Foreign Relations of the United States, 1950, The Near East, South Asia, and Africa, Volume V

611.90D/4–350

Department of State Policy Statement

secret

[Washington,] April 3, 1950.

Pakistan

a. objectives

Our principal objective in our relations with Pakistan is the orientation of its government and people toward the US and other western democracies and away from the USSR. We desire its further development as a politically and economically healthy state adhering to democratic principles. In the international sphere, we seek to encourage peaceful, cooperative relations between Pakistan and its neighbors, and the informed and voluntary association of the Government of Pakistan with our international objectives.

b. policy issues

Although Pakistan, as a British Dominion, is politically independent, it remains dependent upon outside assistance for defense and for economic development required to provide a basis for stable popular government and democratic institutions. US policy, therefore, is to assist Pakistan, within the limits of our capabilities, to obtain its requirements from the US, or other western democratic countries, and the Commonwealth. We encourage the GOP to maintain close contacts with friendly western democracies, and to try to understand our reasons for giving priority to the needs of the western European countries. We stress our conviction that the recovery of these countries from World War II will ultimately make the most effective contribution to Pakistan’s security and economic progress.

The USIE program in Pakistan is designed to explain our position to the people of Pakistan, and to develop a western-oriented public opinion which will foster the state’s stability and growth along democratic lines.

In the matter of security we recognize that, although Pakistan has inherited primary responsibility for the defense of the Northwest Frontier, the security of this frontier and of the whole Indian sub-continent against any major aggressor would require joint action by Pakistan, India and Afghanistan. We accordingly endeavor to promote solidarity among Pakistan, India and Afghanistan, and to use, as far as practicable, any plan for US assistance to Pakistan as an instrument to effect cooperation among these countries.

Political Issues. Pakistan has demonstrated a high degree of internal stability and vitality. The great initial problems of organizing the administrative branches of government, and of providing for the resettlement of several million refugees, have largely been met. The sudden death in 1948 of the Pakistan leader, Mohammed Ali Jinnah, tended to unify the country, rather than to disrupt it as might have been expected. Separatism, which was evident in East Bengal in 1948, has temporarily subsided. The Pakistani Army has been brought to a high standard of training and morale, although it still lacks adequate matériel support. If disruptive forces remain in check, therefore, Pakistan will emerge after India, as the strongest power between Turkey and Japan on the periphery of Asia.

There is no unified political opposition to the present Muslim League leadership in Pakistan, although opposition forces exist in the West Punjab and East Bengal. It is too early to assess the future strength of this opposition. It is evident, however, that if the government should suffer a diplomatic defeat entailing the loss of Kashmir or the tribal territory on the Afghan border,¹ or if its various schemes for social and economic advancement should not materialize, the present leadership would be seriously challenged.

The Government of Pakistan has, during the past two years, made repeated requests to the US for military assistance, including the supply on a reimbursable basis of spare parts for equipment of US origin now possessed by the Pakistani Army, and for procurement assistance for certain new items. In making these requests Pakistan authorities have informally but repeatedly declared their desire to associate themselves closely with the US in long-range defense planning. These approaches were highlighted in June and July 1949 by the visit of a top-level military mission to the US. Because of legal, supply, and priority difficulties, none of the more significant requests has yet been complied with, although US policy recognizes the advantage of providing limited military aid to Pakistan. If some military aid is not forthcoming from us, it is clear that the Government of Pakistan must request this aid from other sources. During the past year it has turned to Czechoslovakia for Some items. We recognize that the final political orientation of Pakistani leaders will be influenced by the responses they receive to these requests. We may desire the use of bases and other facilities in Pakistan in the event of war. Our response to Pakistan’s requests for military aid should increase its willingness to make bases available to us.

