10. Telegram From the Embassy in Burma to the Department of State 1

1276. During Senator Dirksen’s2 courtesy call yesterday on U Kyaw Nyein (in his capacity as acting Foreign Minister) latter gave Senator in strict confidence his views on past and current foreign policy as follows: After Burma became independent most Burmese having had little experience with democracy favored totalitarian regime. However, U Nu and his colleagues in government being true believers in democracy in Western sense word have tried lead Burma along that line even during most difficult days of insurrection and have at no time suppressed civil liberties. They are also strongly anti-Communist and know evils communism from bitter experience of active warfare against Communist insurgents. Burma also during first years its independence looked entirely to west and especially to US for technical assistance.

One fact of life, however, which Burmese could not ignore was thousand mile common frontier with Communist China, especially as Chinese Communist Government grew in strength. Another is Burma’s steadily weakening economic situation since 1953 decline in rice prices. It was that year GUB decided terminate technical assistance with US not because it did not like and appreciate such assistance but because it feared such assistance could lead Peking to take hostile attitude toward it.

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GUB wooing of CPR with barter agreements, cultural exchanges and requests for technical assistance is, however, leading to consequences which U Kyaw Nyein fears may be fatal. Fundamental cause for this development is serious loss foreign exchange during past two years due to lower rice prices and subsequent loss large part Burma’s traditional rice market. Burma must sell its rice in order obtain foreign exchange and it has no alternative but make current barter agreements3 in view its serious economic position. This is also reason GUB has decided not to accept US economic assistance.

There is, however, one way in which US can still help to save situation and that is in assisting Burma in finding other markets for its rice or at very least in not disposing of current US rice supplies in Asian markets. (See this connection Embassy telegram 1185, May 27 [28].4) Unless US can assist Burma in this way U Kyaw Nyein (who is most realistic and pro-Western of top Burmese leaders) said he feared within five years Burma would be completely sucked into Soviet orbit.

  1. Source: Department of State, Central Files, 690B.00/6–2355. Secret. Repeated to Bangkok, Saigon, Phnom Penh, Vientiane, New Delhi, and London. At Hoover’s request, copies were sent to Benson and Dodge, with covering memoranda of June 23 from Walter K. Scott. (Ibid., 790B.00/6–2355 and 690B.00/6–2355)
  2. Senator Everett M. Dirksen (R-III.) visited Rangoon June 22–23.
  3. Burma had recently signed agreements providing for the exchange of rice for manufactured goods with Czechoslovakia, the German Democratic Republic, and the People’s Republic of China. A similar agreement between Burma and the Soviet Union was signed on July 1.
  4. Supra.