. The President should let it be known that Governor Harriman will be his Special Representative for the planning of the Association. 5. After consultations with U Thant, Governor Harriman will consult with the Soviet Union, the UK, Japan and appropriate countries of the region to discuss the proposal and generate support for it. (The Governor will have to offer some concrete U.S. commitments at about this point.) 6. The U.S. should take an occasion to indicate that it is favorably disposed to the Asian Regional Bank. 7. After the necessary staff work and congressional consultation, the U.S. should announce, at least in general terms, the amount of money and technical personnel it is prepared to commit to this project. 8. During the period between the early announcements and the report of the Wise Men the form if not the reality of momentum must be maintained. This can be done in a variety of ways--a New York Times Sunday magazine article by, say, Galbraith, a conference of regional specialists at the East-West Center, etc. D. The Mechanics of Organization An organizational device must be conceived that will: a. Have a clear Asian cast. b. Be under the UN umbrella. c. Not prejudice the eligibility or attitudes of non-UN members should they wish to join. d. Not imply early UN membership to non-UN members. ECAFE meets enough of these requirements (and in addition includes such key countries as the USSR, Australia, New Zealand and Japan) to serve as the parent body. The UN membership issue can be dealt with by creating an ECAFE Development subsidiary which would permit countries of Southeast Asia, regardless of their UN stature, to be full participants. E. The Problems 1. A fall-back position should be prepared in the event U Thant turns down our suggestion. Several possibilities suggest themselves: a country in the region could take the initiative (The Philippines), the formation of an Asian Regional Bank could be expedited and the proposal could be submitted to it, or we could proceed on a bilateral basis. 2. Southeast Asia has important limitations as a Development Region (political animosities, current military confrontations, language differences, a paucity of skills, a bare minimum of complementary economies.) But it has a relatively favorable land-food-population ratio (except for Java). If "Development" is defined broadly, if our tolerance is high and our expectation low, we can't lose much, and we may gain a fair amount. 3. Efforts and resources committed to Southeast Asia may divert attention and funds from the urgent problems of the Indian sub-continent. This must not happen. 4. The concept outlined above anticipates eventual U.S. aid to and cooperation with such unpleasant and unpopular folk as Sihanouk, Sukarno and even Ho Chi Minh. This will take some skillful handling within the U.S. and especially on Capitol Hill. C [Here follows a list of ECAFE members, associate members, observers, suggested regional and non-regional new members.]
58. Memorandum From the President's Special Assistant for National Security Affairs (Bundy) to President Johnson/1/ Washington, April 1, 1965. /1/Source: Johnson Library, National Security File, Memos to the President, McGeorge Bundy, Vol. IX. Secret. SUBJECT Southeast Asia Economic Development Planning I won't bore you with the long papers that have been worked up in staff sessions this week. Their essence is as follows: 1. There is great advantage in continuing US leadership to get a regional Southeast Asia development operation going. 1. For this purpose, we can well blow a second and somewhat louder blast enlarging the general proposition you set forth in your statement on Vietnam at the Cabinet meeting last week./2/ /2/See footnote 2, Document 57. 3. We should not at this stage give a precise description of the form of the development organization or a commitment in dollar terms. There are two disadvantages in such a course now: a. A long forward pass would probably be incomplete, if we do not line up some receivers down-field. This could make us look silly. b. Quite soon we will want to separate Southeast Asia development planning from the Vietnamese crisis, in operating terms. We want the real political effect of an effort for regional economic development, but we can get that effect better if we do not tie the two issues too tightly together. We do not want it thought that we are interested in economic development only because we are trying somehow to get out of our mess in Vietnam. The Marshall Plan was helpful in dealing with Soviet pressure on Europe, but it was not designed or presented to the Europeans in those terms. These considerations lead us to suggest that we should use language like Goodwin's in your next statement on Vietnam. But right after that, we should separate the regional economic problem from the Vietnamese problem in day-to-day operations. We think we should try to get U Thant to pick up the ball and organize some Asian responses. We also think the project should be given to Harriman to work on, both with U Thant and in relevant Asian capitals. This will give it visibility and standing because of his history as a Marshall Plan leader, his international prestige and his position as a liberal. After we get some Asian responses and perhaps the skeleton of a new Southeast Asia development organization, we should expect to consider a contingent US commitment like our Alliance for Progress commitments of four years ago. A scenario of this kind will allow plenty of time for Congressional consultation in advance of any such US pledge. These are the essential elements of a quite complex and difficult enterprise. This plan has been reviewed with Tex Goldschmidt, as well as the bureaucrats, and it has his warm support. McG.B.