Treaty relations between the US and Pakistan continue to be based upon US-UK and US-India treaties and agreements which are applicable to Pakistan in accordance with the Indian Independence (International Arrangements) Order, 1947. Such agreements as have been concluded directly between the US and Pakistan have been merely exchanges of notes confirming the application to Pakistan of certain existing agreements. Negotiation of new treaties and agreements should therefore be undertaken, not only to replace US-UK and US-India treaties and agreements which are no longer entirely appropriate in view of Pakistan’s statehood, but also to fill the gaps in our treaty relations. Drafts of a Treaty of Friendship, Commerce, and Navigation, a Consular Convention, an Educational Exchange (Fulbright) Agreement, and a Military Air Agreement have already been submitted to the Pakistan Government, and a draft Agreement for the Exchange of Official Publications has recently been transmitted to our Embassy at Karachi. The pace of negotiations will probably be slowed by Pakistan’s lack of trained negotiators. Our policy is to employ all appropriate methods of persuasion to encourage the early conclusion at feast of those treaties and agreements already under discussion.

In labor matters we shall continue our present program to strengthen the ties between non-Communist labor organizations in Pakistan and in the US and other western democracies.

Public opinion in Pakistan, which was at the outset largely favorable to the US has become much more critical. Factors adversely affecting Pakistanis’ attitudes toward the US include our stand on Palestine, our invitation to Indian Prime Minister Nehru to visit the US before we had invited the Pakistan Prime Minister, our support of India’s candidacy for the Security Council in 1949, and uncertainty regarding our intentions in the Kashmir case. It is becoming increasingly necessary, therefore, to remind the Pakistanis that we are neither pro-Indian, pro-Israel nor anti-Muslim.

Economic Issues. The primarily agricultural economy of Pakistan was relatively stable until September 1949, when India (its most important customer and supplier) devalued its rupee from $0.30 to $0.21 while the Pakistan rupee was held constant, thus causing price differentials amounting to as much as 44 per cent. The resulting political tensions and control measures have brought trade between the two countries practically to a standstill. Accordingly, the deficit trend in Pakistan’s balance of payments which began in mid-1948 is likely to increase appreciably and, as Pakistan has already used all its convertible and non-convertible sterling balance releases for the year ending June 30, 1950, it will experience difficulty in continuing imports for the development of its economy.

Our policy is to aid Pakistan to improve its economic position so that it may eventually be able to minimize its reliance on restrictive import regulations and on drawings from the central reserves of the sterling area. We have supported Pakistan’s applications for membership in the International Monetary Fund and the International Bank, which it is expected to join this year. We hope that the Fund will be able to determine a par value for the Pakistan rupee which will have the support of both Pakistan and India and enable normal trade relations to be resumed between the two countries. Such relations should allow Pakistan to dispose easily of its jute, cotton, and wheat.

As a potentially efficient agricultural producer and exporter, Pakistan might play a key role in our economic policy for south and east Asia, provided continued differences with India do not disrupt the Pakistan economy. In accordance with our present policy for economic development in Southeast Asia, we should encourage Pakistan to increase food production, both to enable its potential customers (including India and Japan) to minimize their present dependence on dollar sources of food imports and to enable Pakistan to expand its purchases of consumer and capital goods. We also recognize the desirability of achieving greater diversity in Pakistan’s economy through gradual industrial development. We believe this process can be speeded if Pakistan undertakes essential measures of self-help, including stimulation of private investment (both domestic and foreign), adoption of practical tax and fiscal policies, establishment of an active agency for geologic surveys, and some measure of reform in those agricultural institutions disadvantageous to the peasantry. The reduction of military expenditures would also be very helpful, although we realize that this may not be possible until an understanding is reached with India on political issues.

We should assist Pakistan to obtain technical assistance under the Point IV Program, through the UN and through US official and private agencies. The various aspects of this program will be discussed with the Government of Pakistan before any specific implementation is undertaken. The fields in which Point IV assistance is most needed are agriculture, geological surveys, transportation, light industries, public health and administration. When possible, such aid should be coordinated with any capital investments made available by US or international agencies.

We regard the investment of private capital as the logically primary source of foreign assistance for the Pakistan economy. We are trying to persuade Pakistan to establish opportunities for US private investors on a mutually satisfactory legal basis. To the extent that private capital is not available for the financing of certain basic developments in Pakistan, we will support serious consideration by both the International Bank (after Pakistan has joined) and the Export-Import Bank of loans for specific projects designed to increase food output, to develop economically sound industries, and to improve transport and communications facilities. Inland transport and better port facilities in Pakistan are of particular importance, as the rehabilitation and development of adequate transport systems in and between each of the two widely separated parts of the country is essential to economic and political stability.

