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

1174. For Sebald from Baldwin.

Rice conversations with Burmese officials held in friendly atmosphere. Burmese stressed following points:
Increasingly difficult Burmese economic situation and enforced curtailment economic development program largely attributable inability sell more rice.
Economic deterioration has forced GUB embark upon undesirable policy of barter deals, some involving Communist countries. GUB dubious re benefits these deals for Burma and recognizes that closer ties with Communist bloc may be inevitable result but sees no alternative means disposing surplus rice.
GUB admits unrealism rice price policies and existence administrative inefficiency. Mission informed that GUB expects in near future change policies to improve these defects (specific changes not disclosed but rationalization export prices probable and some increase private trading possible).
GUB acknowledges good intentions US re surplus disposal policy but considers any US action which would tend accentuate Burma’s surplus rice problem would be inconsistent with US expression of solicitude for Burma’s welfare. While recipient countries may derive some economic benefits through purchase US surplus rice, impact, at least short-term, upon Burma would be damaging and accentuate Burma’s current difficulties.
GUB especially troubled by long-range effects US wheat sales in traditional rice consuming countries. Made but withdrew suggestion US not sell wheat in Asia area.
GUB urges US avoid any action which would be detrimental Burmese interests in Asian rice markets.
Burmese delegation reiterated Prime Minister’s previous proposal that US buy surplus Burmese rice for disposal deficit countries. I accepted this as official proposal but indicated unlikelihood US ability comply.
We elaborated essential points approved talking paper.2 Emphasized particularly undesirability permitting continuance present level US rice surplus and stressing positive steps taken to reduce production. We described precautionary conditions under which any additional US surplus rice would be sold Asian markets in this crop year. We repeatedly emphasized US interests in Burma’s welfare, our [Page 10] recognition of importance rice to Burma’s economy, and our desire avoid any action detrimental to Burma.
At final meeting Burmese chairman expressed GUB gratification over mission’s visit and accepted my suggestion that further rice discussions with Embassy be held as conditions warrant.
In final official talk with Minister U Raschid I expressed hope that some, perhaps appreciable amount, surplus US rice would be used this year to relieve shortage in Cambodia, Laos. I gave no assurance this could be done but indicated matter receiving careful US consideration. Disposal of substantial amount of 230,000 tons figure in those countries, assuming they unable satisfy their requirements normally by June 15, would undoubtedly be effective follow-up of mission’s efforts here and could be represented to Burma as US action designed give GUB “breathing spell” which Burmese officials have told us is badly needed in order effect necessary changes in rice policies.
Frank talks have created official good will, reduced earlier GUB apprehension and produced better official understanding here of US side of problem. Burmese official attitude now will be “wait and see”.
Departing for Bangkok 9 a.m. 27.
  1. Source: Department of State, Central Files, 411.90B41/5–2655. Confidential. Repeated to Bangkok and Phnom Penh. Confidential.
  2. Not found in Department of State files, but Baldwin’s instructions were set forth in Murphy’s letter, cited in footnote 4, Infra , and elaborated in telegram 983 to Rangoon, May 16. (Department of State, Central Files, 411.90B41/5–1655)