353. Memorandum From the Deputy Director of the Office of South Asian Affairs (Adams) to the Assistant Secretary of State for Near Eastern and South Asian Affairs (Rountree)1


  • Review of Our Military Aid Program to Pakistan

It is anticipated that delivery of military aid equipment to Pakistan under the Aide-Mémoire of 1954 will be nearly completed by the end of fiscal year 1960. Therefore, before July 1, 1960, we should have an agreed U.S. Government position on the level and nature of future military aid to Pakistan. As you know, a working group chaired by NEA/NR with representatives from Defense, ICA, W/MSC, and SO A has been working on a review of the military aid program.

In the meantime, the Draper Committee has visited Pakistan and is expected to make recommendations on future military aid to that country. In preparation for the visit of the Draper Committee the Country Team of our Embassy in Karachi prepared a lengthy statement on the military aid program in Pakistan which it has submitted to the Department under cover of Despatch No. 762, dated February 26, 1959.2 In this statement the Embassy has made a number of penetrating observations regarding our future military aid policy towards Pakistan.

Two central themes run through the Country Team review. These are that:

It is not possible to formulate a rational policy on future military aid to Pakistan until our military planners decide in specific terms what our strategic objectives are in Pakistan. These objectives must then be translated, with the concurrence of all affected agencies, into attainable and realistic force goals which the United States is willing to support financially.
Substantial reductions in our military aid program to Pakistan and in its own defense burden would be politically feasible only in the context of greatly improved relations between Pakistan and its neighbors, India and Afghanistan, particularly the former.

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SOA agrees with this thesis and is of the opinion that any conclusive review of our military aid program should have as its starting point a clear statement by our military authorities of our minimum security objectives in Pakistan with a listing of the forces and facilities which such objectives require. At present there exists some uncertainty regarding the attitude of the United States towards the size and character of the military establishment which Pakistan should maintain. An example of this uncertainty is the fact that the United States has the following different sets of “force goals” for Pakistan in various contexts:

MAP force goal and JCS “Strategic” force goal—5½ divisions.
Approved BP force goal “for planning purposes”—8 divisions.
At the BPMC meeting in the tall of 1958 our military representative reportedly concurred in a proposal for 6 divisions as a BP force goal.3

Under these circumstances it is natural for the Pakistanis to press for U.S. financial support for the largest of the approved force goals regardless of the original context in which these goals were formulated.

Another example of uncertainty is our attitude towards non-MAP supported forces, i.e., anything in excess of 5V2 divisions. One of our stated MAP guidelines has in the past been to “encourage the Government of Pakistan to eliminate or substantially reduce forces in excess of United States strategic force objectives for Pakistan.” Although this guidance for MAAG/Pakistan is being modified for FY 1961, the pressure to get Pakistan to reduce its non-MAP supported forces continues in various quarters of the U.S. Government. At the same time we do not support, nor do we permit MAP material to be used by, Pakistan Army units in East Pakistan or along the Kashmir Cease-Fire Line.

Inasmuch as we recognize (1) Pakistan’s right to maintain military forces in East Pakistan for internal security and legitimate self-defense and (2) Pakistan’s obligation under existing United Nation’s arrangements to maintain an armed force of a certain size (about 6,000 regular troops) along the Cease-Fire Line in Kashmir, we could hardly require that Pakistan eliminate her army units in those areas unless we are prepared to have them replaced by MAP-supported units, which in turn would reduce by two divisions the effective “strategic” force for defense against communist aggression.

Inconsistencies of this kind make it difficult to formulate a rational military aid program for Pakistan. We must recognize the possibility that a reassessment by our military of the role which Pakistan occupies in our strategic planning might result in recommendations for force [Page 721] goals lower or possibly higher than those now being supported. This would present us with difficult decisions: (a) if lower, whether we should, for political reasons, continue to support forces in excess of our strategic requirements in the face of economic pressures to reduce military expenditures; or (b) if higher, whether we should, for military reasons, support larger armed forces in Pakistan which would add to the economic burden and heighten area tensions.

Given the importance of the decisions which must be made in the near future with regard to future military aid to Pakistan, we thought you would be interested in reviewing the principal points made by Ambassador Langley and his staff in Karachi’s Despatch 762 of February 26, 1959, and we have prepared an edited summary, attached for your convenience.



