Office of the Historian

49. Memorandum of a Conversation, Department of State, Washington, January 8, 19591

Washington, January 8, 1959

SUBJECT

  • Aid Program in Viet-Nam

PARTICIPANTS

  • Mr. Walter S. Robertson, Assistant Secretary of State for Far Eastern Affairs
  • Mr. Leland Barrows, Former Director of USOM, Saigon
  • Mr. Gardner E. Palmer, Deputy Assistant Secretary for Far Eastern Affairs
  • Mr. Joseph A. Mendenhall, SEA

Mr. Barrows called on Mr. Robertson following his completion of a 4-year tour as Director of the USOM in Saigon. The principal matters discussed were as follows:

1.
Mr. Robertson said that all governments in the FE area receiving US aid complain about the slowness of implementation of our programs which results from procedures set up in Washington. He cited President Diem’s satisfaction with rapid implementation by the Australian Government of its small program, and commented that it is unfortunate that the favorable political impact of our large programs is lost to some extent by our delays. Mr. Barrows expressed doubt that the Vietnamese Government is too well satisfied with the Australian Government’s program at this time because an Australian expert recently told the GVN that it did not lack technical advice for getting on with its projects, but rather needed to make decisions itself.
2.
Mr. Barrows said that relations with President Diem reached a difficult stage in FY 1958 because of the reduction in aid and our insistence upon an increased GVN contribution to the military budget. Mr. Barrows added that in FY 59 he had taken the lead in proposing that we keep our contribution to the military budget at the same [Page 128] level as in FY 58 to avoid a political fight with Diem. Virtually the only matter of aid program friction between us and the GVN this year has related to the latter’s desire for relaxation of eligibility criteria for commodities to be financed by PAs. We have opposed the financing of luxury items because of severe past criticisms in both Viet-Nam and the United States.
3.
Mr. Barrows said that in his view budget support by the U.S. results in some disincentive for an aid recipient country to move toward greater viability. In this connection, he said that Diem had told him some time ago of the adoption of a policy of encouraging domestic consumption of rice rather than its exportation. The indications are that this policy is now being changed as the GVN has begun to stress increased production of rice for export. Mr. Barrows indicated that the GVN may have been pushed to this position by the decline in our aid.
4.
Mr. Barrows summarized the situation in Viet-Nam as good, and progress during the last four years as excellent. Mr. Robertson concurred, stating that Viet-Nam represents one of the most amazingly successful stories in Asia, and its progress since 1954 a real accomplishment.
5.
In concluding, Mr. Robertson expressed appreciation for Mr. Barrows’ excellent work in Viet-Nam.

  1. Source: Department of State, FE Files: Lot 61 D 6, MC Miscellaneous. Confidential. Drafted on January 9 by Mendenhall.↩