59. Telegram From the Mission to the United Nations to the Department of State/1/ New York, April 5, 1965, 8:45 p.m. /1/Source: Department of State, Central Files, POL 27 VIET S. Top Secret; Exdis. 3936. For Cleveland from Plimpton./2/ Regional development in Southeast Asia: discussion with UN SYG. /2/Francis T.P. Plimpton, Deputy U.S Representative to the United Nations. In response to Deptel 2383,/3/ Jackson and I this afternoon discussed informally with UN SYG and Bunche possibility of SYG taking initiative in proposing major new international development program in SEA. I mentioned point five of Pres's statement and Canadian interest as expressed by Pearson. I emphasized US interested in cooperative program in area which would be directed to overcoming poverty, ignorance and disease. US envisaged program not directed against any particular ideology or country but one which was pro people of SEA. We had in mind very substantial resources being available. I said we believed there would be many advantages if SYG felt he could take lead in initiating such a program. I therefore wanted talk with him informally at this stage to see if he felt an initiative on his part might be appropriate. If so, we could discuss more detailed possibilities with him within few days. /3/Dated April 4. (Department of State, Central Files, POL 27 VIET S) U Thant spoke with genuine warmth of Pres Johnson's initiative in point five of his statement and said he had been giving great deal of thought to what might be done. It was clear he appreciated opportunity to talk informally about possibilities. He indicated he thought UN economic commission for Asia and the Far East (ECAFE) should be used in any new cooperative effort. He said he had not as yet received report on their recent mtg at Wellington. If he found no report on that mtg had reached NY, he would cable immediately for word of any relevant discussions. He apparently envisages any initiative by him as moving on from the report as perhaps a take-off point. SYG said he would like now to consult promptly with his associates. I mentioned possibility North Vietnamese participation in regional development effort, and spoke of Sov membership in ECAFE as providing opportunity ascertain extent their interest. SYG did not express reservation on either point, saying only that regional economic development was one of things he had had in mind earlier as subject for useful negotiation. SYG said he would not take any initiative until had talked further with US about detailed possibilities. I have impression from discussion that SYG open to taking lead if he can find line of approach which has some possibility of getting Hanoi on board. He made no commitment but is obviously genuinely interested. As mtg ended I mentioned that our reply to the Seventeen was still being worked on and said I believed we would soon be able give him copy. Following the mtg SYG, Jackson and Pedersen talked informally with Narasimhan and Goldschmidt. Discussion followed same general line as with SYG except focus was on seeking counsel of Narasimhan and Goldschmidt on best means getting cooperation of countries of SEA and building on UN's development experience in the area. Both UN officials believed ECAFE best framework. Narasimhan thought North Viet "initiative" to obtain membership ECAFE would be essential. He speculated whether North Viet could join ECAFE without North Korea also being admitted. He also doubted whether World Bank could be used as executive agent for multi-national projects if Sovs decided contribute. He favored new program being built around present Mekong River arrangements. Narasimhan referred in passing to idea of UN guard forces for development projects in the area and indicated UN remained interested in such possibilities. Narasimhan, as former exec secy of ECAFE, and Goldschmidt, as UN Mekong desk man, expressed appreciation for opportunity for timely informal consultation. Plimpton
60. Editorial Note On April 7, 1965, President Johnson outlined in an address to the faculty and students of John Hopkins University a plan for a cooperative effort for development of Asia. Johnson stated his intention of asking the United States Congress to "join in billion dollar American investment in this effort as soon as it is underway." The President envisioned the Mekong River providing "food, water, and power on a scale to dwarf even our own TVA," modern medicine in Asia's villages, schools to train potential managers, and U.S. farm surpluses feeding Asia's needy. He announced his intention of naming Eugene Black, former President of the World Bank, to head the effort. The text of the speech is in Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1965, Book I, pages 394-399.
