Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

187. Despatch From the Embassy in Ceylon to the Department of State¹

No. 133

Colombo, July 29, 1958.

REF

• Depcirtel 1043, May 5, 1958, for Chief of Mission²

SUBJECT

• United States Aid to Ceylon for FY 1960; Analysis of United States Objectives and Programs

Objectives

United States objectives with respect to Ceylon as seen by this Embassy are broadly as follows:

1. Control by a non-Communist government, friendly and cooperative with the United States, politically stable with broad popular support, and possessed of the perception, will and strength to resist the spread of Communism from within or its effective penetration from without;

2. A strong economy developing at a rate sufficient to convince the people that their economic aspirations can be fulfilled by democratic means;

3. Increasing association and cooperation by Ceylon with other non-Communist Asian countries and with the free world community.

4. Military strength sufficient to maintain law and order internally and thereby to contribute to area stability.

Problems

1. The domestic and foreign policies of the Government of Ceylon interpose many obstacles to the achievement of our objectives. The domestic policy of the Government is socialistic and its foreign policy is neutralist. There is wide-spread public support for such policies. Capitalism is thought of as imperialistic by nature and is generally associated with color and racial prejudice. There are broad areas of underlying apprehension and envy with regard to the United States because it is the strongest and wealthiest world power; it is the leading capitalist power and at the same time is allied with all of the former metropolitan imperialist countries. On the other hand the Soviet Union has enjoyed, in many Ceylonese minds, the position of a non-imperialistic country which has made great political, economic, social and scientific advances by revolutionary socialist methods.

2. Ceylon’s policy of neutralism is one of expediency and not of principle. Problems of the cold war are examined, not on their merits, but with the objective of finding a position somewhere between the two sides which will be least difficult for Ceylon. It also is an openly acknowledged policy of getting the most possible from both sides—Prime Minister Bandaranaike in a recent statement in Parliament pointed to economic assistance from both the United States and from the Soviet Union as proof that his foreign policy had been successful.

3. The Government’s domestic policies have been vacillating and weak; there has been much giving in to pressures rather than acting on principle; there has been a tendency to permit conflicts to worsen rather than try to stop them at the outset; and there has been much yielding to the mob rather than leading of the people.

4. A fundamental problem is that the economic aspirations of the people have far out-distanced the present productive capacity of the country, and in addition the population is increasing so rapidly as to imperil existing economic standards if the rate of economic development is not substantially increased.

5. In addition to all of the other problems which a newly-independent, politically immature, and economically weak country must face, Ceylon recently has been torn by communal strife between the Sinhalese and the Tamils of such intensity as to leave not only the Tamils, but also the other minorities deeply apprehensive of the future.

Political Perspectives

1. The problems confronting the Government and people of Ceylon and those confronting the United States with respect to Ceylon are not unique to this country, nor do they create such formidable difficulties as to convince us that we should change substantially our policies or programs.

2. There are many favorable factors. The rate of literacy in Ceylon is the highest in South Asia. Democratic processes and institutions are strongly grounded. Western culture, institutions and accomplishments are widely known and admired even though criticized. English is widely used. The economy is fundamentally sound and subject to great potential development. Politically, the people are still in a ferment, still confused and uncertain, still susceptible to influences, both good and bad. There is still a great chance for a political society favorable to United States interests to evolve. We can still make our influence felt.

3. The present government is working toward socialist goals domestically and follows a neutralist course internationally, and it is in our interest to recognize openly its unquestionable right to do so. However, we are under no obligation to assist the Government of Ceylon in attainment of its goals, and Ceylon’s policies emphasize that the United States policies with respect to Ceylon should be established and implemented entirely on the basis of political criteria, that is, in terms of political return or advantage to the United States.

4. United States economic aid of course assists the present Government in its pursuit of socialist goals. Such aid could be substantially increased. However, many Ceylonese people oppose any United States assistance on the grounds that it is helping the present government, and that without our help the government might fall and a new government more favorable to the United States might be elected. Others, on the extreme left, oppose our aid because of the friendly and appreciative reaction which it evokes from other Ceylonese. The present government welcomes our aid because it urgently needs it, but at the same time in public statements it consistently attempts to balance United States assistance with that from the Soviet bloc. If we ceased our aid entirely it would be regarded publicly as an act of political interference and the leftward trend of the government might be accelerated. We would suffer a great loss of popularity with the general public. The Embassy therefore concludes that the magnitude of economic aid extended by the United States should be on the basis of our best political judgment and should be limited to the minimum we can give and still make progress toward attainable political objectives.

Aid Criteria—Programs and Evaluation

1. United States economic aid to Ceylon should be large enough to be of recognizable benefit to the government and people, and of a nature to ensure the most widespread public relations impact. Within limits set by political criteria, it should be directed toward maximum economic benefit.

2. The most outstanding of our impact programs has been the school lunch milk and bun program conducted by CARE which not only has enabled the leaders of the Government of Ceylon to keep one of their campaign promises, but also provides a mid-day meal for 1,250,000 children in more than 6000 schools in Ceylon. It is very important that this program be continued in the future.

3. United States Government aid programs conducted by the USOM have been developed around the need for increasing food production, industrial development, improved communication and transportation, and education and health benefits. All of these programs are seen by the Embassy as making a positive contribution to the implementation of United States policy. The proposed FY 1960 expenditures are regarded as representing the minimum of a range of expenditures which might be justified in the present situation.

4. In addition to possible future emergency expenditures such as those connected with the floods of last December, we believe that United States economic assistance can be fully justified within a range of $10 million to $15 million annually, including grant technical assistance of about $1.5 million, Development Loan Fund expenditures, the CARE school lunch program, and other assistance extended on the basis of surplus agricultural commodities. This is not out of proportion to aid received by Ceylon under the Colombo Plan and from the United Nations. It may be compared with the credit of Rs. 142.8 million ($30,094,837) from the Soviet Union for financing goods and services from the Soviet Union for selected development projects over five years, and the grant of Rs. 15 million ($3,161,222) annually over a period of five years from the People’s Republic of China.

5. The United States economic aid program to Ceylon has been, and is expected to continue to be, of a political benefit to the United States considerably out of proportion to the actual funds involved. The excellent public relations and representational activities of the USOM leadership have of course contributed substantially to that benefit. At the same time it must be emphasized that the USIS has played a significant role in creating public understanding and appreciation of our aid program as well as of other aspects of United States policy. Our USOM and USIS programs together make a contribution to the successful achievement of United States policy which would be impossible to either of them alone. Even so, we would emphasize that our USIS program, aside from its cooperation with USOM, helps make our policies successful to a degree far out of proportion to the relatively small sums of money involved.

Maxwell H. Gluck

1. Source: Department of State, Central Files, 746E.5–MSP/7–2958. Confidential.
2. Circular telegram 1043, May 5, included a request to the Chiefs of Mission for an analysis of U.S. objectives and the role of various U.S. and non-U.S. programs in fiscal year 1960 in achieving those objectives, (Ibid., 120.171/5–558)