29. Telegram From the Embassy in Burma to the Department of State1

1029. U Kyaw Nyein asked me call this morning and inquired if there were any developments subsequent his conversation with Howard Jones and me (Embtel 9502) in which he had set forth his desire for a $150 million loan spread over three years for use in economic development. He was most grateful for our technicians proposal and said he realized from this and fact that IBRD now prepared to go ahead with port and railway rehabilitation projects and that IMF was prepared to advance $15 million that State Department was actively endeavoring assist Burma.

He asked how Ceylon had gotten around Battle Act. I replied did not have details but was sure that Ceylon Government had undertaken cooperate in some way. …

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I said that loan of such dimensions would be very difficult for my government. Possibilities were however being actively investigated in Washington but I could give him no assurance other than existence of desire to help wherever possible.

I asked him about scope of program GUB had in mind putting up to Soviet mission when it reached here in May. …

I asked him how much assistance from Russians could be cut down if assistance from us were available. He replied that could be cut down to almost nothing if sufficient assistance were available soon enough. Re tractor factory he said vice president International Harvester was here last week and had told him IHC would be glad assist Burma in establishing tractor factory for very low fee. U Kyaw Nyein thought cost would be 5 or 6 crores (ten or twelve million dollars). If American assistance were available this project could be carried out by Americans rather than by Russians.

Reverting to International Bank’s request that negotiating team be sent to Washington (Deptel 8833) he said they would probably send U Raschid or if he could not go some high ranking civil servant. …

I asked about his plans for visiting Russia. He said he and U Ba Swe had not given them answer yet but that they would not go before July or August.

Department’s advice on what to tell U Kyaw Nyein in light his plan to get around Battle Act requested soonest. We would be pulling off quite a coup if we could get him to Washington and let him come back with assurance of some considerable economic assistance before Soviet mission visits Rangoon and before he visits Russia.

  1. Source: Department of State, Central Files, 411.90B41/3–956. Secret.
  2. Document 26.
  3. Telegram 883 to Rangoon, March 6, informed the Embassy that the IBRD management intended to invite Burma to send a delegation to Washington to open negotiations for two loans. (Department of State, Central Files, 398.14/3–656) A letter of April 23 from Purnell to Braddock, reported that the delegation was well prepared and did an excellent presentation. He continued that the Bank, with the assistance of the Department of State, has indicated to the Burmese its willingness to consider other reasonable projects the Burmese may need help financing. (Ibid., 890B.00/4–2256) Two agreements signed on May 4, between Burma and the International Bank for Reconstruction and Development provided for a loan of $5.35 million for railway rehabilitation and development and a loan of $14 million for reconstruction and development of the Port of Rangoon; the texts are printed in 253 UNTS 179 and 209.