127. Memorandum From the Secretary of State
to the Director of the International Cooperation Administration
(Hollister)1
Washington, February 8,
1957.
SUBJECT
I believe you are familiar with the discussions which have taken place
regarding the need for devising some method of meeting the
dissatisfaction of the Asian members with the economic activities of
SEATO, and with the proposal
submitted to the interdepartmental working group on SEATO economic activities, described in
the attached memorandum.
The objections of your Agency to this proposal as set forth in Dr.
FitzGerald’s memorandum to Mr.
Turnage of December 10, 19562 have been carefully considered. They do not appear to
question the feasibility of the proposal. Since there are very strong
political arguments in favor of the United States doing something of
this type which would help to lend substance to Article III of the
Treaty by providing resources for implementing projects which relate, as
indicated in the Bangkok communiqué, to special economic questions
arising out of Treaty commitments, I would be very grateful if you could
reexamine the proposal in this light.
The announcement of such an offer by me at the SEATO Council Meeting to be held at Canberra, March 11–13
would be particularly helpful in achieving our objective of making this
meeting an important milestone in the development and growth of SEATO both in its military and
non-military aspects.
[Attachment]
PROPOSAL FOR STRENGTHENING ECONOMIC ASPECTS OF SEATO
The U.S. would earmark a sum of $10 million from MSP funds for programming by the SEATO Committee of Economic Experts
for
[Page 281]
projects closely
related to the support of defense programs in the Asian member
countries. The funds would be handled by the ICA and its respective country missions in the usual
manner except that these funds would be allocated to projects
(acceptable to the U.S.) upon the initiative, advice and
recommendations of the SEATO
Economic Committee.
Although the projects initiated and the funds allocated would result
from the advice and recommendations of the SEATO Economic Committee, management of the funds would
remain with the United States, which would obligate the funds and
implement agreed projects in the same fashion as practiced in the
regular U.S. country aid programs.
This proposal would utilize funds additional to those currently made
available for regular country aid programs in Pakistan, Thailand and
the Philippines. The purpose of the proposal is not to indirectly
increase the country aid levels but to permit the SEATO Economic Committee to undertake
work resulting in implementing recommendations on problems arising
out of defense expenditures resulting from treaty commitments.
It is envisaged that the proposal would work as follows: Member
countries would introduce into the Economic Committee project
proposals. The Committee would screen such projects from the
standpoint of their meeting certain criteria, such as relation to
defense, establishment of needs of country or countries concerned,
relation to existing facilities, ability of country to maintain such
a project once completed and overall contribution to the defense
resources of the area. Once screened, the Committee would examine
the specifics of the project, including examination of detailed
documentation. The Committee can, in its examination, request
additional detailed information; once satisfied as to the validity
of the project, it can recommend it to the Council Representatives
for implementation out of the proposed funds. Governments would make
known their views through the Council. If approved there, a proposed
project, say located in Pakistan, would then be funded and
implemented by the USOM in that
country in accord with its usual procedures.
The proposal will require strengthening the caliber of delegations
attending the Economic Committee and require the inclusion of
suitable technical experts. It would probably require the assignment
on a full-time basis of an ICA
officer having responsibility for SEATO projects.
