Foreign Relations of the United States, 1958–1960, Eastern Europe; Finland; Greece; Turkey, Volume X, Part 2

342. Memorandum of Conversation⁰

Washington, July 24, 1959.

SUBJECT

• Turkish Economic Affairs

PARTICIPANTS

• C. Douglas Dillon, Acting Secretary
• Ali S. H. Urguplu, Ambassador of Turkey
• Mr. Hasan Isik, Deputy Secretary General for Economic Affairs, Turkish Ministry of Foreign Affairs¹
• Owen T. Jones, Director, GTI

Mr. Isik opened his short call on the Acting Secretary by referring briefly to the worthwhile discussions that he and his colleagues had been having with the IMF. He then recalled his Foreign Minister’s recent letter to the Acting Secretary on counterpart releases,² thanked the Acting Secretary for the action subsequently taken,³ and expressed satisfaction with the various meetings that he had had with various U.S. Government officials while here in Washington this week.

The Acting Secretary responded by expressing pleasure with the progress that the Turkish Government had been making in the implementation of its stabilization program. He observed that there were still several fields in which some problems needed to be worked out and mentioned specifically the problem of investment coordination and planning and counterpart deposits. With respect to investments, he noted the need for a rational investment program that would indicate priorities and that would serve to round out the broad program that the Turkish Government had undertaken last year to regularize its economic affairs. With respect to counterpart arrearages, the Acting Secretary commented on the dangers in getting behind in something like this, and the advantages of getting it cleared up as soon as possible, noting in passing possible Congressional interest here in the United States if these arrearages were allowed to drag on. The Acting Secretary said he was glad to learn that Mr. Isik had already indicated here that an investment program would be available soon and that the counterpart account would soon be brought up to date.⁴

Mr. Isik confirmed these intentions in both respects, saying that with respect to the investment program, his Government would first address itself to the public sector and that it would probably be some time later before it could come up with anything useful with respect to the private sector.

The visit closed with Mr. Isik expressing the hope that the Acting Secretary would be able to visit Turkey again at an early date.

0. Source: Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199. Confidential. Drafted by Jones.
1. Isik led a five-man mission to the United States for discussions with the IMF. Documentation on the Turkish mission’s discussions with representatives of the Department of State, ICA, and Treasury is Ibid., Central File 782.5–MSP.
2. In the letter, dated July 12, Zorlu requested the “liberation” of counterpart funds to the Turkish Government. The letter was delivered by Isik to the Department of State apparently on July 22. A copy of Zorlu’s letter is Ibid., 782.5–MSP/7–1259. Dillon replied to Zorlu in an August 6 letter that stressed the need for the Turkish Government to plan and coordinate an investment program and to make up its arrears in payments to the counterpart fund. (Ibid., 782.5–MSP/8–659)
3. On July 20, the United States authorized the release of 362 million lira of counterpart funds to the Government of Turkey.
4. Isik discussed the counterpart problem at a July 21 meeting at the Department of State. A memorandum of this conversation is in Department of State, Central Files, 782.5–MSP/7–2159.