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

507. Telegram From the Department of State to the Embassy in Thailand¹

Washington, September 29, 1956—12:44 p.m.

1140. Joint State–ICA message. Your 531,² 532,³ and Despatch 135.⁴

I. Prime Minister’s Request for Increased Economic Aid.

Believe information which Department’s 926⁵ authorized you state publicly represents partial answer. To provide more complete reply to Prime Minister:

1. Suggest with reference fields of activity for which he requested increased aid that you summarize present extensive roads program (USOM can supply details), state that field of power under consideration in connection with FY ‘57 program, and note that skilled labor field being studied by US and Thai Governments in effort find practical project.

2. State that US will keep Thailand’s economic aid needs under continuing review during FY ‘57 from viewpoints adequacy present aid level to finance sound economic projects, timing of projects and expenditures therefor, and limitations on availability US aid funds this fiscal year.

FYI: Indication Department’s 926 that at least $5 million more available for economic aid in FY ‘57 than in FY ‘56 based on estimate Despatch 65⁶ that only about $3 million required from FY ‘51 DS aid to finance local currency costs military projects as compared $8 million from FY ‘56 DS aid. Earlier Washington estimate had been only $750,000 required for this purpose from FY ‘57 DS aid. End FYI.

II. Project Recommendations.

We assume project recommendations your 532 represent highest priority projects for FY ‘57 program in Embassy’s view, aside from planned continuation projects already under way under previous years’ programs. We therefore assume Embassy assigns lower priority to such TG aid requests as housing for poor.

Without prejudging merits your 532 recommendations, believed here that it may be possible to undertake some part of them within present aid level of $30 million. Picture this respect should be clearer when FY ‘57 DS operational program now under preparation in field received.

Request replies and comments on following in order facilitate consideration your project recommendations:

1. Survey Thai-Laos transport complex. As indicated Despatch 135, survey without implementation likely have little political impact in Thailand favorable to US. Even if implemented, political impact likely vary for different segments transport route:

a) Improvement road system Bangkok–Nongkhai believed justified from both political and economic viewpoint, but already under way or planned, apparently without necessity propose survey—i.e., Northeast Highway now under construction from Saraburi to Khorat, rehabilitation (primarily bridge work) Khorat–Nongkhai road definitely planned by ICA and engineering survey under consideration for Bangkok–Saraburi road. Presume that engineering would not require larger scale survey envisaged reference telegrams.

b) Mekong River bridge and Siracha port aspects transport route appear doubtful both on political and economic grounds. In so far as we aware only indication Thai Government interest has been by Rak (Despatch 119⁷) and no approach made for US assistance. … Cabinet decided “advantage of bridge would be entirely for Laos” and “Thailand would not benefit because there would be little worthwhile traffic as far as Thailand was concerned.” Siracha port survey could even be counter-productive politically in view funds already invested by Thailand in making Bangkok accessible seagoing vessels. As noted your Despatch 135 Thai Government might well decline Siracha alternative for reason indicated.

2. Bangkok–Don Muang Highway. We understand present road to airport is inadequate and can perceive favorable political connotations in this project. Would like to know to what extent Thai Government has shown interest this project and economic justification for 6-lane highway (instead of 2, 3, or 4).

3. Yanhee Project. We aware Prime Minister considers this project high priority. IBRD consideration has been held up pending economic study by Gilmartin (Bank representative in Thailand). Understand some further study is contemplated by IBRD. Department will maintain close liaison with IBRD and determine appropriate action as soon as possible.

Dulles

1. Source: Department of State, Central Files, 792.5–MSP/9–2956. Confidential. Drafted by Mendenhall; initialed for Dulles by Jones.
2. See footnote 3, Document 504.
3. Document 504.
4. Despatch 135 from Bangkok, August 31, discussed the possible merits of the formulation of a long-term plan for a transportation complex in Thailand and Laos. Construction of a road from Bangkok to Don Muang airport and a survey of the remainder of the proposed transportation complex were recommended. (Department of State, Central Files, 792.5–MSP/8–3156)
5. Telegram 926 to Bangkok, September 17, authorized the Embassy to announce tentative U.S. aid levels for Thailand for fiscal year 1957 of $30 million for defense support and $4.5 million for technical cooperation. Military aid levels for the Mutual Defense Assistance Program and Direct Forces Support were not included and had not been established for fiscal year 1957. (Ibid., 792.5–MSP/9–1556)
6. Despatch 65 from Bangkok, July 27, analyzed the political and economic factors affecting Thailand’s capacity to finance a military buildup. (Ibid., 792.5–MSP/7–2756)
7. Despatch 119 from Bangkok, August 23, transmitted a memorandum of a conversation between Deputy Assistant Secretary Sebald and Thai Deputy Foreign Minister Rak Panyarachun. Rak suggested to Sebald that it would be desirable for the U.S. aid program to do something conspicuous to offset a growing public reaction against the United States in Thailand. (Ibid., 892.00–TA/S–2356)