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

661.89/6–2554

Memorandum by the Officer in Charge of Economic Affairs, Office of South Asian Affairs ( Fluker ) to the Deputy Director of That Office

secret

[ Washington ,] June 25, 1954.

Subject:

• United States and Soviet Interests in Afghanistan

Though Soviet economic activity has been somewhat overshadowed by overt Communist aggression in Asia, there has been an obvious quickening of Soviet economic activity in the area. South Asia has been receiving marked attention perhaps to a degree sufficient to support the surmise that the Soviets and the Communist Chinese have reached some agreement on the line within South Asia that demarks their respective spheres of “influence” or responsibility. Within South Asia, SOA has been concerned particularly with trends in Soviet pressures on and in Afghanistan. Although it is important to keep matters in perspective and, therefore, to avoid undue emphasis on events in individual countries, matters in Afghanistan may be coming to one critical stage from the US standpoint. The potential of recent events seems to indicate the need for decision or at least present US evaluations of future action or reactions.

Further light may be shed on the area and global aspects of recent Soviet economic activity in the area when OIR completes the study requested by SOA.¹ DRN estimates that the study will be ready in about a month from now. With regard to the Afghan situation, the following general summary serves to indicate the nature of the problem before us—perhaps summed up in the observation that to date from the standpoint of effective political-economic action, the US is in a relatively good position which the Soviets are trying to undercut.

1. The present GOA , with the rise of the new cabinet, is faced with the normal Afghan difficulties of administration, control of certain tribes and an ostensible shortage of internal and external revenues.

(a) This government is split by economic forces favoring state control on one hand and established private interests on the other. In addition the GOA, for the first time since the advent of the present royal family, is without one of the original brothers at its head. The difficulties of control of a country such as Afghanistan will undoubtedly be greater for the sons, at least in the initial stages of their rule.

(b) The GOA doubtless desires more US aid and support. It is unhappy with its “share” of such aid and may well be prepared to play off the Soviets against the US. (c) In the past Afghanistan’s reaction to sporadic Soviet pressure has been one of cautious courage. Recent GOA acceptance of Soviet offers—reportedly under Soviet pressure—indicates that in addition to the reason advanced in (b) above, the GOA believes it can take the “benefits” of Soviet aid and eliminate or control the adverse aspects.

2. US economic aid policy in Afghanistan has been to stimulate economic development but in such a manner as to keep the Soviets from reaching a high state of excitement and the consequent reaction of stepped-up pressure on Afghanistan.

3. Soviet economic activity in Afghanistan has moved beyond the trade agreement stage. It has taken in the extension of relatively easy credit and technical assistance from the erection of oil storage tanks, grain storage, milling and a bakery. Apparently it now proposes to move into roads, more oil and gasoline storage, possibly pipeline construction, etc. All evidence points to the probability that the Soviets will move quickly. The Soviets may well have taken this line as a reaction to: (a) US military aid to Pakistan—and the Turko-Pakistan pact, (b) the effectiveness of US economic aid in the area, (c) the possibility of increased free world “influence” in its own Central Asiatic Republics. It is also possible that the Soviets are taking their present line not so much as a reaction to free world action, but as a part of their global strategy.

4. Dangers of the increased Soviet activity in Afghanistan include the military aspects of road and oil storage construction, subversive activity by Soviet “technicians” who are of the same racial stock as the Afghans, the opportunity thus presented for Soviet infiltration and pressure on a West Pakistan which has some susceptibilities to such action, and the effect on further Soviet action, and the reaction in the free world of the establishment of a pro-Soviet regime in Afghanistan.

5. A review of US economic policy in Afghanistan seems necessary in light of stray Soviet action, the probable consequences of such action, and the US various alternative lines of action now possible for the US.

(a) The present US alternatives include:

(1) keeping our present policy without significant increases or decreases in our aid, (2) “minimize our losses” by gradually reducing our activity and our aid to a minimum consistent with achievement of bare economic results, and (3) countering the Soviet moves so as to preclude infiltration by Soviet technicians or mitigate their effectiveness. The latter line of US action may be expensive since it will probably be possible only upon US acceptance of likely GOA requests for substantial additional US economic aid, US military aid on certain guarantees.

(b) The US, therefore, faces some difficult decisions in Afghanistan. While all final decisions need not necessarily be made at this time, some evaluation of US interests is necessary in order to guide our immediate action. The basic considerations requiring decision or evaluation at this time relate to (1) the US military interest in Afghanistan (2) the US political and psychological interest in keeping Afghanistan out of the Soviet orbit.

On the basis of these present evaluations, the US can proceed to take certain steps or combinations of steps:

(1) In any case the first action, even before the above-mentioned evaluations or decisions are available, should be to have a frank talk with the GOA by way of emphasizing the dangers of Soviet aid, determining the extent to which the GOA intends to go, and putting our reservations or objections firmly on record. We should consider consultation with the UK on the problem—although this has some disadvantages with a view to common action. We should also keep a sharp eye on day-to-day developments in Soviet activity—from Kabul, Moscow and elsewhere, with up-to-date information on Soviet citizens (their abilities, disabilities, etc.) assigned to the area in any capacity.

(2) We should consider immediate action with regard to bonded transit of goods through Pakistan to Afghanistan, admission of Afghanistan into the “Colombo Plan,” better US loan terms for economic development, and the possibility of increased Afghan trade with Pakistan (possibly in conjunction with US aid to Pakistan), India, and particularly Japan.

(3) If the evaluations indicate a need for strong US action to counter or preclude Soviet economic action, we should consider an emergency aid program extending into administration and possibly military fields. In this event we should recognize that the Soviets’ ultimate step might well be an all-out effort to stimulate armed rebellion in Pakistan and that strong US–Afghan (or regional) counteraction would probably be the only timely course open.

(4) The foregoing decisions and evaluations might properly be made final by the NSC or some part thereof. The NSC consideration could undoubtedly be facilitated by the dispatch of an evaluations mission composed of representatives of various interested agencies.

1. Projected study not found in Department of State files.