1. Objectives of Military Aid to Pakistan.

The decision to extend military assistance to Pakistan was based largely upon political considerations. It was a response to Soviet and Communist-China pressures as they existed in 1953 and 1954. U.S. military aid was designed to achieve three basic goals:

To establish a favorite [favorable?] psychological climate for the Baghdad Pact.
To provide indigenous military forces which might be used in the defense of the free world.
To obtain [less than 1 line of source text not declassified] facilities in Pakistan which could be available for use by the U.S. [less than 1 line of source text not declassified]. In large measure, these objectives have been achieved.

2. Criticism of Military Aid.

Assertions that the military aid program has not contributed to area stability may have some validity if the term “area” refers only to South Asia. If the term “area” is expanded to cover also the Middle East region and Southeast Asia, then military aid to Pakistan undoubtedly contributed to the association of Iran, Iraq and Turkey in the [Page 722] Baghdad Pact and to the formation of SEATO. Therefore, any decision on the part of the U.S. to reduce military aid in Pakistan should be weighed in the light not only of its effect in the South Asia region but also on the wider Middle East and South East Asian areas.

3. Need for Policy Review;

While it is obvious that Communist military pressure is still being exerted in South Asia, both directly and indirectly, especially through Tibet and Afghanistan, it is also evident that Soviet emphasis has recently been directed to the economic as much as the military field. In view of this change in Soviet policy and taking into account the political instability created in South Asia as a whole as a result of Indo-Pakistan and Pakistan-Afghanistan tensions, a careful review of U.S. policy with regard to military aid is called for. This review must start with a realistic military estimate of the role which we expect Pakistan to play in South Asian defense and regional collective arrangements. It should also take into account technological and other military developments which have intervened since our original military aid program was conceived.

4. Need for Realistic Military Assessment

The first step in a policy review of the military aid program must be a realistic appraisal of our military objectives. Such a military review should answer the following questions:

Is our main objective in Pakistan military and strategic? [Subparagraph (b) (2½ lines of source text) not declassified]
For what specific purposes does the U.S. need Pakistan’s 5½ MAP-supported divisions?
Are we assisting in this ground forces program for its own sake [1 line of source text not declassified]?
Have we sufficiently considered that the 5½ divisions now supported by the U.S. would in all probability remain pinned down along the Indian and Kashmir borders in case of hostilities?

5. Review of Political and Economic Factors.

Once the above military re-appraisal is completed a policy decision based upon economic and political grounds becomes possible. In any such decision, we must face up to the following stark realities:

To date, despite the planned expenditure of nearly $1 billion of U.S. economic aid, Pakistan has been unable to approach economic viability.
Although we are committed to support 5½ Army divisions, we are actually supporting the equivalent of only about three divisions. The reason is that much of the material listed as “assets” in 1954 has become obsolete.
Little progress has been made towards a rapprochement between Pakistan and its two neighbors India and Afghanistan. Pakistan’s military planning is focused on possible hostilities with these two neighbors.
While recent Pakistan Governments have strongly supported Western military security measures, this should not be interpreted as reflecting popular public opinion in Pakistan. On the contrary, there is a strong current of opinion which is basically anti-Western. Once political parties are restored, we should anticipate the emergence of powerful political forces which may seek to make effective capital out of demanding a re-orientation of Pakistan’s foreign policy. In the extreme position, this campaign could include the cry of “throw the Americans out”.
In weighing the economic impact of military programs, we should keep in mind that the defense forces in Pakistan constitute a favored elite. Pakistan exists today because of the strong army it inherited and maintained. Defense forces have the first call on Government of Pakistan resources. It may be expected, therefore, that very substantial cuts in military expenditures will not be undertaken, even at the risk of serious economic deterioration.
The “costing” study recently undertaken by the Defense Department projects probable increases in the rate of defense expenditures in Pakistan of approximately 10 percent per year. This does not appear to take into account the probable total additional cost of replacement and attrition which will probably mount rapidly in the next 3 years as existing equipment becomes obsolete.

6. Relationship Between Military and Economic Aid.


The Defense Burden: In 1958, defense expenditures in Pakistan are estimated to have been somewhat less than 4 percent of the GNP and 29 percent of total expenditures of the central government. Defense forces absorb an appreciable portion of the country’s own foreign exchange in addition to import items supplied under the military aid program. Pakistan foreign exchange provided for 1958 made a direct allocation of about 15 percent to the Ministry of Defense. In preparing the FY 1960 aid program, USOM/P estimated that if the Pakistan armed forces were kept at their current strength, capital needs would approximate $100 million per year. This was the projected level of defense support aid. It was assumed that this along with the level of recent years of foreign private capital, IBRD loans and Colombo Plan aid, would provide the investment sufficient to provide a GNP growth roughly equivalent to that in the rise of population. It was also estimated that Pakistan could absorb over the next 5 years some $300 million of DLF loans in addition to those currently under consideration. The combined total of the above was estimated to yield an annual growth rate of about 3 percent in GNP.

