Foreign Relations of the United States, 1955–1957, Southeast Asia, Volume XXII

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

Rangoon, May 8, 1956—9 a.m.

1246. Deptel 989² and Embtel 1200.³ Taking advantage yesterday lunch for Brookhaven Team⁴ attended by U Kyaw Nyein, I asked him privately if he was having any trouble with Battle Act conditions on our loan offers. He replied he had hoped win acceptance conditions but that Cabinet and Prime Minister had now rejected them as incompatible with AFPFUs neutrality policy and politically impossible accept without giving recently strengthened Communist opposition⁵ ground on which to attack government. Kyaw Nyein said AFPFL in electoral campaign had charged opposition with being “stooges of a foreign power” and that acceptance Battle Act “strings” would enable opposition turn tables on AFPFL.

However informally assurances were given, commitment bound to be exposed by Communists, he said. Resultant damage to government would be greater, according Kyaw Nyein, than damage from curtailment economic development if American aid not forthcoming.

I asked if any of three Battle Act conditions was more troublesome than others. He said no, that presence political strings rather than kind of strings was difficulty; for example, limitation on rubber shipments would have been rejected even if amount much greater than 2,000 tons. Similarly with its strategic minerals; GUB not contemplating shipping any to Soviet bloc but could not give commitment not do so in future. I asked: “Are these Battle Act conditions an insuperable obstacle in your judgement?” He replied in affirmative.

Kyaw Nyein said he very depressed about this because he knew US Government bound by Battle Act limitations. He earnestly hoped some way could nevertheless be found prevent growth Russian influence over Burma.

During this conversation Kyaw Nyein referred to AFPFl’s “fight for survival” in recent elections, and to its anxiety over increased strength Communist-led opposition. Attributed AFPFL losses largely to rising cost living and said if further disaffection to be averted GUB must keep up imports consumer goods even at expense of economic development plans.

Comments: Embassy has feared this GUB reaction to Battle Act conditions. Neutrality is central feature Burma’s foreign policy on which all parties agree. Any clear departures therefrom would subject government to sharp attack all sides. GUB evidently views acceptance Battle Act conditions such departure (whereas advocacy admission Red China to UN not viewed as unneutral because it reflects Burma’s own strongly held convictions, not foreign pressures).

Relative inflexibility imposed by Battle Act could defeat US efforts prevent Burma falling under Soviet economic domination. USSR offers to Burma have no strings attached; USSR evidently willing rely on force of circumstances to bring Burma into camp once large scale Soviet aid accepted. Except for legal impediment US could take similar chance; Battle Act assurances seem unnecessary to keep flow Burma strategic materials to Soviet bloc down to mere trickle.

Recommendations:

(1) (If legally possible) That our loan offers to Burma be resubmitted, without political strings, and that we satisfy Battle Act requirements by retaining freedom of action to stop aid if strategic materials exported Soviet bloc in significant quantities.

(2) That we assure GUB its further requests for US aid will receive sympathetic consideration.

In presenting these recommendations for again stretching our policy to meet situation Burma, Embassy feels must point out that:

(a) GUB might not accept offer, even without strings, where [were]possibility of US with Krajal [withdrawal] always in background;

(b) Acceptance of offer might not reduce amount assistance GUB would accept from Russia (though Embassy believes there is fair chance that it would and that in any case it would act as counterpoise to Russian aid, thus helping Burma maintain neutrality);

(c) If we make no loan, possibility that growing Soviet influence can be kept within manageable bounds by GUB seems remote.⁶

Braddock

1. Source: Department of State, Central Files, 411.90B41/5–856. Secret.
2. Document 31.
3. Telegram 1200 from Rangoon, April 25, reported that the Burmese Government was drawing up plans for a 4-year economic development program and that Barrington had asked whether the United States could extend loans to Burma over the next 3 years similar to those recently offered. (Department of State, Central Files, 411.90B41/4–2556)
4. Reference is to a team from Brookhaven National Laboratory that visited Burma and other Asian countries in the course of preparing a report to the International Cooperation Administration on a proposed Asian nuclear research and training center.
5. In general elections held in April and May, the National Unity Front, a coalition of the Burma Workers and Peasants Party and other groups, won over 30 percent of the popular vote; the Anti-Fascist People’s Freedom League’s majority in the Chamber of Deputies, although still large, was somewhat reduced.
6. A memorandum of May 9 from Dulles to Hoover, enclosing a copy of this telegram, reads: “I hope that this problem will be sympathetically studied, as it seems too bad to let Burma fall under Soviet or Chinese Communist domination if the prospective strategic shipments to the Bloc are very minor in character.” (Department of State, Central Files, 411.90B41/5–956)