Foreign Relations of the United States, 1952–1954, Africa and South Asia, Volume XI, Part 2

Secretary’s Letters, lot 56 D 459

Memorandum by the Secretary of State to the President¹

Washington, April 30, 1953.

Subject:

• The Food Situation in Pakistan

In response to your memorandum of April 23, 1953,² I concur with the first five points of the attachment,³ which contain an analysis of Pakistan’s desperate food situation, except for the indication in paragraph 4 that 1 million tons of wheat would cost about $90 million. One million tons may cost as much as $110 million delivered to Pakistan.

I agree completely that famine relief for Pakistan through a dollar loan would severely limit its ability to borrow for, and thus seriously retard, necessary economic development. A dollar grant would overcome the difficulty.

The proposal for a revolving relief fund raises several difficult problems:⁴

1. Present studies make it appear unlikely that Pakistan in the foreseeable future will have a wheat surplus adequate to repay the loan and at the same time meet the increasing demands of its people.

2. It would be politically unwise to saddle Pakistan with an enormous debt which it could not repay either in dollars or in kind without seriously retarding its economic progress.

3. Enormous administrative difficulties can be foreseen in the concept of a revolving fund, such as those connected with:

(a) mutual agreement on a definition of “surplus” for purposes of repayment;

(b) definition of the term “crisis” with regard to future recipients;

(c) control, exceptional storage problems, shipment and transportation of grain held in the fund; establishment of an organization to administer the fund; and the relation of this fund to other regions and food grains.

The foregoing factors would require (including the legislative process) extensive and perhaps protracted study. Pakistan will need wheat urgently in the next few months. The Government of Pakistan, most friendly to us, needs immediate assurance of our aid. I strongly recommend, therefore, that our aid be in the form of a dollar grant.

John Foster Dulles

1. This memorandum was drafted by Fluker and Smith (SOA) on Apr. 28.
2. Not printed; it requested Department of State comment on an attached memorandum, entitled “The Food Situation in Pakistan,” dated Apr. 21.
3. The first five points of the attached memorandum of Apr. 21, which is not printed, were: 1) Pakistan was facing real danger of famine after two successive crop failures; 2) the crisis in 1951–52 had been met by importing wheat; 3) the 1953 crisis was more severe than the previous ones; 4) the Government of Pakistan hoped to obtain wheat from the United States and other countries, but did not have the means to pay for it; 5) a dollar loan would tax Pakistan’s limited capacity to repay its dollar obligations and would reduce its ability to borrow for economic development.
4. The sixth point of the Apr. 21 memorandum said that there were only two ways to avoid famine in Pakistan without seriously retarding growth. One was through a grant-in-aid, and the second was through a loan that would be repaid in grain.