Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

216. Memorandum From the Representative at the United Nations (Lodge) to President Eisenhower⁰

Paris, February 21, 1958.

SUBJECT

• Economic Aid Abroad

1. The well-advertised Soviet silo in Afghanistan, filled with grain from the U.S. (which is not advertised), tells a story. So does the fact that in both India and Iran officials want our economic projects to be such as to get the U.S. more credit. My first recommendation, therefore, is that a small percentage of funds be earmarked for projects which will make a definite and favorable impact on the mind of the man in the street. A policy of “no bricks and mortar” is erroneous because bricks and mortar which provide a medical school, for instance, are good public relations. The Russians have gone so far as to donate busses and taxi cabs in Kabul and the fact that they paved the main road to the airport is well known.

2. Economic aid is today the most crucial field in which we are contesting with the Russians. Because it is the most direct way into men’s minds, we should do whatever needs to be done to win this contest.

This much having been said, it should then be set down that our programs should not arouse expectations which cannot be fulfilled.

In the Orient, over the centuries, man has become adjusted to the prevailing state of affairs, with all its hardships, dangers and diseases, and has relied on religious beliefs to sustain him. It is justifiable to upset all this if by so doing a true improvement is created. But it is wrong to upset it if one problem is merely to be followed by another.

If, for example, you train young men as engineers and then put them to work building power plants, you have made a net gain for everybody. But, if, on the other hand, you train young men to be lawyers and they then are unable to find work, you have merely created a particularly dangerous and unscrupulous kind of agitator. The Communist victory in the Indian province of Kerala was due partly to the apathy of the members of the Congress Party, but a fundamental cause was the fact that this State had the highest literacy of any state in India (75 per cent) and that it therefore had a large number of educated people who had no jobs.

The adoption of a policy of not arousing expectations which cannot be fulfilled, when this can be done consistent with our struggle with the Soviet Union, would not only be right, it might also save us money.

3. Foreign aid should be pledged over a long period of time rather than on a yearly basis. You get a bigger effect by pledging a large amount over many years than you do by pledging on a yearly basis, even though the large amount divides itself up into smaller annual amounts than you pledge annually. The public relations effect of a pledge over several years is much better, and is also cheaper.

4. In all countries—and particularly in those which are closely allied to us—we are under constant pressure to give more and more. Our officials who are on the spot must be fighting these demands, which is a most unpleasant occupation and which also does not increase our popularity. Handling economic aid on a multilateral basis takes us “off the spot.” The most destructive political position is that of saying “No” all the time. It is better for us to have the UN or some other organization say “No.” The multilateral method, if it ever became a going concern, is a way out of the present dangerous competition with the Russians.

5. I was much impressed with the high caliber of the ICA personnel in all the countries visited. I also thought the UN Technical Assistance people were doing very helpful work.

6. The new UN Special Projects fund for Undeveloped Regions¹ is being welcomed in these countries. They see it as a way to get inventories of natural resources. The creation of this fund has finally convinced some of these officials that capital development cannot be undertaken until there is a real inventory. This therefore tends to postpone demands for capital development, which is one of the arguments I made to Secretary Humphrey for such a fund several years ago. In Afghanistan, for example, it is understood that private capital will not presently interest itself in developing oil or uranium resources, for example, until an aerial map has furnished some guide to the lines which development should follow.²

0. Source: Department of State, Presidential Correspondence: Lot 64 D 174. Secret. Initialed by Lodge who left New York at the end of January to visit Iran, Pakistan, Afghanistan, and India. The source text was attached to a covering letter from Lodge to the President transmitting reports on his trip.
1. Established by U.N. General Assembly Resolution 1219 (XII), December 14, 1957; for text, see U.N. doc. A/3805.
2. Lodge briefly repeated these comments at the March 7 Cabinet meeting. (Minutes of Cabinet Meeting; Eisenhower Library, Whitman File, Cabinet Series) At Dulles’ request, he also prepared a brief paper on March 20 amplifying his report to the President. (Department of State, Central Files, 700.5–MSP/3–1958)