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

352. Operations Coordinating Board Report⁰

Washington, December 16, 1959.

OPERATIONS COORDINATING BOARD REPORT ON TURKEY (NSC 5708/2)¹

(Policy Approved by the President—June 29, 1957)

(Period Covered: From: November 13, 1958 Through: Date of Board Action)

1. General Evaluation. Progress has been made toward attaining most of the U.S. policy objectives for Turkey, particularly with the Cyprus agreement and the resultant improvement of Turkish relations with Greece and the advances made by Turkey in the economic stabilization program. To allay Turkish anxiety prior to the Khrushchev U.S. visit,² the Secretary of State consulted with the Turkish Foreign Minister in Paris.³ For its part, Turkey strongly supports Free World security arrangements, and the U.S. and its allies enjoy continued access to Turkish resources and military facilities.

2. Area Relations. Since the Cyprus agreement, Turkish-Greek collaboration on other outstanding issues has taken a generally encouraging direction. Turkey’s relations with its Near Eastern neighbors continue to be affected by the Turks’ distrust of Nasser, whom the Turkish Government regards as ultimately as great a threat to the security of the area as Communist subversion on the assumption that Nasser will eventually fall under Moscow direction. Turkey has maintained close contact with the Qasim Government in Iraq and continues to urge the U.S. to support Qasim’s efforts to maintain his independence of both Moscow and Cairo. Turkey, through CENTO, is urging increased support to Iran by the U.S. and with other regional members is urging increased U.S. and U.K. support to that organization.

3. Economic Stabilization Program. a. Turkey has been reasonably successful in the implementation of the stabilization program announced in August 1958. The control of credit and reduction of excessive liquidity accompanied by a flow of goods to the market and some withdrawal of non-economic producers, have resulted in the substantial establishment of a market economy in which prices and costs are important factors. If Turkish officials continue to pursue firm fiscal and economic policies, a steady rate of economic growth through higher levels of production could be expected.

b. The support promised by the U.S. in connection with the stabilization program has been forthcoming: $100 million of procurement authorizations have been issued for the import of basic commodities, raw materials and spare parts. This represents $75 million of Defense Support and $25 million of special emergency assistance to replace depleted inventories; of the $75 million in credits available for development, $13.0 million in loans have been authorized by the Export-Import Bank and $31.3 million in loans have been approved by the DLF. Projects for the remainder of the credits are being examined by the two lending agencies; a PL 480 sales agreement for $35 million was concluded in February 1959;⁴ and arrangements were made through the Export-Import Bank to reschedule the payment of $44 million on principal and interest on early ECA–MSA loans. In addition, through OEEC, other governments agreed to extend to Turkey credits equivalent to $100 million and the IMF made available to Turkey the equivalent of $25 million.

c. On the other hand, progress has been uneven and there has been some loss of “forward momentum.” The most conspicuous deficiency is in the planning and coordination of investments, particularly in the public sector. However, it is hoped that the expressions of concern in this connection from the OEEC, the IMF and from the U.S. and German Governments will influence the Turkish Government toward the development of a rational investment program. In order to develop such a program the Government of Turkey is now seeking to obtain foreign expert assistance. This inability of Turkey to determine priorities for competing investment, consumption and defense demands on the limited resources available can be expected to create continued problems for the U.S. For example, acceleration of the advanced weapons program and other increased military activities, unless offset by reduced expenditures for existing defense programs, can be expected to result in larger Turkish defense budgets. At the same time, even though they do not have a coordinated, rational investment program to provide resources to priority public and private needs, the Turks also can be expected to continue to increase expenditures for capital investment.

4. Military Aid Program. The initial equipping of Turkish conventional forces is essentially complete insofar as the Turkish Army and Air Force are concerned. The MAP force goals were recently reduced by four divisions. Some small craft are yet to be delivered to the Turkish Navy. Future military assistance will be directed almost entirely toward modernization and replacement of equipment as it becomes obsolete or worn out. The accelerated deliveries incident to the Iraqi coup demonstrated anticipated shortcomings in Turkish ability to receive, catalog and distribute the increased flow of equipment delivered. A considerable augmentation of the MAAG field advisory effort throughout the logistical support area, as well as with major tactical units of the Army and the Air Force, is improving the quality of the forces. A basic literacy training course for inductees has been inaugurated on a countrywide basis and is expected to permit further improvement. The first surface-to-surface atomic delivery unit, an Honest John battalion, is now operational in Turkey. Training for the two Nike battalions and three additional Honest John battalions is underway or programmed. An agreement with the Turkish Government has just been concluded for the IRBM deployment.⁵ A major problem requiring resolution is the method of funding the construction of family housing for U.S. personnel who will initially man the squadron and for those who must remain for training and warhead custodial duties even after the Turkish Air Force assumes the manning.

a. Relationship between military programs and economic resources. The problem in Turkey over recent years has been to achieve a balance between Turkish consumption demands, desires for economic development, an adequate military program and available resources including anticipated levels of external assistance. Recommendations for MAP and defense support for FY 1961 have taken these factors into account along with that of limited availability of U.S. assistance.

5. Community Relations Problems. Incidents involving U.S. service personnel continue to cause serious public relations problems. The arrest and subsequent trial in Izmir of U.S. servicemen for violating Turkish currency laws⁶ resulted in much publicity adverse to the U.S. relating to the servicemen’s charges of mistreatment by the Turkish police, the widespread blackmarketing operations charged to American military personnel and the alleged infringement of Turkish sovereignty implicit in the inquiry being conducted by CINCEUR officers. A joint State–Defense team is meeting regularly to consider, among other things, courses of action designed to ameliorate this situation.

6. Policy Review. The Operations Coordinating Board concurred in the report and in its transmittal to the National Security Council, in order to call to the attention of the Council the fact that force levels have been lowered since the approval in 1957 of the National Security Policy with Respect to Turkey. The Board also noted that the Departments of State and Defense believe that operational decisions taken since approval of the existing policy are not of such nature as to require a review of the policy by the National Security Council.

0. Source: Department of State, OCB Files: Lot 62 D 430, Turkey. Secret. A title page and an undated covering memorandum are not printed. In the covering memorandum, Bromley Smith noted that the Board concurred in sending the report to the NSC after revision of paragraph 6 and noted the State–Defense belief that the policy did not need NSC review. Minutes of the OCB meeting of December 9 are Ibid., Minutes VII. Smith also noted that the NSC “noted and discussed” the OCB report at its January 7 meeting; see Document 353.
1. For text, see Foreign Relations, 1955–1957, vol. XXIV, pp. 720–727.
2. Khrushchev visited the United States September 15–27.
3. A memorandum of this conversation, September 4, is in Department of State, Conference Files: Lot 64 D 560, CF 1458.
4. For text of the agreement, see TIAS 4175.
5. The agreement was concluded on September 20.
6. The trial of four U.S. servicemen on currency smuggling charges was continuing in Izmir.