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
SUBJECT
- 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:
- (a)
- 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.
- (b)
- 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.
[Page 720]
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:
- (a)
- MAP force goal and JCS “Strategic” force goal—5½
divisions.
- (b)
- Approved BP force goal “for planning purposes”—8
divisions.
- (c)
- 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.
Attachment
SUMMARY OF EMBASSY KARACHI’S DISPATCH 762, FEBRUARY 26,
1959, DRAPER COMMITTEE PRESENTATION4
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:
- (a)
- To establish a favorite [favorable?] psychological climate for the Baghdad
Pact.
- (b)
- To provide indigenous military forces which might be used
in the defense of the free world.
- (c)
- 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:
- (a)
- Is our main objective in Pakistan military and strategic?
[Subparagraph (b) (2½ lines of source
text) not declassified]
- (c)
- For what specific purposes does the U.S. need Pakistan’s
5½ MAP-supported
divisions?
- (d)
- Are we assisting in this ground forces program for its own
sake [1 line of source text not
declassified]?
- (e)
- 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:
- (a)
- To date, despite the planned expenditure of nearly $1
billion of U.S. economic aid, Pakistan has been unable to
approach economic viability.
- (b)
- 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.
- (c)
- 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.
- (d)
- 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”.
- (e)
- 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.
- (f)
- 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.
- (a)
-
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.
[Page 724]
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.
- (b)
- 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.
- (c)
- 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.
- (a)
- 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.
- (b)
- 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:
- (1)
- 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.
- (2)
- Reduction of military assistance is coupled with
settlement of one or more Indo-Pakistan disputes.
- (3)
- Pakistan is unable to receive military aid from any
other foreign country.
- (c)
- 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.
- (d)
- 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.