Our commercial policy is to encourage Pakistan’s full participation in the program for expansion of world trade, as expressed in the General Agreement on Tariffs and Trade and the ITO Charter. The Government of Pakistan is committed to a multilateral trade policy by its participation in the negotiation of both of these instruments and by its provisional acceptance of the GATT in 1948. We believe that Pakistan will join the ITO, although it may not do so until after the US and the UK have joined. Should Indo-Pakistan trade differences be brought before the Contracting Parties to the GATT, we will endeavor to seek a solution to these differences through means acceptable to both parties. The bilateral trade conferences, and agreements recently concluded by Pakistan with several Arab states, the USSR and certain satellite countries are not expected to have any appreciable effect on Pakistan’s trade policy.

As Pakistan had a dollar deficit of some $50 million during the first nine months of 1949, it has found it necessary to maintain certain restrictive trade and financial policies; however, these do not appear to be inconsistent with the GATT and the ITO Charter. Pakistan’s rationing of dollars, designed to conserve them for goods not available from soft currency sources, appears to be directed toward insuring that these funds may be applied so far as possible in constructive enterprises and long-term projects that will strengthen the country’s basic economy. There is so far no evidence that import controls will be utilized for the purpose of protecting marginal or new industries not suited to Pakistan. We favor reduction in export taxes, as this would enable Pakistan to increase both hard and soft currency earnings.

We should encourage the Govenment of Pakistan to assume a full share of responsibility for international economic cooperation. It has shown its willingness to do so by participating regularly in various economic conferences, by formal participation in the GATT, and by association with ECAFE. At our suggestion Pakistan signed the protocol stipulating that most-favored-nation treatment will be extended to Occupied Germany and we have been assured that similar treatment, under certain conditions, will be given to Occupied Japan.

A draft treaty of Friendship, Commerce and Navigation was presented to the Government of Pakistan in February 1948 and has been discussed informally with Pakistan officials, who are now considering it. We should like negotiations to be started soon, both to provide a mutually satisfactory basis for private US investments and to protect US commercial and shipping interests from possible discrimination. It should be borne in mind that Pakistan’s continuing relation with the Commonwealth implies a continuation of Empire preference.

The strategic importance of Pakistan requires the maintenance of US air services to that country, but at a minimum cost in US Government support. We should endeavor to prevent further development of a Pakistan air transport policy which might seriously reduce fifth freedom traffic and which would involve predetermined capacity allocations. We should also assist Pakistan to maintain adequate air, navigation and communications facilities, together with a sound domestic air transport system, by means of technical assistance through US official agencies, the International Civil Aviation Organization, and flag carriers themselves.

c. relations with other states

Pakistan’s foreign policy and its relations with the US are affected by its close connections with the Commonwealth, its proximity to India and Afghanistan, and its desire to strengthen relations with Muslim states to the west.

The question of its future relationship to the Commonwealth has become an issue in Pakistan. The government’s policy of continuing the present arrangement has met with opposition from nationalist, religious and leftist groups since the Prime Ministers Conference in London in 1949. Nationalist elements in the country believe that Pakistan has been relegated to a position secondary to that of India in British considerations. They resent the retention of India in the Commonwealth under a special formula which does not apply to them, and they believe that Britain has favored India on various questions since partition. Certain Muslim factions are opposed to the western orientation of Pakistan and, therefore, have added their voice in opposition to the Commonwealth relationship, and to British and other western influences in Pakistan.

Because of the heavy commitments of the US in other parts of the world, and because we believe that Pakistan is more likely to remain closely associated with us and the other western democracies if it remains a member of the Commonwealth, we want Pakistan–UK ties to remain close and friendly, and we therefore avoid any actions which might weaken these. The British Government is probably not fully aware of our attitude toward UK–Pakistan relations, and comprehensive high-level discussions should be held with the UK to clarify the extent to which our respective policies toward Pakistan and South Asia afford a basis for cooperative effort in the area.