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Unlike many countries, Pakistan has preferred to finance the greater part of the military budget out of its own resources. In GOP/FY 1959, only about 10 percent of the defense budget was financed with U.S.-owned or controlled rupees. Counterpart and sales proceeds have been used to finance the development budget.

The Domestic Economy: A critical element in Pakistan’s economic future is its foreign trade. In 1957 some 75 percent of Pakistan’s export earnings were from jute and cotton and both of these commodities are extremely sensitive to fluctuation in world trade. Depressed cotton prices resulted in barter deals between Pakistan and Iron Curtain countries. Soviet bloc imports under these barter deals were mostly capital goods which give the communist countries a permanent entry into Pakistan’s markets. In the short run, the only countermeasure open to the U.S. would be to extend loans which would allow Pakistan to finance these stocks until the market became active. However, world-wide implications of such a policy make it obviously unwise. Consequently, there is no short-term answer to this problem. In the long run, however, Pakistan must mobilize its full resources if external aid programs are to help in achieving sufficient viability to withstand such temporary shocks.
Continued Military Aid is Essential: Pakistan, with its current rate of growth, will not be able, in the short or medium term, to support from its own resources a defense establishment of the current magnitude. The Country Team agrees with the desirability of having the Government of Pakistan reduce its military forces in excess of the MAP force objectives. There is, however, not much chance of this being done as long as Pakistan regards India as a constant threat to its security. This complicates the overall problem of economic aid. American assistance is necessary and will be required for some time to come if Pakistan is to continue to make [less than 1 line of source text not declassified] facilities available to the U.S. It is also essential to assist the Pakistan Government in carrying the economic burden of its defense establishment.

7. Future Military and Economic Aid.

Military Aid Level: Since the military program under the 1954 commitment is virtually completed, future military assistance should protect the investment of the U.S. by providing maintenance and spares required to support current MAP forces. In addition, a modernization program directed towards replacing old British and lend-leased equipment over a number of years should be undertaken. It is estimated that the annual cost of such programs will be between $50 million and $60 million.
Reduction in Military Expenditures: The present military regime in Pakistan would react strongly to any indication that the U.S. planned to cut back on either its military or economic aid programs. We might, nevertheless, be able to induce the Government of Pakistan to accept a limited reduction in military expenditures provided:
The reduction is presented as a general re-appraisal by the U.S. as part of which other U.S. allies would be expected to reduce their defense burdens in return for the promise of additional economic assistance. If this increased economic aid were to be channeled through some new original arrangement, dramatic in it conception and practical in its operation, it would stand a better chance of acceptance by the Government of Pakistan.
Reduction of military assistance is coupled with settlement of one or more Indo-Pakistan disputes.
Pakistan is unable to receive military aid from any other foreign country.
Balance Between Economic and Military Aid: In the past, U.S. military aid has been disproportionate to U.S. economic aid. It has permitted maintenance of army forces without sufficient economic growth in the non-military sector. An effort should be made to stabilize the defense forces and emphasize economic investment in order that the economy can grow and eventually support military forces of the current size. This approach to the aid problem is substantially hampered by the U.S. inability to commit itself to long-term slow-growth type of project. Thus the U.S. has never openly supported Pakistan’s 5-year plan.
Economic Aid Policy: In the field of economic aid, if the present regime’s intentions to put the economy on a sound basis are borne out in action programs, the U.S. should be prepared to support these programs to the limit. The U.S. should make quicker decisions and take certain amount of risk in order to capitalize on political impact possibilities. Grudging approval, after long and frustrating negotiation, often results in adverse political returns to the U.S. irrespective of the magnitude of sums expended. Pakistan must be helped through the aid program to diversify its exports to develop its natural resources particularly oil and to reduce its dependence on imports especially food items.
  1. Source: Department of State, Central Files, 790D.5–MSP/5–559. Confidential. Drafted by Poullada on May 4. Copies of this memorandum were sent to NEA/NR and W/MSC.
  2. Despatch 762 is printed as Document 344. The attached Country Team presentation is not printed.
  3. Documentation on the Baghdad Pact Military Committee meetings is in Department of State, Central File 780.5.
  4. Confidential. Drafted by Poullada on May 4.