344. Despatch From the Embassy in Pakistan to the Department of State1

No. 762


  • Department’s Circular Telegram 832, January 7, 19592


  • Visit of Mr. George C. McGhee and Admiral Arthur W. Radford, Members of a Sub-Committee to Study the Mutual Security Program in Pakistan

On February 11, 1959, Mr. George C. McGhee and Admiral Arthur W. Radford, coming from Tehran, arrived in Karachi for a scheduled three-day visit to consult with American officials and Pakistani leaders on various aspects of the Mutual Security Program relating to Pakistan. They left on February 14 en route to the United States. Mr. McGhee and Admiral Radford, members of a subcommittee of the Draper Committee, were accompanied by Mr. Kenneth R. Iverson and Colonel Charles E. Tenneson, Jr., U.S. Army, staff advisers. The visitors [Page 701] dined with the President of Pakistan, General M. Ayub Khan, and lunched with the Minister of Finance, Mr. M. Shoaib. Calls were made on the Foreign Minister, Mr. Manzur Qadir, and the Minister of Rehabilitation, Lt. General M. Azam. Conferences were held with the Country Team and its various members as well as with senior officials of the Government of Pakistan.

Summary of Conference with Ministry of Finance. February 12, 1959.

Mr. Shoaib chaired the meeting on the Pakistani side. In his opening statement he stressed the “massive efforts” Pakistan had made toward development, but said that despite these efforts, the country was still in desperate shape. Although there had been considerable growth as a result of the Korean boom, in recent years economic development was merely keeping pace with population growth. Large amounts of aid and loans received from abroad enabled Pakistan to maintain this parity. The basic difficulty, Mr. Shoaib said, was the deterioration in Pakistan’s terms of trade with a slight rise in import prices and sharp fall in export prices. Since jute and cotton, Pakistan’s cash crops, were subject to world market fluctuations, the situation was beyond Pakistan’s control.

Mr. Shoaib noted that new development plans, particularly the second five-year plan, would shift emphasis from industry to agriculture. He thought it was possible for Pakistan to grow, but the rate of growth would depend on receiving even larger amounts of foreign assistance than at present. Such assistance, he felt, should take the form of raw materials for Pakistan’s industry and aid for development. He said that he must look largely to the United States for the increased aid. The Colombo Plan could help, but its resources were limited. The IBRD could also help, but only in marginal cases after Pakistan had made a maximum contribution from its sources and its friends helped to the best of their abilities. Mr. Shoaib said that the new administration would do everything possible to cut civil governmental costs, but the seemingly inevitable trend of these costs was up. He promised to encourage private foreign investment in heavy industry where Pakistani “know-how” was lacking. The Pakistanis, however, with available skills could provide all the light industry needed if foreign exchange were made available. At present the only substantial foreign investment is in oil exploration. He praised the planning concept and said it was essential where time was limited. He added that the volume of trade with the Iron Curtain countries was small and that Pakistan was not going to encourage it. If, however, Pakistan could not sell its goods elsewhere, it would be forced to do business with the Red Bloc. He held out no hope for an increase in Pakistani trade with India, although he agreed that both countries could benefit thereby. In his view, the Indians were responsible for setting up trade blocks.

[Page 702]

Summary of Conference with Ministry of Defense. February 12, 1959.

Mr. M. Khurshid, Secretary, Ministry of Defense, chaired the meeting on the Pakistani side. Senior officers of Pakistan’s Armed Forces were also present. They included Air Marshal Asghar Khan, C-in-C, Pakistan Air Force; Major General Sher Bahadur, Chief of Joint Secretariat; Major General A. M. Yahya, Chief of General Staff; and Air Commodore A. R. Khan, C-in-C, Pakistan Navy, designate. In his opening statement, Mr. Khurshid said that Pakistan wants and needs a balanced force of 6 US-supported divisions containing only American equipment. He pointed out that the existing 5½ US-supported divisions with a mixture of US and UK equipment present difficult logistic problems for the Pakistan Army. In referring to the 40,000 troops formerly supported directly by the US, Mr. Khurshid said that this number was inadequate and that Pakistan needs 16,000 additional troops to be similarly supported by the U.S. Turning to Wah Ordnance, Mr. Khurshid said that its productive capacity should be fully utilized and suggested that the United States use this plant to manufacture arms and ammunition for Pakistan and other allies. Mr. Khurshid also made a strong plea for modern anti-aircraft weapons, saying that their present AA guns were ineffective and obsolete. He asked for new motor trucks to replace the “old junk” of World War II vintage. With respect to the Pakistan Air Force, Mr. Khurshid said that Baghdad Pact military planning studies indicated Pakistani requirements for 395 jet airplanes. Although the Pakistanis would like to modernize all their F–86 sabre jets, they would be satisfied for the present with a modest program calling for 35 high performance fighters to replace an equal number of sabres, the remaining F–86’s to be equipped with air-to-air missiles. The foregoing, Mr. Khurshid explained, was the minimum necessary to meet Pakistan’s national and international obligations. He said that so far as the Pakistan Navy is concerned, nothing is needed at the present time.

In response to a series of questions from the American side, Mr. Khurshid and his military advisers said: Pakistan wishes it could devote more of its resources to economic development and less to defense; however, Pakistan’s defense requirements must take into account the security and geography of the nation and its obligations to its allies. Although Baghdad Pact military planning studies indicate a requirement of 395 airplanes and 8 Army divisions, the Pakistanis recognize that there is no U.S. commitment to underwrite the costs involved. Nevertheless, Pakistan attaches the highest importance to the modernization of its air force. The sabre jet is out of date and, except for Iran, all countries bordering on Pakistan have better aircraft. The additional 16,000 troops Pakistan needs would add about 60 million rupees annually to their budget. The Armed Forces contribute [Page 703] to the economic development of the country in many ways: veterans provide a source of trained and skilled manpower; the services run British-type public schools for boys who do not have to enter the Services; the Army maintains its own cattle farm to supply food; the Armed Forces also assist in flood control, food control and anti-smuggling operations. Foreign exchange expenditures for the Armed Forces will go up in the future. However, a Committee has been appointed to recommend military economies. The Government’s military procurement policy is to buy locally whatever is available, regardless of quality.

Summary of Conferences with the Country Team. February 12, 13 and 14, 1959.

The position of the Country Team in its discussions with the Draper Sub-Committee was based on a series of prepared papers which were presented to Mr. McGhee, Admiral Radford and their Staff. Five copies of the Country Team’s presentation, dated February 11, 1959, are enclosed for the Department’s information.3

For the Ambassador:
Ridgway B. Knight
Minister Deputy Chief of Mission
  1. Source: Department of State, Central Files, 700.5–MSP/2–2659. Secret.
  2. Circular telegram 832, sent to 32 diplomatic posts, explained the President’s appointment of the Draper Committee and instructed the chiefs of mission to give the committee full cooperation. (Ibid., 700.5–MSP/1–759)
  3. The Country Team presentation is not printed; it is summarized in Document 353.