285. Memorandum of a Conversation, Department of State, Washington, May 17, 19601
SUBJECT
- Economic Aid to Nepal
PARTICIPANTS
- Acting Secretary Dillon
- General Subarna S.J.B. Rana, Deputy Prime Minister and Finance Minister of Nepal
- Ambassador Henry E. Stebbins, United States Ambassador to Nepal
- ICA—Mr. Harold Schwartz
- SOA—Frederic P. Bartlett
This meeting was arranged at the request of the Nepalese Embassy to permit General Subarna to review Nepalese economic problems and needs with the Acting Secretary. It lasted about half an hour.
The Deputy Prime Minister opened the discussion by briefly reviewing events in Nepal since 1950. He stressed (1) his government’s efforts to establish and maintain democratic institutions in Nepal, (2) the profligacy of previous governments which reduced Nepalese reserves from about 130 million Nepalese rupees in 1950 when General Subarna had first resigned as Finance Minister to something like 34 million rupees when the present government came into power, and [Page 602] (3) the serious efforts which the Nepalese Government and Nepalese people were making to help themselves in the building of roads and schools, to extend land reform measures, and to increase taxes.
General Assistance
The Acting Secretary expressed appreciation of Nepal’s interest in attempting to establish democratic institutions and in working hard to build up its economy. The United States Government wanted to continue to do everything it could to assist and would be glad to look at specific problems. The Acting Secretary noted, however, that as far as dollars were concerned, there were none left available out of fiscal year 1960 funds. Next year, he continued, the Department would be in a position to consider new project financing. There was not a similar time factor involved in connection with U.S.-held Indian rupee financing.
U.N. Special Fund Assistance
The Acting Secretary noted that King Mahendra, when he had recently discussed Nepal’s problems with the President, had indicated Nepalese interest in the United Nations Special Fund. As a consequence, the President had himself written to the director of this Fund as a personal friend.2 In Mr. Dillon’s opinion, the Fund might be more helpful in the planning field than any individual outside country. Should the Fund be in a position to help in this area, its reports would receive wide distribution and might be useful in encouraging other countries to offer assistance toward Nepal’s economic development.
Investment Guaranty Agreement
The Deputy Prime Minister told the Acting Secretary that he was happy and grateful that the United States Government had agreed to sign an investment guaranty agreement with his country. The Acting Secretary in reply warned that it probably would take considerable time to work out private American investment projects even under the new agreement. He wished, however, to express the United States Government’s appreciation of the concern which the Nepalese Government was exhibiting in the promotion of local and foreign private enterprise in Nepal.
The rest of the conversation reviewed the progress being made on certain projects in Nepal. At the conclusion of it the Acting Secretary and the Deputy Prime Minister signed an investment guaranty agreement on behalf of their two countries.3
- Source: Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199. Confidential. Drafted by Bartlett. Assistant Secretary G. Lewis Jones briefed Dillon for this meeting in a memorandum of May 16. (Ibid., Central Files, 033.90C11/5–1660)↩
- A copy of Eisenhower’s letter to Hoffman, dated May 9, was attached to the briefing memorandum from Jones to Dillon; see footnote 1 above.↩
- For text of this agreement, see 11 UST 1396.↩