Despite its recognition of the strategic and economic advantages of cooperation with India, Pakistan’s relations with India have become dangerously strained, and probably will remain so until the dispute over Kashmir is settled. Both Pakistan and India have agreed to abide by the result of a plebiscite conducted under UN supervision. The government and people of Pakistan believe that India is seeking an advantage by attempting to delay or avoid a plebiscite, India’s inflexibility, which has seriously impeded UN efforts toward a settlement, has increased the deep distrust of India which prevails in Pakistan, and has led to criticism of the US and the UK for not forcing an implementation of the UN resolutions which India and Pakistan have accepted. This issue, more than any other, is responsible for Pakistan’s desire for greater military security; its outcome will strongly influence Pakistan’s estimate of US and UK friendship.

Our policy is to remain impartial in all Pakistan-India disputes, and to emphasize to both countries our conviction that they must work together if the problems of the subcontinent are to be solved. With regard to the Kashmir dispute, we shall continue to lose no opportunity to impress upon both Governments the importance of an early and peaceful solution of this problem.

In the economic sphere, we recognize the need for increased production to maintain living standards in both countries and to supply US import requirements. We will in general avoid assisting any project undertaken by either Pakistan or India to develop within their respective territories productive facilities for commodities or manufactures procurable more economically from the other country.

Pakistan’s relations with Afghanistan are still marred by differences over the political status of the Northwest Frontier tribal territory lying east of the Durand Line. Since March 1949 the Afghan Government has vigorously persisted in its demands for recognition of some form of independence for the tribes in this territory. The Government of Pakistan contends there is no basis for Afghan interference in that area.

The strategic importance of the Pakistan-Afghan frontier, the lack of an integrated defense of the Indian subcontinent since the British withdrawal, and the need for Afghan and tribal cooperation in providing for the security of this region emphasize the need for an entente among Pakistan, Afghanistan and India. US policy, therefore, is to encourage Pakistan and Afghanistan to settle their border dispute as a preliminary step in an attempt to reach a broader understanding.

The agreement for establishing diplomatic relations between Pakistan and the USSR, which was reached in April 1948, is now being carried out. Pakistan has sent an Ambassador to Moscow, and the Soviet Ambassador to Karachi has been named. Meanwhile, Moscow and its satellite countries have been active in promoting trade with Pakistan. Trade arrangements have been made with Poland and Czechoslovakia; a trade mission from the USSR spent several weeks in Karachi in 1949; and it has been reported that the USSR will open an office for a trade agent at Dacca. In June 1949 the Prime Minister of Pakistan accepted an invitation to visit Moscow. Although this received wide popular approval in Pakistan, the visit did not materialize and it appears now to be indefinitely postponed.

In view of India’s conviction of its manifest destiny as the natural leader of the area, and of Pakistan’s deep distrust of India, Pakistan has endeavored to assume leadership of the Muslim countries of the Middle East. Such a development could lead to two opposing blocs, one dominated by Pakistan and the other by India. Except for the current strengthening of friendly relations with Iran, Pakistan so far has been unable to arouse much enthusiasm among the other countries of the area.

Admitted to the UN in September 1947, Pakistan has taken a leading role in the bloc of Muslim states. It has assumed a strong initiative on such matters as Palestine and the disposition of the former Italian colonies. It has served on the United Nations Special Committee on the Balkans since that organ was established, and it is now additionally a member both of the Council set up to aid and advise the United Nations Commissioner in Libya and of the Commission of Inquiry for Eritrea. For a country of Pakistan’s political importance and economic affluence this represents a broad range of active participation in the work of United Nations field commissions and furnishes ample evidence of Pakistan’s genuine interest in the United Nations.

d. policy evaluation

Our policies during the past eighteen months have been only moderately successful in achieving our objectives.