61. Memorandum From the Administrator of the Agency for International Development (Bell) and the Under Secretary of State for Economic Affairs (Mann) to President Johnson)/1/ Washington, undated. /1/Source: Department of State, Ball Files: Lot 74 D 272, Southeast Asia. Confidential. SUBJECT The attached talking notes for your meeting with Eugene Black/2/ represent the tentative views of the Department of State and AID on the purpose, sponsorship, scope, organizational arrangements, aid requirements and prospects of a Southeast Asia Development Association. These notes include answers to your questions of this morning. Further discussion among interested specialists and with Mr. Black will be required to firm up these preliminary views. /2/President Johnson, accompanied by Ball, Mann, Cleveland, Bell, Poats, Secretary of Agriculture Orville H. Freeman, Secretary of Commerce John T. Conner, Director of the Budget Kermit Gordon, McGeorge Bundy, Bator, Komer, and Cooper, met with Black from 5:50 to 7:20 p.m. on April 8 in the Cabinet room of the White House. (Johnson Library, President's Daily Diary) No other record of this meeting has been found. Thomas C. Mann/3/ David E. Bell /3/Printed from a copy that bears these typed signatures.
Attachment/4/ /4/Drafted by Poats on April 8. TALKING NOTES: SOUTHEAST ASIA DEVELOPMENT SCHEME Purpose: To bring together the peoples and governments of Southeast Asia in a constructive association for economic development action, in cooperation with each other and with the advanced nations; to build regional political unit and reduce tensions; to commit the advanced countries and the United Nations to a deeper interest in the development and, indirectly, the security of this vulnerable region; to bring the Soviet Union and North Korea, as well as the neutral counties of the area, into this relation of positive coexistence, offering North Vietnam a chance to change its policies. Sponsorship: To achieve these political aims even moderately, the Association must be all-inclusive, limited only by the willingness of countries to subscribe to the Association's principles. Suspicion that this scheme is a new try at western imperialism will kill it. Soviet and North Vietnamese participation, or at least initial tolerance of the plan, appears to be essential. Consequently, Asian initiative from here out is crucial. The United States should try to work in the background in the formative stages, giving U Thant the lead. A tie with the United Nations and with the U.N. Economic Commission for Asia and the Far East would provide the best auspices. Scope: The broader the participation of Southeast Asian countries the better will be its chances of achieving both the developmental, trade and political purposes. Our interests would be served by the participation of effective democracies--the Philippines and Malaysia--and the strongest countries of Southeast Asia, Thailand. We cannot dictate the exclusion of any country of the area. We should not, however, commit ourselves to providing direct U.S. aid to any participant, nor indicate that we expect to force our aid on those who have rejected it, i.e., Cambodia and Indonesia. We should agree to contribute to consortia managed by the Association's executive agent which would undertake projects in or benefiting any member country, regardless of whether that country is recognized by or directly assisted by the United States. Possible Organization: The Association would have regional (recipient) and non-regional (donor) members. It would have a permanent headquarters in the area, with a staff composed largely of Asians for secretariat-type functions, including data collection. It would have an executive agent, preferably provided by the World Bank, to organize and manage the financing, construction and in some cases operation of regional projects serving more than one country, such as Mekong River projects, international transportation and communications projects, regional educational institutions (medical, dental, engineering, fisheries, agriculture, public administration and other types of colleges serving all countries of the region), etc. The Association would be loosely associated with, and report to, ECAFE. It would assist countries of the region to prepare their national development plans and might conduct regular examination of the members' economic policies and problems, in the manner of the CIAP system in the Alliance for Progress. It also might conduct trade and tariff consultations and discuss complementary industrial investment. Its role in coordinating bilateral aid terms has not been thought out. Aid Requirements: Under the best of circumstances, the region (including Indonesia) could use effectively at least $1 billion per year in all forms of foreign economic assistance for development, plus at least $200 million annually in foreign private investment. We cannot expect these favorable circumstances in all countries of the area soon. Human resources are poorly developed, and training or experiences takes time. The public and private institutions and the basic infrastructure of development are inadequate. Domestic savings essential to economic growth will probably rise slowly. Furthermore, communist threats and aggression are forcing a tragic diversion of resources to military budgets. It is unlikely that there can be an immediate massive reduction of these expenditures. Consequently, we believe that in the next few years, even with an early cessation of hostilities, the region can absorb no more than $700 to $800 million annually in long-term developmental aid (other than private investment) from all sources. The United States ideally should not provide more than about half of this total. A dominant U.S. role would run counter to our political purposes and erode Congressional support for the effort over the years. Japan, Western Europe and the IBRD should be pressed to increase greatly their aid commitments to the region. In addition to our contributions to long-term development, we will continue to have some bilateral aid obligation for economic assistance of a non-developmental