The British Minister (Scott) to the Assistant Secretary of State for European Affairs (Merchant)
Dear Livy: At this afternoon’s meeting1 I promised to give you a note of our present tentative thinking in regard to economic aid.
We consider it important from the point of view of Asian opinion that the eventual South East Asia Treaty should in addition to its purely military objectives, recognise the need for parallel economic measures. We have an open mind as to whether the Treaty should initially confine itself to a statement of principles as at present envisaged in Article 3 or whether we should attempt to reach agreement now on more detailed executive provisions.
We are inclined to think that the only practical possibility would be the provision of economic aid to South East Asia on a two-tier basis. We should wish to see maintained, and possibly intensified, existing activities under the Colombo Plan in regard to those countries not members of S.E.A.T.O. Similarly the schemes for United Nations technical assistance and Point Four aid would remain undisturbed. [Page 767] At the same time there would be some new machinery for giving aid in support of defense measures to members of S.E.A.D.O.
Even if no definite economic programme can be incorporated in the Treaty we think it of great importance that the Foreign Ministers should be prepared to make some statement of economic aims before the meeting is concluded.
I am sending a copy of this letter to the Australian and New Zealand Ambassadors.