221. Memorandum of a Conversation, Washington, July 10, 19571
SUBJECT
- US Economic Aid to Pakistan
PARTICIPANTS
- Pakistan
- The Prime Minister
- Ambassador Mohammed Ali
- The Secretary of Foreign Affairs, Mr. M.S.A. Baig
- The Secretary of Economic Affairs, Mr. S.A. Hasnie
- The Secretary of Defense, Mr. Akhter Husain
- The Principal Secretary to the Prime Minister, Mr. Aftab Khan
- United States
- The Secretary
- Mr. William M. Rountree, NEA
- Ambassador-designate James M. Langley
- Mr. J. Jefferson Jones, III, SOA
- Mr. John M. Howison, SOA
Prime Minister Suhrawardy declared that food was the most important economic question facing Pakistan. Pakistan was short of basic foodstuffs, although he was making every effort to increase production. Pakistan had to have one million tons of wheat this year. He had instructed his Finance Minister,2 who had been in Washington for some time, to ask for 1½ million tons so that there might be a reserve to tide Pakistan over until the next crop was in sight. He described that inclination of Pakistani foodgrain producers to withhold current crops from the market until a second food crop appeared assured.
The Prime Minister characterized the foodgrain request as having top priority over all other requests he was making. Pakistan could perhaps get along somehow without the other things he was asking for, but the United States should not withhold foodgrains from Pakistan if it wished to see Pakistan avoid starvation, revolution, inflation and chaos.
The Prime Minister declared that Pakistan fully appreciated US aid, but that there was no getting around the fact that developmental aid had an inflationary impact on the domestic economy. Two alternative means of combatting such inflation existed: greater production and/or the import of consumer needs. He was doing what he could to increase production. (His implication was that the US [Page 482] should contribute to combatting inflation by making available import commodities such as foodgrains.)
Mr. Suhrawardy also reiterated Pakistan’s interest in obtaining an atomic reactor. Mr. Nehru had said that India was getting on in this field, and yet Pakistan did not have a single atomic reactor.