Secretary’s Letters, lot 56 D 459, B

Memorandum by the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs ( Byroade ) to the Secretary of State 1

secret

Subject:

  • Pakistan’s need for wheat.

An analysis of Pakistan’s 1953–54 wheat situation prepared in the Department concludes that although it is too early to determine the exact amount, it can be expected that Pakistan’s wheat import requirements for 1953–54 will likely range from .8 to 1.3 million tons for which US aid may be required for up to 750,000 tons at an estimated cost of $75 million. A more accurate judgment will of necessity have to await later information.

Pakistan’s ability to finance its emergency need rests upon its foreign exchange earnings, its holdings of foreign assets, and the possibility of bartering surplus cotton and jute for wheat. There is a balance of payments deficit on current account and its foreign exchange assets, exclusive of Indian notes and securities, are seemingly required for its currency reserves and working balances for foreign trade operations. The estimated amount of US assistance needed takes into account possible barter deals which Pakistan might be able to arrange and Pakistan’s drawing rights in the International Monetary Fund of up to $25 million.

The political importance of assisting Pakistan in this matter is of a very high order. Pakistan is potentially an important contributor to Middle East defense and is strategically located between free Asia and the Middle East. Its basically friendly leadership has weakened during the last year, and within the very recent past martial law has had to be declared in Lahore because of riots organized by an anti-Western Muslim group assisted by communist elements. Failure of the government to take adequate action in a food crisis would most certainly lead to still greater internal disorders and difficulties with increased jeopardy to the security interests of the US. Refusal on our part to assist Pakistan to meet its need for food, especially in the light of our very large carry-over of wheat, would not only be widely misunderstood but would oblige Pakistan to exert great effort to obtain wheat from Russia with resulting serious loss of US prestige in the whole area. The risk involved in our not acting to assist Pakistan in its food emergency is too great for us to accept.

Recommendations

1.
That you agree in principle to help Pakistan meet its emergency need for wheat, the exact amount of aid and method to be used to be [Page 1826] determined later after further data become available. This will probably require a coordinated executive approach to Congress for additional legislative action.
2.
That you sign the attached letters to Secretary of Agriculture Benson and the Director for Mutual Security, Mr. Stassen.2
  1. This memorandum was drafted by Kennedy (SOA) and cleared by Turnage (E), Frechtling (S/MSA), Hardesty (TCA), Gardner (NEA), and Claxton (H).
  2. See the letter to Benson, infra . A handwritten note on the source text indicated that the letters to Benson and Stassen were delivered by special messenger on Mar. 31.