The government and people of Pakistan are extremely sensitive to any aspect of US–India relations which they think indicates favoritism toward India or relegation of Pakistan to a position subordinate to that of India. Our policy of strict neutrality between Pakistan and India in the Kashmir dispute, which led to our refusal during 1948 and the early part of 1949 to supply arms to either country, caused much bitterness in Pakistan because it was not considered neutral. Since India retained most of the military stores of the old British Indian army, including most of those which by agreement were to have been delivered to Pakistan, and since India has some capacity for producing arms while Pakistan is totally dependent on outside supplies, the Pakistanis contend that our policy actually favored India, and do not believe it served as a deterrent to the use of force in the Kashmir dispute. While we recognize the desirability of giving Pakistan limited military assistance, we have not yet done so, and it now appears doubtful that under existing legislation we will be able to release any significant amount of military supplies to Pakistan from government stocks. We will, however, give sympathetic consideration to applications by Pakistan for licenses to export supplies procured from commercial sources.

The announcement of the President’s invitation to Prime Minister Nehru² to visit the US, and our failure at the time to respond more enthusiastically to suggestions by Pakistani officials that a similar invitation to the Pakistan Prime Minister³ would be welcomed, probably contributed to the belief in Pakistan that our policy is pro-Indian. This undoubtedly had some bearing on Liaquat Ali Khan’s acceptance of Moscow’s invitation. The President’s subsequent invitation to Liaquat Ali Khan, following our warm reception of the Pakistan Secretary of Foreign Affairs during June 1949; the Secretary of Defense and the Pakistan Military Mission during June and July; the Minister of Finance in September; and the Secretary General and the Foreign Minister in January 1950 may have helped restore confidence in official circles in Pakistan.⁴ Among the people, however, it is doubtful that the US is as popular as it was in 1948.

With regard to Pakistan’s endeavor to assume leadership of a Middle East Muslim bloc, it may in time become desirable critically to review our concept that Pakistan’s destiny is or should be bound with India. There is increasing evidence that Pakistan is a viable state and that it can continue to develop independently if not interfered with. There is reason to question whether solidarity with India will ever be achieved, although Pakistan may be forced to cooperate in some degree with India on economic matters. It is probable, also, that Pakistan and India would collaborate in the defense of the subcontinent if faced with a Soviet attack, but these would be expedients. The schism which led to the break-up of the old India was very deep, and this was further deepened by the slaughter of 1947–48, and by India’s arbitrary actions in Junagadh and Hyderabad. Therefore the development of a Pakistan-India entente cordiale appears remote. Moreover, the vigor and methods which have characterized India’s execution of its policy of consolidating the princely states, and its inflexible attitude with regard to Kashmir, may indicate national traits which in time, if not controlled, could make India Japan’s successor in Asiatic imperialism. In such a circumstance a strong Muslim bloc under the leadership of Pakistan, and friendly to the US, might afford a desirable balance of power in South Asia. On the other hand our interests should be better served by cooperation than by rivalry between India and Pakistan as long as Soviet expansionism threatens South Asia.

In the economic sphere, it would be appropriate to place greater emphasis on our objectives including full use of the Point IV program and the IBRD. Since Pakistan’s economic development will require imports of capital, we should encourage the Government of Pakistan to give increased attention to facilitating the flow of both private and government investments into that country.

1. For documentation on U.S. relations with Tibet, see vol. vi, pp. 256.
2. Jawaharlal Nehru, Prime Minister of India.
3. Liaquat Ali Khan.

4. In December 1949, Prime Minister Ali Khan and Begum Ali Khan accepted a personal invitation from President Truman to visit the United States in May. President Truman’s words of welcome when he met them at Washington National Airport on May 3 are printed in the Department of State Bulletin, May 15, 1950, p. 755. Before leaving Washington for a tour of major cities of the United States and Canada, the Prime Minister on May 4 stated in addresses before the United States Congress and the National Press Club that Pakistan needed arms and technical assistance. The Indian reaction to his speeches is referred to in documentation of May 5, May 9, and June 15, pp. 1408, 1410 and 1412.

   For information on the January visit to Washington of Secretary-General Mohammed Ali and Foreign Minister Sir Mohammad Zafrullah Khan, see the memorandum of their conversation with Acheson on January 6, p. 1364.