character in South Vietnam and Laos, related to their distorted wartime economies or in support of temporarily inflated military forces. Present and Future U.S. Aid Requirements: U.S. economic aid to the potential membership of the Southeast Asia Development Association currently runs at about $385 million per year. This includes about $275 million from AID (largely grants), $95 million from PL 480 sales and grants, and nearly $15 million from the Export-Import Bank. About half of this total, or $200 million, might be called long-term development aid. A doubling of this U.S. developmental effort to about $400 million annually appears to be a reasonable goal. This would not require a $200 million increase in the annual AID and PL 480 requirements. Some transfers from emergency-type supporting assistance and military assistance should be possible. Some increase in Ex-Im Bank loans can be expected. To the extent we can stimulate private U.S. investment, with guaranties and loans, we can reduce the need for U.S. Government aid. It may be possible to do our share with a net increase of only $100 million annually in the AID budget request to Congress. The current U.S. Military Assistance Programs in these countries total $330 million. An approximate monthly average MAP expenditure for Vietnam is $20 million, of which ammunition represents some $6 or $7 million. Direct U.S. military costs in Vietnam (outside the MAP budget) are roughly estimated as about $20 million per month. In Laos, the monthly MAP cost is about $3.5 million, of which ammunition accounts for $1.5 million. Direct U.S. air operations have not been accurately estimated on a monthly average basis. (See attached tables.)/5/ /5/Attached, but not printed. Private Investment: Over the past two years, private foreign investment in Southeast Asia, including the Philippines, averaged some $70 million. Thailand got $73 million, Indonesia $12 million, Malaysia $40 million in 1963. There was a net withdrawal of private investment totaling $30 million from the Philippines, $14 million from Burma and $4 million from Cambodia during 1963. With improvements in security and political climate, financial stability, assurance of profit-repatriation and a generally improved atmos-phere of foreign confidence in the region, this flow of resources and know-how into the region might be doubled. The climate in the Philippines presently is worsening seriously. The countries of the area can stimulate greater foreign (and domestic) investment by providing tax exemptions, liberal repatriation rights, permission to own land and bring in foreign technicians, establishing industrial parks, publicizing investment opportunities, etc. The capital-exporting countries can stimulate private investment in the area by extending their guaranty programs to cover political risks (as we do), offering tax incentives to foreign investors, undertaking studies of investment opportunities, sector surveys and other technical assistance. Urgent Needs: A. Rural development, across the board--agricultural production and marketing expansion, potable water and irrigation, rural health and sanitation, village level schools, local roads and other transportation, community leadership training and motivation, etc. B. Middle and higher education. Example: In Laos, there are only 80 high school graduates a year. C. Industrial expansion, keyed to stimulation of agriculture, reduction of dependence on imports, and exploitation of labor cost differentials. Examples: Grain processing and packaging, fish canning and freezing, cotton and synthetic textile mills, paper, cement, light iron and steel shapes, cooking utensils. D. Basic infrastructure: Electric power generation and distribution, especially to small towns for potential new local industries; highways and feeder road construction and improvement; railway expansion, particularly international links; telecommunications. E. Health services, for cities as well as rural areas, including. 1. In preventive and curative medicines-- a) Malaria eradication.
(c) Control and treatment of diseases of the eye such as
trachoma and glaucoma. 2. In public health, expand village health and sanitation by water and sewage disposal and well drilling. 3. In direct health services, develop local and provincial medical facilities and provide surgical and medical teams. 4. Medical education. Multilateral Projects: The purpose of achieving greater regional unity can be advanced by giving great weight in project-selection to activities which knit these countries together. Such multi-national projects could be turned over to an Association consortium under World Bank management. These include: The Mekong River's exploitation offers this opportunity, but this is a very long-term undertaking of enormous cost. Major, main-stream dams do not appear economically justifiable (in relation to costs in excess of $500 million for a single dam project) for some years. However, tributary dams which may produce electricity for neighboring countries may be feasible in the nearer future. International highways and railways may be feasible in the near term. The French-built roads linking Cambodia, Vietnam and Laos are in bad disrepair. A regional airline would make more sense than the present, deficit-ridden national lines. All the cities of the area need airport improvements and airways communications. Expansion of the regional telecommunications system, which we have developed in Thailand and partially in Vietnam and Laos, is an attractive possibility. Regional educational institutions, with different specialty schools established in different countries of the region, would serve twin purposes of development and regional political unification. Some types of disease-eradication campaigns are most effective if they cut across national boundaries. The regional experts will undoubtedly propose other schemes. A disadvantage of such multilateral projects is the difficulty of tying U.S. contributions to U.S. procurement, i.e., the gold drain issue. [Continue with the next documents]
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